15 Laws and Regulation that every HR Manager should be aware of

HR Managers are responsible for shaping the overall growth of the company. Right from recruitment, induction, training and development to performance assessment and grievance resolution, they are responsible for the performance, retention, and satisfaction level of employees. From the legal point of view, Law plays a very important role in the duties of an HR Manager though it may not always be evident. For instance, hiring is accompanied by contracts, which are regulated by the Indian Contract Act, 1872. Firing may require one to follow the provisions of different contracts, ensure that any intellectual property created by an employee is protected in favour of the company, and that proper disciplinary actions take place if someone is being fired due to a breach of the code of conduct.

Laws and Regulations that Every HR Manager should be Aware of

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

Human resource professionals are responsible for creating a safe environment in an organisation and protecting it. They also have a huge contribution towards creating a positive and safe experience for employees in the workplace. Taking initiatives to stop any form of harassment and inculcating ways to convey that harassment will not be tolerated at any cost are also a part of creating a safe and positive working environment.

The Act is commonly known as POSH Act. The act aims to create a safe and conducive working environment for women and provide protection against sexual harassment.

Key Takeaways

Certain steps can be taken by HR in order to create a safe workspace, such as:

• Active participation in policy drafting and informing employees about the policy.
• Display the organization’s policy in conspicuous places of the organization.
• Ensure that the complaint process is smooth and the employees know the details about the Internal Complaints Committee (ICC) members.
• Coordinate with the Internal Committee members to organize training for employees, managers and IC members. The training should be conducted at least twice a year.
• Assist the complainant if he/she wishes to file a complaint under the Indian Penal Code and ensure their rights are protected.

When leaders of an organization have a clear vision that they have zero tolerance for harassment, it sends a very strong message to the employees and helps in creating a very respectful and harassment-free workplace. This conveys that everybody is equally treated, and discrimination in any form will not be entertained.

2. The Apprentices Act, 1961

The law related to trainees in India is complex in nature since they are considered to be trainees and employees at the same time. The application of the Apprentice Act is applicable to the companies that are registered under the said act. This act is a landmark piece of legislation that was passed by the Indian Parliament to regulate the apprenticeship system within the country. It provides various benefits to apprentices, such as Financial security, Job security, Social security, Education and training, Protection from exploitation, etc.

The main purpose behind the act is to provide for the regulation of the training of the apprentices in industry and to ensure that proper standards of training, wages and other conditions are maintained.

Key Takeaways

• There are certain obligations of employers upon apprentices, such as the employer shall provide the apprentice with training in the trade in accordance with the provisions of the Apprentices Act and the rules made thereunder and in the terms of the contract of Apprenticeship.
• An employer is bound to look after the health, safety and welfare of Apprentices.
• If a personal injury is caused to an apprentice by an accident arising out of in course of his training as an apprentice, his employer shall be liable to pay compensation according to the provisions of the Workmen’s Compensation Act.

Hence, this act is a step towards ensuring quality apprenticeship training in India and providing better job opportunities for the youth.

3. The Maternity Benefit Act, 1961

Maternity Benefit Act, 1961 is an act to regulate the employment of women in certain establishments for certain periods before and after childbirth and to provide for maternity benefits and certain other benefits. The act also puts some obligations on the part of the employer. A pregnant woman can claim the benefits under the Maternity Benefit Act, 1961 only after she has worked with the organization for a period of up to 80 days. After she resumes work, the act provides for a provision of light work for up to 10 weeks.

The objective of this act is to safeguard the dignity of motherhood and provide protection to both mother and her child.

Key Takeaways

• The act ensures the right of a pregnant woman even after her delivery when she is at home taking care of her child.
• The Maternity Benefit Act after all the amendments covers the majority aspects of leaves and the other benefits to the mothers-to-be to facilitate and help to raise their children in the very crucial initial months of their life as taking care of the children is a fundamental right of both the mother and the child.

4. The Payment of Gratuity Act, 1972

Payment of Gratuity Act, 1972 is a type of legislation in India that falls under labour laws. This law applies to India with at least ten workers. A gratuity is a form of financial compensation given to employees by an organization as a token of gratitude for the work done.

The purpose behind this act is to acknowledge the contribution of employees towards company’s growth and development.

Key Takeaways

• The amount is usually calculated on the basis of the employee’s service tenure and last drawn salary. It is usually given to employees who have served the company for a minimum period of five years. It gives their hard work and dedication recognition.
• Gratuity is paid at the time of Retirement, Resignation, Death or Disability. There are certain conditions for termination of gratuity, such as Misconduct, Resignation before completing 5 years of service, Termination due to disability or death or if the employee is on a contractual basis.
• If an employee is terminated due to a disability or death, the employer must pay the gratuity amount to their legal heir or a nominee. It must also be noted that an organization cannot refuse payment of gratuity to an employee on account of bankruptcy. No order of the court will be able to withhold this action.

Hence, the gratuity amount encourages the employee to work efficiently and improve productivity. This act overrides other acts and statutes in relation to gratuity. The only need of the hour is to change or modify the implementation of the act as this act is still not followed in many companies.

5. The Employees Provident Fund Act, 1947

This act is enacted as a social security measure which falls under the ambit of “retirement benefit”. Both the employer and employee contribute their part but the whole part is deposited by the employer. There are four types of provident fund, such as Statutory Provident Fund (SPF), Public Provident Fund (PPF), Recognized Provident Fund (RPF) and Unrecognized Provident Fund (UPF). In addition to it, there is a Universal Account Number (UAN). It is a 12-digit number allotted to the employee, and it is contributed to EPF.

The act is kind of a retirement benefit and the purpose of this act is to inculcate non withdrawable financial benefits, the sum is payable normally on retirement or on the death of an employee.

Key Takeaways

• Since UAN remains the same throughout, it will help in the easy withdrawal of claims and transfers.
• Therefore, this act is mainly created with the objective of encouraging saving during the period of employment where it can be used in old age, sickness or for any uncertainty.

6. The Factories Act, 1948

The object behind this act is to protect people from being subjected to too lengthy periods of physical exertion or manual labour. For any regulations related to working conditions, knowledge of this act is a must for HR Managers. The act also states that the working hours should not exceed 48 hours. Complying with the provisions of this act can be a boon for the company as it can effectively avoid labour conflicts in the future.

The Factories Act, 1948 provides basic rights and interests of workers and ensures to provide them with basic amenities like proper sanitation, ventilated workspace, safety for using machinery, etc.

Key Takeaways

• The act specifies the working hours of employees, paid time off, paid overtime, age restrictions, etc.
• Additionally, it details the protection of human health, safety and protection in the factory.

7. The Workmen’s Compensation Act, 1923

The Workmen’s Compensation Act was made to offer compensation to workers in case of any accident. Though there are security departments present in the factories which keep a check that every worker is obeying the guidelines, however, it is also the responsibility of an HR manager to ensure that the necessary tools and equipment are provided and complied with.

The act ensures that the rights of the laborers are protected even after they have encountered some disability or death due to an accident during their employment.

Key Takeaways

• In case of non-compliance, the employer will be liable for criminal proceedings.
• Therefore, employers are obligated to offer compensation to their workers who encounter injuries due to death or disablement during the time of their employment.

8. The Payment of Wages Act, 1936

The Payment of Wages Act, 1936 governs the way wages are paid to employees. The act keeps a check that the salary is paid on time and without deductions unless specifically permitted by the act.

The purpose behind this act is to safeguard the employees from unlawful employer deductions and acts as a guide to ensure that any such hurdle is avoided.

Key Takeaways

• The HR role comes into the picture to check that the due wages are credited to the workers timely and without any unjustifiable deductions. The act serves as a guide to avoid any complications. In order to avoid future conflicts, HR managers should be very well-versed with the provisions of this act.
• Hence, the act allows workers to work without any fear of being hampered by pay or salary delays.
• The legislation has paved the way for employees to work with dignity and without any fear.

9. The Industrial Disputes Act, 1947

The Industrial Disputes Act, 1947 governs all the industrial entities in India that employ one or more people. There used to be differences of opinion between the employer and the workers, which led to conflict. These issues were brought to the attention of the government and hence the legislation was passed.

The purpose behind the act is to settle the disputes amicably, it is a peaceful tool for resolution.

Key Takeaways

• Thus, the act ensures peace and harmony among all the industrial establishments and in case of conflicts the provisions of the act serve as a guide in solving the issue in a systematic manner.
• The decision must be fair and just.
• The act covers the provisions from working hours to conciliation between the company and its employees.

10. The Payment of Bonus Act, 1965

The Payment of Bonus Act 1965 imposes a contractual obligation on employers to pay bonuses to the employees as a reward for their contribution towards the company.

The intention behind this act is to give employees a say in the company’s profits and to enable them to earn a slightly more than the minimum wages.

Key Takeaways

• As per the act, any employee drawing a salary or wage not exceeding ten thousand rupees per month is eligible for bonus.
• Hence, the act is a step forward to thank the employees for their contributions towards earning profits through their management and labour.

11. The Employees State Insurance Act, 1948

The Employee State Insurance Act was enacted to offer security and protection to the employees of India and its respective states. As per this act, an employer is required to cover the expenses through insurance. The act provides health and medical benefits to all the employees and up to 6 dependents of the employees.

The purpose behind this act is to provide help in case of sickness, funeral, accident, injury, maternity, etc.

Key Takeaways

• For working-class employees in India, the ESI Act is beneficial and works in their favour, while also providing benefits for sectors outside of that working class.
• As per this act, an employer covers expenses in cases of tragedy, funeral, maternity sickness, etc.

12. Child Labour Regulations (CLR)

Child Labour is a serious concern as it is a complete violation of the fundamental rights of a child. The government is very much alert to ensure that child labour is completely banned in India. Children below the age of 14 years are strictly prohibited from employment. Child labour usually deprives children of their childhood, their potential and their dignity that harms them mentally and physically.

The Constitution of India provides proper development and protection of children with the idea of safeguarding them by providing certain articles specifically for children.

Key Takeaways

• The Child Labour (Prohibition and Regulation) Act, 1986 aims to ban child labour in some industries and regulations of working conditions where employment of child labour is permitted.
• The starving poor children work to feed themselves. The loop will not vanish until and unless poverty among children is not eliminated.

13. The Trade Unions Act, 1926

A trade union consist of an organized group of workers, and they help the workers on critical issues such as fairness of pay, good working environment, hours of benefits and other benefits they are entitled to.

The purpose behind the act is to settle disputes amicably as Trade Unions act as a link between the management and the workers and the act is passed for controlling and managing the work of trade unions.

Key Takeaways

• Since Human Resource Management is directly related to the performance of workers, they have to coordinate with trade unions for the smooth functioning of employee welfare.
• As Trade unions represent the demands and needs of the workers, they form an important part of the democratic development in the country.

14. The Equal Remuneration Act, 1976

In order to treat women in a fair and just manner and to avoid any kind of discrimination against them, the Equal Remuneration Act, 1976 legislation was brought into force. It believes in the concept that when two workers are doing the same work, they should be paid equal wages.

The main objective behind this act is to provide equal remuneration to both men and women.

Key Takeaways

• Earlier women used to face heavy discrimination in terms of pay, however, the scenario has changed after the advent of this act.
• Women are able to sue for malpractices prevailing in their workplace.
• The Equal Remuneration Act, 1976 helps in linking the gap between unequal remuneration faced by the women of our country.
• With the successful implementation of the act, India is moving closer to treating men and women equally in terms of pay too.

15. The Minimum Wages Act, 1948

The purpose behind the Minimum Wages Act, 1948 is to secure the welfare of both skilled and unskilled labourers in India. As per the provision of this act, a person must be paid at least a minimum wage which is fixed by the government. Every woman shall be paid the same wage for the same kind of work as that of a man, i.e., equal to the man and not less.

The main motive behind the act is to ensure that the employers cannot exploit the workers with the lower rates.

Key Takeaways

• The act also states that even if a worker agrees to work on less wages than prescribed by the government, the employer is still bound to pay the minimum wage.
• Hence, the fair wage system helps maintain a level of employment and tries to increase the same by considering the company’s ability to bear the expense.

Hence, it is very important for HR managers to be very well aware of these laws and make significant contributions through various policies. Human resources with adequate legal knowledge can help a company run in a smooth manner.