Currently, there is no requirement for a formal written contract of employment, although employers generally enter into written employment agreements. Some state-specific S&E Acts require employers to record certain terms of employment such as wages, designation and work hours. The OSH Code has a statutory requirement for the employers to issue appointment letters to every employee on their appointment in the establishment, with such information and in such form as may be prescribed by the appropriate government. Recent amendments to the Employee’s Compensation Act 1923 (ECA) and the Maternity Benefit Act, 1961 (MBA) require employers to inform employees (in writing) of the benefits available to them thereunder.
The Rights of Persons with Disabilities Act, 2016 (RPWD Act) requires all employers to adopt and publish an equal opportunity policy which includes details of posts that persons with disabilities may apply for, amenities that are provided to disabled persons to allow them to carry out their work functions and the manner of selection for employment for persons with disabilities.
The Transgender Persons (Protection of Rights) Rules 2020 (TPR Act) requires employers to publish an equal-opportunity policy for transgender persons which inter alia includes details of infrastructural facilities, measures put in for safety and security and amenities to be provided to transgender persons.
The Industrial Employment (Standing Orders) Act, 1946 (SO Act) applies to employees classified as ''workmen'' and regulates the terms of the contract to ensure uniformity and protection for that class of employee. In event of any change in certain conditions of service of workmen (such as wages and working hours) which is prejudicial to them, the employer is required to give 21 days' notice (or more, depending on the state where the workmen are located) before implementing the change. Under the IR Code, the threshold for the requirement to formulate standing orders by industrial establishments has been increased. The IR Code, when in force, will replace the SO Act. The Government of India is also working with industry bodies to ensure that more relevant and industry-specific standing orders are put in place.
A collective agreement is an understanding between trade unions, who represent the interest of the workmen, and employers. Under the ID Act, it is unfair for a recognized trade union or the employer to refuse to bargain collectively in good faith with the other party.
The duration of any trial or probationary period is determined by the contract of employment or the model standing orders. Typically, a trial or probation period is 3 months but may be extended by the employer if they are not satisfied with the progress of the employee.
It is usually easier to terminate the service of a probationer as they do not enjoy all the statutory protection from retrenchment accorded to workmen.
Policies are optional and may be amended without employee consent, if drafted appropriately. However, for workmen employees, certain terms and conditions of service may only be modified after giving 21 days' notice. In addition to employment contracts, an employer usually has various policies that govern its employees' various rights and obligations – for example, leave policies.
No approvals are required for entering into contracts with employees, with the exception of the standing orders, which must be certified by the labor department. The IR Code provides that, where an employer adopts the model standing orders prepared by the government, the same shall be deemed to be certified for the purposes of the IR Code.
The Ministry of Labour and Employment has notified Section 142 of the SS Code to be effective. Under this section, any employee, unorganized worker or other person shall establish their identity or identity of their family members/dependents through the Aadhaar number for registration and avail themselves of the benefits contemplated under the SS Code. Note that other provisions of the SS Code are not yet in effect. In view of the implementation of Section 142 of the SS Code, the Employees’ Provident Fund Organization has also clarified that electronic challan-cum-return will be allowed to be filed only in respect of those employee-members whose Aadhaar numbers are seeded and verified with their respective Universal Account Number.
Last modified 17 Jun 2024
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