Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.

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4. Results: Answers
Labour and Employment
Legal framework
Are there statutory sources of labour and employment law?

Answer ... There are as many as 165 labour and employment laws, including nearly 50 central (federal) laws, in India. The main statutes and regulations relating to labour and employment are:

  • the Industrial Disputes Act 1947;
  • the Factories Act 1948;
  • the Shops and Commercial Establishments Act, as applicable in each state;
  • the Industrial Employment (Standing Orders) Act 1946;
  • the Contract Labour (Regulation & Abolition) Act 1970;
  • the Maternity Benefit Act 1961;
  • the Payment of Wages Act 1936;
  • the Minimum Wages Act 1948;
  • the Payment of Bonus Act 1965;
  • the Equal Remuneration Act 1976;
  • the Employees’ Compensation Act 1923;
  • the Employees’ State Insurance Act 1948;
  • the Employees’ Provident Fund and Miscellaneous Provisions Act 1952;
  • the Payment of Gratuity Act 1972; and
  • the Trade Unions Act 1926.

Both central (federal) and state governments have specific rules setting out the procedure for proper enforcement of a statute. In India, states have some statutes that deal with specific issues under the umbrella of the broader federal statutes.

For more information about this answer please contact: Tushar Chowdhary from Kochhar & Co.
Is there a contractual system that operates in parallel, or in addition to, the statutory sources?

Answer ... In addition to the labour and employment statutes, the employment relationship may be governed by the employment contract (provided that the terms thereof are no less favourable than those under the applicable statutes).

For more information about this answer please contact: Tushar Chowdhary from Kochhar & Co.
Are employment contracts commonly used at all levels? If so, what types of contracts are used and how are they created? Must they be in writing must they include specific information? Are implied clauses allowed?

Answer ... In India, most labour and employment laws are applicable to employees in the category of ‘workmen’ (ie, blue-collar employees). A ‘workman’ is defined under the Industrial Disputes Act 1947 as a person who is employed to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, excluding a person:

  • who is employed mainly in a managerial or administrative capacity; or
  • who, being employed in a supervisory capacity, draws a salary exceeding INR10,000 per month or exercises functions mainly of a supervisory or managerial nature.

Apart from certain labour and employment statutes that may apply to other categories of employees, the employment relationship for such employees is usually governed by the employment contract.

The Companies Act 2013 further provides for the passing of a resolution and the conclusion of an employment contract for the appointment of a managing director of a company.

Although there is no specific requirement that an employment contract be in writing, some employment statutes or state-specific statutes (or both) require an employment contract covering limited aspects to be issued. As a matter of good corporate practice, written employment contracts are executed between the employer and the employee, or a detailed written appointment letter is issued to the employee whose terms must be duly accepted and acknowledged by the employee.

The employment contracts generally used in India include the following information:

  • name and address of employer and employee;
  • job title or nature of work (or job description);
  • place of work;
  • probationary period, if any, and its duration;
  • option of the employer to transfer an employee from one office to another branch office, affiliate or similar;
  • date of commencement of employment;
  • wages or salary details;
  • any concessions or benefits to which the employee is entitled;
  • type of contract – permanent or fixed term;
  • period of notice required for termination of employment;
  • leave entitlement;
  • conditions under which the employer can terminate the contract;
  • non-compete, confidentiality and non-solicitation provisions; and
  • working hours.

The provisions of employment contracts may depend on the nature of employment and different rules may apply for fixed-term employees, apprentices and permanent employees.

For more information about this answer please contact: Tushar Chowdhary from Kochhar & Co.
Labour and Employment