The Human Resource Policy (HR Policy) of any organisation prescribes its internal set of rules & regulations applicable to employees. These rules & regulations are based on a combination of statutory requirements (including sector specific requirements), general ethical considerations and the organisation’s own set of values.

 

One of the key purposes of an HR Policy, and the subject of this note, is ensuring compliance with employment laws.

 

The subsequent paragraphs discuss certain common aspects that should be covered in every HR Policy.

 

1. Code of Conduct

 

This should contain the rules to be followed by employees on a routine basis such as attendance, dress code, media policy, organisation’s property usage norms for the employees, etc.

 

2. Wages

 

An organisation needs to comply with statutory guidelines, orders, and government notifications in respect of payment of wages to its employees. For example, the new labour code i.e., Code on Wages, 2019 (once implemented) needs to be complied with by the employers in terms of different rates of wages for a skilled and unskilled worker, timely payment of salaries, permitted deductions, retrenchment/lay off wages, etc.. Further, it must be ensured that the salaries of employees are paid in consonance with the minimum wage limit prescribed by respective State Government where the organization is located.

 

3. Social Security

 

In India, there are numerous legislations which requires payment of social security benefits to all levels of workers. For instance,  gratuity is one of the ways to appreciate continuous employee’s service towards the organization upon separation with the organization after completion of 5 years of continuous service. Payment of provident fund contribution provides income security during employee’s retirement. Other social security benefits in India includes pension schemes, medical benefits, disability benefits, maternity benefits, payment of cess to construction workers etc. The Central Government has now introduced Code on Social Security, 2020 which subsumes extant social security benefit legislations into one comprehensive legislation. The Code on Social Security, 2020, which is yet to be implemented will mandate framing of social security policy / schemes for both organized and unorganized sector workers, and timely payment of these benefits to the employees in manner as provided under the said Code.

 

4. Leaves

 

The leave policy should prescribe the number and type of leaves available to employees (which should be equal to or above the statutory thresholds) and the process for, or circumstances in which, these leaves can be availed. Both the number and type of leaves are statutorily prescribed in India.

 

Indian employment laws also provide for carry-forward or encashment of unused leaves, and same must also form part of the HR Policy. Almost all of these requirements are state specific and have to be evaluated on a case-to-case basis.

 

5. Maternity and Paternity Benefits

 

Maternity Benefits are prescribed under the Maternity Benefits Act, 2016 and every organization which employs more than 10 persons is governed by it. The HR Policy should include the prescribed maternity benefits, the process for availing the same and other incidental matters. While there is no legislation in India governing paternity leaves, companies may at their sole discretion provide paternity leaves to its male employees.

 

6. Termination of Employment

 

The HR Policy should prescribe the process for termination of employment. For further guidance on termination, please refer to guidance note on employee exits.

 

7. Policy for Prevention of Sexual Harassment

 

Under Indian laws, employers are required to undertake prescribed steps to prohibit and prevent sexual harassment at the workplace and constitute an ‘Internal Complaints Committee’ for timely and fair redressal of complaints of sexual harassment. Therefore, a prevention of sexual harassment policy should form part of the HR policy. This policy should clearly enlist acts which constitute ‘sexual harassment’, and also contain provisions for prevention of discrimination, complaint process, procedure of conducting inquiry and consequences.

 

8. Work from Home

 

The outbreak of COVID-19 has made working from home the new norm for organisations across the globe. Though there is presently no law in place which governs working from home in India, the employers may in the HR Policy provide a clear and definitive guideline regarding the work timings, procedures, deliverables, leaves, data privacy and confidentiality, etc. 

 

9. Data Privacy and Confidentiality

 

Indian laws concerning data privacy and protection are evolving at a rapid pace to catch-up with global standards. A robust HR Policy should ensure compliance with Indian data privacy laws and specify the measures taken by the organisation to protect personal information provided by the employees, customers, etc.

 

This would include setting up adequate safeguarding systems within the organisation's physical and digital data repositories to prevent unlawful disclosures, consequences of unlawful disclosures, grievance redressal mechanisms etc.

 

In addition to data privacy, the HR policy should also prescribe the rules and regulations applicable to management of confidential information of the company and make employees aware of the consequences of leaking or sharing company's confidential information. This should complement the employment contracts and non-disclosure agreements signed by the employees on joining.

 

10. Equal Opportunity Policy

 

Under Indian laws, employers are required to undertake prescribed steps to ensure equal employment opportunities are ensured for people who have disabilities. This means that there should be systems and processes which ensure that persons with disabilities are not at any disadvantage compared to their other colleagues. The law also requires that employers formulate an "Equal Opportunity Policy" which sets out the amenities to be provided to persons with disabilities. It is advisable that an Equal Opportunity Policy should form part of the HR Policies of all organisations.

 

In establishments employing 20 or more employees, this Equal Opportunity Policy should also identify jobs that are suitable for persons with disabilities, the recruitment process for such roles, trainings provided for these roles, preference in transfer and posting, special leaves, assistive devices and measures taken to ensure barrier-free accessibility.