Laws Every HR Manager Should Know

A corporate work environment can often seem wild and rude, but there are always rules to be followed, be it company policies or government norms. Whether you’re in HR or another corporate function, you should know the laws and legal statues surrounding your work. Some laws are common for all workers while some rules protect specific sectors or industries. 

Here are the most important laws that protect your rights in the workplace:

Part 1: Fundamental Labor Law

1. The Factories Act, 1948

One of the oldest labor laws of the independent Indian republic, Factories Act was designed to provide the basic safety and security of working conditions of Indian employers. Since the economy largely contained factory operators for various sectors, the safety concerns of workers in these factories were addressed. The act laws down rules for cleanliness, disposal of wastes and effluents, Ventilation and temperature, dust and fume, etc. The act further prohibits child labor, labor exploitation, and basic and minimum wages.

2. Employees’ Provident Funds and Miscellaneous Provident Act, 1952

The main objective of the Employees’ Provident Funds and Miscellaneous Provident Act, 1952 was a payout for employees after their retirement and their dependents after the death of the employee. The Employees’ Provident Fund Organisation (abbreviated to EPFO), is the organization tasked to assist the Central Board of Trustees, Employees’ Provident Fund – a statutory body formed by the EPF & MP Act.

3. The Employees State Insurance Act, 1948

The ESI Act, 1948 introduced the Employees’ State Insurance Corporation (ESIC), a state-run self-financing healthcare scheme for employees in the formal sector in India. The Act was introduced as a scheme to provide aid to employees and their families in healthcare expenses. The employer pays 3.25% of the employees’ salary while the employee pays 0.75% of their salary. The paid amount, 4% of salary, is managed by ESIC and it oversees the provision of medical and cash benefits to the employees and their families. The ESI fund is managed by the ESIC according to rules and regulations stipulated in the Act. 

4. The Industrial Disputes Act, 1947

Act number 14 of 1947 which was legislated by the then Central Legislative Assembly was the very first bill passed for labor laws in the Indian Constitution. It was introduced for settling disputes and conflict resolution in the organised sector of Indian markets. The act extends to the entirety of India and regulates Indian labour law as far as trade unions and individual employees of the Indian Mainland are concerned. The clearly stated objective of the act is the “maintenance of peaceful work culture in the industry in India.”

5. Industrial Establishments (National and Festival) Holdings Act, 1958

Our ancestors have fought a long, hard battle to make sure that we get paid leaves to celebrate Diwali, Bakr-id, and Lohri. This law lays down guidelines for the mandatory public holidays that employees will get and will be paid remuneration for. The law is applicable state-wise since public holidays will not be celebrated the same way. Festivals of north Indian cultures may not celebrated in the south, and vice versa. To accommodate these differences, state governments issue their list of mandatory holidays in addition to the mandated national holiday: 26th Jan, 15th Aug, and 2nd Oct.

Part 2: The New Generation

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

The Prevention, Prohibition and Redressal of Sexual Harassment Act, 2013 or POSH Act, 2013, is the front runner of protecting women from harassment in the workplace. A number of companies have only recently become POSH compliant. As a company, to become compliant there must be redressal company that focuses solely and deals unanimously in cases of sexual harassment in the workplace. Following the #OfficeMeToo wave in India, companies were vigilant and proactive towards the problem. 

2. The Maternity Benefit Act,1961 (Amended 2017)

The most exploited and abused labor law due to its frequent use and unregulated nature, the Maternity Benefit Act of 1961 protects the employment of women during the time of her maternity and entitles her of a ‘maternity benefit’ – a full paid absence from work – to take care of her child. The act was amended in 2017 to increase the duration of the leave from 12 weeks to 26 weeks, inclusion of creche facility in or around the workplace, among other changes.

3. The Workmen’s Compensation Act, 1923 (Amended 2010)

The Indian worker’s compensation law 1923 was introduced on 5 March 1923. It includes Employer’s liability compensation, amount of compensation. Workmen Compensation Insurance covers employees under Workmen Compensation Act, Fatal Accident Act and common law.

4. The Payment of Gratuity Act, 1972 (Amended 2018)

This act was welcomed into the constitution to help pay workers who were injured or in some way affected by their professional operation. A gratuity in a moral sense is paid out to loyal employees of the company, the act mandates companies to give a certain amount with the intention of helping an employee monetarily after his retirement. 

5. The Payment of Wages Act, 1936 (Amended 2017)

The Act requires that payment of wages be made timely to employees and without unauthorised deductions. Section 6 of the Act stipulates that wages are to be paid only in cash and not kind. 

6. The Minimum Wages Act, 1948 (Amended 2019)

The Minimum Wages Act, 1948 sets wages according to the different sectors of the economy that it covers. The Act still sees the majority of the labor market to be unregulated and thus, the beneficiaries are extremely limited. State governments follow their own minimum wage scheduled that are set according to the nature of work and location.

7. The Payment of Bonus Act, 1965 (Amended 2015)

The Payment of Bonus Act applies to every factory and establishment which employs not less than 20 persons on any day during the accounting year. The Act provides for payment of bonus to persons employed in certain establishments on the basis of profits or on the basis of production or productivity and for matters connected therewith.

The war for a holiday on choti holi, Christmas Eve or another festival celebrated by a minority is not something new. Our forefathers fought and won a battle to provide the employees of all companies in the country with a safe and secure working conditions. This promise is not for one individual or a group of individuals, these rights are granted to every citizen equally. 
These constitutional rights have been long fought for and ignoring them daily is equal to stripping them of their judicial legitimacy. We must realise and count our privileges and work towards a better and more accessible form of the conditions.

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