Nov 17,2022 | 12 min read

Overview of the Employment Laws of India , Philippines & Thailand

India: Employment laws have historically been governed by contracts as well as numerous, disjointed laws, both at the centre and state levels. The Ministry of Labour and Employment (the "Ministry") introduced four bills in 2019 to combine 29 central laws related to labour laws in order to harmonize and consolidate the various legislations pertaining to employment, social security, wages, industrial disputes, and other relevant labour/employment related matters. These four bills are: The Code of Wages, 2019, The Industrial Relation Code, 2020, The Occupational Safety, Health and Working Conditions Code, 2020 and The Code on Social Security, 2020.

 

A look into these four codes will give us a better understanding of the current employment laws in India. 

 

The existing definition of "employee," which was included in the Minimum Wages Act of 1948, has been amended by the Wage Code, 2020. The term "employees" was previously limited to those who held certain types of scheduled employment under the Minimum Wages Act of 1948. However, under the Wage Code, this definition has been expanded to include all establishment types, regardless of whether they are part of the organized or unorganized sector. This suggests that the benefits under the Wage Code with regard to payment of wages and minimum wages to all employees, including those engaged in manual, operational, supervisory, managerial, administrative, technical, or clerical work, and regardless of whether the terms of employment have been expressly conveyed or merely implied, thus widening the ambit. The enormous number of workers in India's unorganized sector, who frequently lack written contracts to rely on, will greatly benefit from this breakthrough.

 

The Industrial Relation Code, 2020 has amended the following acts i.e. (i) The Industrial Disputes Act, 1947, (ii) The Trade Unions Act, 1926; and (iii) The Industrial Employment (Standing Orders) Act, 1946. In places where there are multiple trade unions, the IR Code has established a "single negotiating union." It is necessary for such a sole bargaining union to have 51% or more workers as members. Terms with the employer may only be discussed by the one negotiating union.The IR Code provides provisions for workers to secure their employment after being laid off.

 

The Occupational Safety, Health and Working Conditions Code, 2020 (“OSH Code”) outlines specific obligations for every employer with regard to the workplace and workers. According to the OSH Code, the employer must also establish and maintain welfare programmes for workers as may be required by the Central Government and to ensure that they live decently. 

 

The Social Security Code, 2020 was enacted to reform and codify the social security laws with the intention of extending social security to all employees and workers in both organized and un-organized sectors, as well as any other sectors. One notable change brought about by the SS Code is the inclusion of benefits for platform workers and gig workers within its purview. 

 

Philippines: All employment-related matters are governed by the Philippine Labor Code. This law outlines the guidelines for employment in the nation, including selection procedures, working conditions, benefits, hours of operation, and termination. Every facet of employment in the Philippines is regulated by the country's employment laws. The following areas are specifically covered under the labour code:Offices and Government agencies responsible for regulating employment laws; Training policies for employees and special workers; Work conditions - working hours, holidays, and leaves; Work conditions for employees in special groups - minors, house helpers, homeworkers, and night workers; Health, Safety, and Social Welfare benefits; Unfair Labor Practices and Post-employment - Termination and Retirement.

 

Thailand: Except in a few industries, Thai labour law does not statutorily require written employment contracts. Oral employment contracts are widely recognized by Thai labour law. In medium and large organizations, written employment contracts are frequently employed; however, employees of small enterprises typically do not. Additionally, it's typical for employees in rural and agricultural sectors to lack a written job contract. Under Thai law, trade unions are officially recognized and protected. They have the ability to collectively bargain and, in some circumstances, to organize strikes. The Thai labour laws also recognize various forms of employee-oriented organizations than trade unions, such as employee committees, welfare committees, and labour federations, each of which has certain legal obligations and protections.

 

A clearer structure is depicted through Tabular form:

 

Details

India

Philippines

Thailand

Types Of Employment

1.     Full Time Employee

2.     Part Time Employee

3.     Independent Contractors

4.     Seasonal Employee

5.     Temporary Employee

 

1.     Regular Employee

2.     Project Employee

3.     Seasonal Employee

4.     Casual/Temporary Employee

5.     Fixed Term Employee

6.     Probationary Employee

Employment contracts are either fixed-term or open-ended. The law does not distinguish between different types of workers, and therefore blue collar and white-collar employees are afforded the same protection under the labour protection laws.

Leave

Under Factories Act, every worker who has worked for a period of at least 240 days or more or more in a factory during the calendar year shall be allowed during the subsequent calendar year, year with wages for a number of days calculated at the rate of (a) one day for every twenty days worked in the case of adults i.e. 18 leaves per year, and (b) one day for every fifteen days worked in the case of children.  Under the Shops and Establishment Act, five privilege leaves are granted for four months of work, i.e. 15 leaves per year

Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.

Employees are entitled to at least six working days of paid annual leave each year once they have completed one year of service. There are also 13 official public holidays each year.

Working Hours

The daily and weekly working hours have been restricted to 12 hours and 48 hours, respectively, under the new labour codes. This has made it possible to introduce a 4-day work week (assuming 12 working hours every working day in the week)

Shall not exceed 8 hours a day

The maximum working hours are generally eight hours per day or 48 hours per week.

Overtime

The maximum amount of overtime hours for employees has raised from 50 hours (under the Factories Act) to 125 hours (under the new labour laws). This would provide businesses the flexibility to switch to a 4-day work week

Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof.

 

For work performed in excess of the maximum number of hours fixed by regulation i.e. 8 hours a day and not more than 48 hours a week, employees would generally be entitled to overtime compensation. Strictly speaking, by law, the employer would be required to obtain the prior consent of the employees before requiring them to work overtime.

Maternity Benefits

It is 26 weeks for working women for those who work in an organization with a minimum of 10 employees.  If a woman adopts a child under the age of 3 months, then she is eligible for a leave of 12 weeks and the same is applicable to the women who is already a mother of two.

 

The benefit consists of one hundred five (105) days maternity leave with full pay and an option to extend for an additional thirty (30) days without pay. For a qualified solo parent, the female employee is granted an additional fifteen (15) days maternity leave with full pay.

Female employees 98 days of maternity leave, which includes leave taken for pre-natal examination before the delivery date, and holidays during that period. An employee is entitled to full pay of up to 45 days of wages during the maternity leave.

Compensation Structure

= Basic pay + Dearness allowance + HRA + Overtime pays

Basic Pay+ Overtime+ Bonuses/Reimbursement

Minimum wage+ Allowances+ Contributions +Overtime pays

Social Security Benefits

Medical Benefit, Pensions Scheme, Provident Fund Scheme, Deposit Linked Insurance Scheme, Payment of Gratuity, State Insurance Scheme, Unemployment Allowance, Disability Benefits etc.

Medical Benefits, Rehabilitation Services, Disability Benefits, Employer’s Contribution, Compensation Commission etc.

Employees and employers must contribute equally to the Social Security Fund which covers sickness, maternity, disability, death, child allowance, old age and unemployment funds. The contribution rate is 5% of an employee’s monthly salary from each of the employer and employee, subject to a maximum contribution of THB750 from each of the employer and the employee.

Notice Period

The applicable labour codes usually prescribe a notice period of 30 days, but the same depends on various factors (including but not limited to duration of employment and reason behind termination) and diverse state laws.

An employee may terminate employment for any reason by serving notice to the employer at least 30 days in advance. Where the employee fails to give notice, the employer may hold the employee liable for damages. There are no specific categories of employees protected from dismissal under Philippine law.

Termination for cause is without notice and statutory severance pay. There are strict and limited grounds on which employers can terminate for cause.

Statutory minimum notice of between one actual prospective pay period and three months applies where employment is terminated without cause. In such a situation, statutory severance is payable to employees with 120 days or more service, ranging from 30 days’ salary to 400 days’ salary depending on length of service.

Redundancy

/Severance Payments

The Industrial Disputes Act of 1972, states that retrenched (involuntarily dismissed) workmen must be given 15 days of severance pay for each year of service that they have completed.

Depending on the authorized cause of termination, severance pay should be equivalent to either one-half (1/2) month or one (1) month pay for every year of service, a fraction of at least six (6) months is considered one (1) whole year.

If employed more than one year, but less than three years, employees are entitled to severance pay equal to three months' salary. If employed more than three years, but less than six years, employees are entitled to severance pay equal to six months' salary.

Grievance Management Process By Law

In case of any dispute, they may directly approach the conciliation officer in the district to register their grievances. Labour Court, Industrial Tribunal and National Tribunal adjudicate the matters referred to them and pass the “award” which is binding upon the parties to the disputes.

Labour Arbiters shall have original and exclusive jurisdiction to hear and decide the case within thirty (30) of the submission of the case and the Commission shall have the appellate jurisdiction over the cases decided by the Labour Arbiters.

Employment disputes can be filed directly with the labour court or initially raised with the Labour Inspection Officer, who has the authority to observe the working conditions of the employee and the terms of employment before issuing an order if the employee should be entitled to receive any compensation. Parties however, are entitled to disagree with any decision by the Labour Inspection Officer and escalate the matter to the labour court, which has jurisdiction over any employment dispute under Thai law.

 

References:

  1. https://iclg.com/practice-areas/employment-and-labour-laws-and-regulations/china
  2. https://www.guidemesingapore.com/business-guides/managing-business/hr-management/guide-to-singapore-employment-act
  3. https://iclg.com/practice-areas/employment-and-labour-laws-and-regulations/philippines
  4. https://www.mondaq.com/india/employee-benefits-compensation/1098964/employment-laws-in-india-changes-brought-about-by-the-new-labour-codes

 


 


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ABOUT THE AUTHOR


Kanchan Khatana

"Kanchan Khatana and Associates is one of India’s leading Law firm with its Head Office in Gurgaon, Haryana, India with network offices across India. We are an ISO 9001:2015 certified organization.Kanchan Khatana and Associates is known for its in depth research skills and strategic advice, coupled with prompt and effective turnaround. Our aim is to provide pragmatic, solution-oriented and technically feasible advice to our clients. We focus on providing practical and innovative solutions. "

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