What are the Labour Laws in HR?

HR managers play a vital role in shaping the growth of a company/organization. Roles such as- inducting, recruiting, performance assessment, training and Development, and grievance resolution, they are hold responsible for retention, performance and satisfaction of the employees.

The “Law” has an important role in the performance of any HR manager. Although not always its apparent. For instance- hiring is accompanied by contracts and also possible negotiation. While firing may require them to follow the provisions of different contracts. Also, ensure that any intellectual property created by an employee or a consultant is protected and secured in favour of the company. And that proper disciplinary proceedings take place if someone is being fired for a breach in the code of conduct, sexual harassment, etc.

The reasons to adopt this

Thus, this is one of the primary reasons why every HR course needs to have a legal module. However, this is usually covered in the way that very scared patients go through a root canal. You close your eyes through the ordeal and try to forget the experience as soon as it is over. With exceptions, of course, most fresh candidates who have specialized in HR have precisely little practical knowledge about labour and employment laws, or any other law that may be relevant to their work.

However, as you move up the chain, your legal knowledge becomes indispensable. For Instance: “if you are drafting a leave policy for a company, and fail to check the relevant Shops and Establishments Act of the state, you will almost certainly get it wrong”. The consequence can involve heavy fine by the company if an inspector comes visiting.

To understand it better

Let’s take another example. If an organization has more than 25 or more employees. Then employment Exchange i.e. Compulsory notification of vacancy Act, 1959 mandates a private establishment to give a public notification to certain employment exchanges. While, most HR managers have no clue about this law and resultant their employers may have to end up paying big fines and dealing with legal hassles because of non-compliance.

Internal turmoil, decline in productivity of individuals, unhealthy leadership, retention failures, even corruption and nepotism, are mostly first registered to the Human Resources Personnel. Since most of such issues have various legal implications and angles. Thus, needs the consideration at a senior level to be addressed. However, when disastrous and expensive legal proceedings are assessed retrospectively. It is often found that the root was in unaddressed concerns. Hence a good HR can see these concerns ahead of time and address them. Therefore, saving the resources of the company in a big way.

While all these could be avoided by a smart and legally aware HR manager who fixes that clause. Resultant ensuring that there is a bankable arbitration procedure to enforce the clause. And create awareness amongst employees about how serious the company is about enforcing the non-compete obligation.

So, if you are an HR manager, here we have enlisted statutes and regulations you could learn about and help your organization succeed:

1. Sexual Harassment (Prevention, Prohibition and Redressal) Act, 2013

This act is just 5 years in age and has already taken the private business sector by the storm over the last few years. As, in most of the cases, HR managers are the first recipient of a sexual harassment complaint. Also, they are actively involved in drafting of Sexual Harassment Policies and formation of Internal Complaints Committee. What if the committee completely mishandle a hearing? Would that reflect well on the company or the HR manager? Hence, even if the HR manager is not part of sexual harassment committee, s/he should have a good understanding of the law, compliances and procedures involved.

2. The Factories Act, 1948

Factories are often identified with labour issues and inspector raj. So, whether it’s for numerous compliances or for or any regulations related to working conditions, the knowledge of this act is necessary for HR managers. More and more large companies, especially MNCs are now approaching consultants and training institutes to get trained their HR managers about Factories Act compliances.  So, if you work in an organization that deals with manufacturing or has factories, then it is important for you to know about this act whether your organization takes the initiative or not. Individual HR managers who want to learn about Factories Act will be better off taking up a Certified Labour Law Certification course.

This act prescribes the basic rights and interests of the workers, and the guarantee to provide them with basic amenities like proper sanitation, ventilated work space, safety for using machinery etc. The maximum working hours are prescribed are not more than 48 hours in a week. Therefore, compliance with this act can act as a boon for this company as it can effectively avoid labour conflicts in the future.

3. The Employees Provident Fund Act, 1947

This act is sighted to provide a kind of social security to the industry employees. So, if you have an employee which is working in your factory or in association with the work of your factory, s/he is entitled to become a member of this fund. The benefits like retirement pension, medical care, housing, family obligations, education and benefits arising out of insurance, rights of older employees post retirement, are few aspects which are covered under this act.

4. The Apprentices Act, 1961

An apprentice is a person who is learning from a skilled employer, who has agreed to work for a fixed period of time. So, if your organization offers apprenticeship then you need to make the policies for them as per this act. The act allows you for: casual leave for 12 days, medical leave of 15 days and extraordinary leave of 10 days in a year. 

5. The Maternity Benefit Act,1961

It is perhaps the most known act in this list. This act is aimed at providing full benefits and protection to the to be mother and her child during the time of maternity in the form of paid maternity leaves. However, let’s try to understand the provisions.

For an instance: If a pregnant woman has worked in your organization for a period of 80 days. Then she is entitled to maternity benefits under the act. The act also provides for provision of light work, up to a period of 10 weeks, after she resumes work.

6. The Workmen’s Compensation Act, 1923

If you are an HR then you need to know the sort of liabilities your organization might have in case of any labour accident. Although, there are security departments in the factories ensuring every individual is following the safety guidelines. However, as an HR it is your responsibility to ensure that the necessary tools and equipment are provided and complied with. You need to know that all of the regulations and guidelines are created in cohesion to this act so that unnecessary future liabilities can be avoided.

So, what is this act?

It is an act which in case of an injury or accident at the time of work, provides financial protection to the workers or their dependants. It actually provides for financial compensation in the case of any such accident. So, in case of non-compliance, the employer is liable for a criminal offence.

7. The Payment of Gratuity Act, 1972

Gratuity is actually a part of the salary, that employees receive from their employers. As a token of gratitude for the services they have performed during their employment tenure. It is one of the many retirement benefits that they are entitled to.

If an employee has completed one year of service in an organization, then s/he is entitled to gratuity. Therefore, the HR manager is required to know about this act. So that in case of an mishappening with an employee who has completed one year of continuous service in a company, or in case of retiring individuals, must be awarded with basic gratuity.

8. The Payment of Wages Act, 1936

As an HR it is your responsibility to see and check that the due wages are credited to the workers on a monthly basis and without any hassle and unnecessary deductions. This act is a guide to ensure that any such discrepancies can be avoided. This act provides standards for assessing the remuneration of the employees. A nd ensures that the salaries are governed as per the industry standard. This is an act meant to give you and your employee an equal bargaining power. It is a must know to avoid any future conflicts.

9. The Industrial Disputes Act, 1947

This act covers- right from the cap on working hours to provision of conciliation between the company and its employees.

With a focus to settle the employer-employee disputes amicably. As it is a tool for peaceful resolution. It is utmost important for you to ensure that the employee is given at least a minimum of six weeks’ notice before getting fired. Mostly the issues such as: wages, holidays, working hours etc, or anything that can cause a dispute, which must be cohered to form a part of the act.

10. State Wise Factories and Establishments (National, Festival and other Holidays) ACT.

So, if you’re an HR then you are required to consciously comply to these rules, while deciding the leave policy. Based upon the religious and cultural beliefs of a particular state these rules decide the national and state leaves which are. Thus, as an HR it is your responsibility to ensure that cultural sentiments of any employee is not hurt. And their happiness quotient in your organization remains on a constant high.

11. The Payment of Bonus Act, 1965

This act is focused to provide bonus to the employees of certain industries and establishments. If his salary is above 15,000 and he has worked for a minimum of 30 working days in a year. Irrespective of skilled or unskilled work every employee/worker is entitled to a bonus every accounting year.

12. The Employees State Insurance Act, 1948

This statute acts as a self-financing security for every employee in India. As, the employer is entitled to contribute a 4.75% of the 6.5% of insurance to all the employees. Those who are earning 15,000 or less per month. This act provides health and medical benefits to all the employees and up to 6 dependents of the employees. In case of a tragedy, funeral, accident, medical contingency, injury, maternity and sickness, an employer is required to cover the expenses through an insurance as per this act.

13. Child Labour Regulations (CLR)

This is one of the most important regulation. The government is more proactive than ever to ensure that child labour is completely banned in the country. However, the latest amendment in 2016 has relaxed the guidelines a little. The employment of children who are below the age of 14 in all occupations and professions is prohibited.

Although, there are now certain exceptions to the law. So, if you are working in the entertainment industry or a non-hazardous industry, then children above the age of 14 years can work after the school hours. And if all the amenities under the law are provided to them.

To wind up

Although there is a list of laws, apart from the above listed that a company needs to comply with. Which is the sole responsibility of the HR managers. So, it becomes important that an HR manager is well aware and making significant contributions through various policies. This is because Legal awareness and human resources if combined can produce a very inclusive workspace. Resultant which could significantly enhance a company’s productivity. You can learn more about such laws to ensure your company is free from all kind of future troubles.

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