LegaLogic – LEEGASEE – Monthly Newsletter – Employment Law: Rights of Employers in the wake of COVID-19 – June 2020

COVID-19 pandemic doomed the world economy and brought almost all industries and trades to a standstill. Reduced demand of goods and services led to a long-lasting economic impact. With impending retrenchment, job losses, wage cuts and lay-offs, the government swiftly swung into action to safeguard the interest of employees. Invoking powers under the Disaster Management Act, 2005, on March 29, 2020, the Ministry of Home Affairs (MHA) issued an order directing all employers to make payment of wages to their workers without any deduction during the lock down. It also imposed a blanket ban on the employer’s right to terminate its employees even on account of financial losses or redundancy. In pursuance of these orders, several other state governments, and administrative departments issued advisories/orders which echoed the decision of MHA. Initially looked upon ‘advisories’, it appeared that these notifications were treated by the regulators as a blanket suspension of the employer’s right to terminate employees/workers and/or to reduce their wages. Many employers (from various sectors) who were compelled to downsize their workforce, received ‘show-cause notices’ from the labour authorities. Soon, this also caught the unwanted media attention.

On May 17, 2020, when the lockdown 4.0 was announced, the MHA issued a notification containing the revised lockdown guidelines1 . As per this notification, except for the order annexed to the notification, all earlier orders/notifications ceased to have effect from May 18, 2020. The Home Secretary to the Government of India also clarified that the revised lockdown guidelines have been issued in suppression of all earlier lockdown orders/guidelines, except for the standard operating procedures on movement of persons. It can thus be inferred that all other notifications issued by the state government/local administrative offices pursuant to the MHA order dated March 29, 2020, would stand superseded with effect from May 18, 2020. Effectively, employer and employee rights would be governed as per the pre-Covid-19 regime. Any action by an employer (such as termination or suspension of the employees) should be taken only after following the due procedure laid down under the applicable labour laws, employment agreement and service rules applicable to the organisation and the employee. Any change to the employment terms and conditions should be made with the written consent of the employees to avoid potential disputes.

Working from Home:

The New Era of Virtual Working COVID-19 has changed the way people have been working. Technology has been a great catalyst in keeping the work going even while employees are away from their usual work environment. WFH will evolve as organisations grapple with health concerns and balances the productivity, privacy, collaboration, data theft and many more aspects. WFH policy must be framed from a complete fresh perspective. It has to have flavour of both Work from Office as well as Work from Home. Marrying regulatory aspect with the data integrity and company culture is the key to framing robust WFH policy.

Importance of Employee Invention Assignment and Non-Disclosure Agreement

Data protection and confidentiality is all pervasive. It is as much important to a manufacturing company as it is to a technology company. As they say, data is new gold. To protect company’s Intellectual property, proprietary and competitive data, employers must, without exception, frame a policy for all the employees to sign Employee Invention Assignment and Non-Disclosure Agreement (IAC) at the time of joining the company. IAC generally covers the following key aspects: § What constitutes Confidential Information and Intellectual Property (IP)? § Obligation of the employee to protect company’s IP and Confidential Information § Rights of the employers § Consequences of the breach IAC can help employers seek both criminal and civil remedies to protect its interest.

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