Employment Regulations
Indian employment law is heavily bureaucratic, with numerous statutory requirements with regards to contracts, termination procedures as well as employee pensions and holidays. The main distinction with regards to employee rights lies with whether the employee is considered a “workman” or otherwise under Indian employment law. As the following only aim to act as a guide in the broadest sense, it is still recommended that professional legal advice be sought when employing in India. For further reading, please refer to the Indian Ministry of Labour’s website here.
Key Factors to Consider When Employing in India:
Indian legislation views workers as two distinct categories: workmen and non-workmen. In India, most of the legislation in place primarily applies to workmen.
Under the Industrial Disputes Act (ID) Act, one of the main labour legislations in the country, a workman is defined as any person employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment are express or implied. An employee working in a managerial or administrative capacity, or those employed in a supervisory capacity earning more than INR10,000 per month, are excluded from the scope of this definition.
The model standing orders under the Industrial Employment (Standing Orders) Act 1946 also classify workmen as permanent workmen, probationers, badli workmen and temporary workmen based on the nature of their employment.
The definition of “workman” under the ID Act includes temporary workers. Temporary or part time workers are thus entitled to the same benefits as full-time workers and subject to the provisions of the ID Act in relation to termination provisions. However, where a temporary worker is employed for a genuine specific task for a limited time period, the usual provisions concerning termination for full-time workers will not apply to that temporary worker.
Indian law also recognises agency workers – workers employed through third party contractors. Their employment is governed by the Contract Labour (Regulation and Abolition) Act 1970.
A worker’s entitlement to statutory employment rights depends on the category of employee and multiple other factors, including nature of the work undertaken, remuneration, location of employee and type of industry. As the ID Act seeks to protect workmen, an employee who does not qualify as a workman will not receive any protection or benefit under the ID Act.
Employee Entitlements
Working on Sundays
No work on Sunday can be performed without prior agreement, and no employee can work for more than 10 days without a rest day of 24 hours.
If an employer requires work on Sundays or Public Holidays, those days of must be given back to the employee within the following 2 months.
Time Off Work
Other Leaves – As per bombay shops and establishments act 21 Paid Leave others dependent on the company policy.
Medical Leave
This is dependent on the company’s policy and Employee State Insurance
Employment Termination
Resignation / End of Service Payment
The following is required:
- Copy of approved resignation letter/clearance form
- Forms and Returns / The De-registration will include Provident Fund Formalities and salary certificate.
Termination of Employment
The following information is required by law:
- Copy of approved resignation letter/clearance form
- Forms and Returns / The De-registration will include Provident Fund Formalities and salary certificate.
