The Social Security Code, the Occupational Safety, Health and Working Conditions Code and the Industrial Relations Code were recently passed by Parliament and received presidential assent. The three new labour codes have been enacted in the pursuit of abridging, rationalising and consolidating central and state labour laws and improving India's position in the global 'ease of doing business' index. The three new codes mark the ushering in of a new employment and labour law regime in India.
Overall, 2020 has proven to be a watershed year for employment and HR laws in India and 2021 will see many of these changes being formalised and implemented. Employers should actively start to review their contracts and policies to adapt to the updated regime at the earliest opportunity. This article highlights the most noteworthy workplace and HR developments.
The Supreme Court is considering whether a large software company employing over 100 workers can be classed as an 'industrial establishment'. Workers in an industrial establishment enjoy greater protection, with the employer obliged to give at least three months' written notice and obtain state permission prior to the termination of employment.
Software professionals cannot be classified as workers following a recent ruling by the Delhi High Court. In this case, the manual work carried out by the professional was found to be incidental to his primary duty as a risk management consultant. This primary duty was also found to involve a considerable degree of creative input, exempting him from being a skilled worker.
Domestic labour laws tend to be pro-worker. As such, employers must take seriously their obligations under the various statutes. Once an employment relationship has been established, the employer must fulfil certain statutory obligations; non-compliance may have serious consequences, including imprisonment.
Recently, the courts have shown an inclination to enforce non-compete covenants which apply to the post-termination period, provided the injunction or restraint is sought for the purpose of protecting the employer's interests. Those interests of employers which are considered to be entitled to protection are proprietary information such as trade secrets and business connections.