Employee Onboarding and Separation: Long-standing Industry trends and why Employers must revisit them

Employee Onboarding

The contours of Employee Life Cycle are undergoing swift transformation. Both employers and employees are looking forward to rejigged roles, responsibilities, progression and challenges. The entire ecosystem of the workplace has evolved from the traditional management-employee lens to a consultative and collaborative sphere, where employees are encouraged to be equal-partners contributing to accelerate growth of all stakeholders.

Amidst this ongoing sentiment and endeavour to attract and retain the best talent, what must be kept sight of is that onboarding and separation remain crucial stages of employee transition from one organisation to another. It is significant to ensure that same are done in a compliant way, keeping in mind interests of both employers and employees, as also requirements of law. Notably, Labour Codes lay down few provisions which are understood to have moderate to substantial bearing on how the two processes should be executed.

Industry has developed certain practices relating to onboarding and separation of employees, and has grown accustomed to these over a period of time. This piece attempts to bring to light such few existing trends and examines why it is important for organisations to revisit and evolve them the right way, in light of the mandates of the Labour Codes.

Facets of Employee Onboarding:
Offer letter and Appointment letter:

Companies have evolved different templates of Offer letters and Appointment letters, basis the skillset and roles of the employees being onboarded, as also the sector in which the companies are operating. There is no exhaustive format of appointment letter prescribed by law as of today, except few stipulations mandated to be included in the appointment letter by the Shops and Establishment Acts of some Indian States, viz., Delhi, Karnataka, Telangana, West Bengal and Kerala.

This is set to change after the Labour Codes come into force. The Occupational, Safety, Health and Working Conditions Code, 2020 mandates fifteen pieces of information to be included in the appointment letter to be issued by all establishments covered under the Code. Employers would be given three months’ time to comply with this requirement, once the Code comes into effect. It is necessary that employers take note of this and revisit their existing appointment letters, in line with such requirements, sooner than later.

Further, few employers seem to formulate offer letters far more comprehensively than their existing appointment letter template. In such cases, it would be prudent for employers to substitute such offer letter with an abridged version of offer letter, where most necessary details are projected in precise and minimalistic way, just to enable the candidate to take an informed decision. This would also make sense because the Codes do not mandate any format or information to be stated in an offer letter.

Pay-out of Advances:

It is a general practice amongst employers to make some monetary pay-outs to new hires to attract right talent, including joining bonus and relocation assistance. Generally, employers tie-in such pay-outs to a condition that the employee serves a minimum tenure in the organisation. In case of failure to adhere to such mandate by the employee, companies provide for recovery of such pay out, either in full or on pro-rata basis, at the time of the employee’s separation. Challenges usually surface at the desk of Human Resource team of companies, when such amount to be recovered exceed the quantum of full and final settlement, or what could be recovered from wages of employees.

It is crucial for companies to factor in such contingencies and pre-empt related bottlenecks. A possible solution lies in ensuring that appropriate contractual provisions are incorporated in the appointment letter issued to employees. This needs to be done as part of a carefully considered strategy to deal with such eventualities.

Facets of Employee Separation:
Full and Final Settlement:

At present, companies effect full and final settlement within a time frame ranging from the same day to a few weeks and, in rare cases, few months from the date of separation of the employee. This flexibility currently leveraged by employers is set to cease with the coming into force of the Labour Codes. The Wage Code, 2019 mandates that wages payable to the employee shall be paid to him within two working days of separation of employee, irrespective of the mode of separation. This is crucial to take note, in the sense that it strictly brackets the timeframe for effecting full and final settlement of employees, with non-adherence amounting to non-compliance with the law with consequent ramifications for the Company and its officials.

Consequently, companies would do well to ensure financial liquidity in cases of termination with cause and sudden off-the-guard resignations. As a step to ease out the aforesaid burden, it is necessary that companies revisit their separation and payroll policies, and further devise and incorporate fitting language in said policies, which may help them being in compliance with the Code.

Asset Recovery:

Most organisations have matured in offering complete work from home, as also hybrid models of work, with the objective to afford preferred flexibility to its existing and onboarded employee workforce. In fact, through a recent notification, the Commerce Ministry seeks to allow employees of companies set up in SEZs to work from home for a year at a time. [Read our Insights on this here].

Amidst this, several companies are finding it painful to recover assets from the employees at the time of separation, with repeated chasing of employees often ending up in either filing civil recovery suits or criminal complaints against the employee or writing off the expense as a bad debt.

It is important to take note here that the Wage Code, 2019 permits employers to make authorised deductions from wages of employees to the extent of fifty percent of wages in any wage period. However, recovery of full value of assets by way of authorised deductions from wages might not be legally permissible at all times, except in few cases (For instance, where the asset is given as a true ‘advance’).

Even in cases where it is possible to recover through such mode, it might be too late for HR team to realise that the full value of asset to be recovered from wages far exceeds the value of authorised deductions already made from last wage period of the employee. To add to this, the full and final settlement mandate stipulated in the Labour Codes do not factor in such contingencies and any delay to comply with the same, on the ground of failure of employer to recover assets from the employee, is most likely to be not considered as a mitigating factor for aforesaid non-compliance.

Here again, employers would require to cautiously think through such scenarios and make informed modifications to their asset recovery and separation policies, so as to ensure that the number of agonising cases of failure to recover assets, at least reduces to a minimum.

Way Forward:

The changing Labour law regime, with forthcoming implementation of Labour Codes, provides vital opportunity for companies to evolve their existing mechanisms around onboarding and separation of employee workforce. The only way to do this right is to revisit them, through informed decisions. The key here is ensure well curated employment contracts and policies, aligned with requirements of the Labour Codes, which would eventually facilitate employers to sustain a culture of compliance.

-Sunil Arya,
Advocate and Senior Principal Associate

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B. Chandrashekar Shetty - Advocate

Mr. Chandrashekar Shetty is a Senior Labour Law Compliance Auditor at BCP Associates and has audited multiple client companies across India. He is also a member of our senior legal advisory practice. Previously he has worked as Deputy Controller, Manager-Industrial Relations and Industrial Relations Officer in KPTCL, Bangalore for more than 30 years. Prior to this, he has dealt with Legal, Personnel and IR matters including Wage Settlements, Grievance Machinery, Manpower Study and Social Security Compliances for about 10 years. He is a Faculty member of Labour Law, HRD Centre, KPTCL Bangalore.

Mr. Shetty holds a B.Com. and L.L.B. degree, Post-Graduate Diploma in Business Administration, Diploma in Public Relations from Bangalore University and PG Diploma in Industrial Relations & Personnel Management from Bharatiya Vidya Bhawan. He is enrolled as Advocate in Karnataka Bar Council and is a Govt. Arbitrator of Chit Funds in Karnataka.

S Venugopal Rao

S Venugopal Rao is an experienced labour law and service matters expert and is a member of the senior advisory team at BCP Associates. Having joined the chambers of Mr. B C Prabhakar in 2012, he is knowledgeable and well versed in multiple employment and labour law topics.

S Venugopal Rao holds a Bachelor’s degree in Science from Karnataka University, Dharwar and Bachelor of Law from Bangalore University. He enrolled as advocate in Karantaka State Bar Council in 1976. He joined the chamber of Sri. Kolachalam Srinivasa Rao a leading civil advocate. After practicing for 6 years at Ballari, he joined Orient Paper Mills, Orissa (of G P Birla Group). He was designated as Manager (Law) under the Factories Act in 1995. In 1999, he joined Andhra Pradesh Paper Mills Rajahmundry as Manager Legal and was subsequently elevated as Dy. General Manager (Legal). As Factory Manager & Legal Head, he oversaw compliance of Factories Act and Rules there under towards safety, health and welfare, including compliance under Pollutions and Environmental laws and Explosives Act, etc. Additionally, he is well acquainted with Environment Management System ISO 14001: 2004, Occupations, Health and Safety Series 18000:1999. As Legal head in APPM he has briefed and appeared along with Senior Advocate before Appellate Authority constituted under Water (Prevention & Control of Pollution) Act. He retired from the services of Andhra Pradesh Paper Mills in 2011.

As legal head he has handled important cases both in Labour and Civil and has experience in drafting and vetting Contracts, Agreements, Lease Agreement, Conveyance Deeds, , Affidavits and scrutiny of several legal and other documents, Preparing and settling Petitions, Appeals, Plaints, Written Statements, Rejoinders, Affidavits and Written Arguments etc. for submission/pleadings for various legal proceedings.

C K Devappa Gowda - Advocate

C.K. Devappa Gowda (CKD) is an Advocate and Labour Law expert. He holds a Bachelor’s Degree in Science from the University of Mysore and a Degree in Bachelor of Law from Bengaluru respectively. He also holds a Diploma in Social Service Administration from the National Institute of Social Science, Bengaluru. After completing his studies, he had enrolled as a Advocate and initially practiced in the Civil Code attached to the office of BCP. He then worked as Personnel Officer in Chemicals and Textile Manufacturing Industries for 5 years. Thereafter took up employment in one of the largest Public Sector Bank. He has worked in different parts of the country and has extensive experience in the cross country IR domain. The significant part of his service was at corporate level overseeing and implementing HR policies and practices and management of IR. He has been a member of personnel committee of Indian Bank Association.

After retirement from service, Mr. Gowda has been working with Mr. BC Prabhakar’s firm for the last 12 years. He has expertise in all areas of people management, drafting of documents relating to service matter including the settlements under the ID Act. He has dealt with all employment laws including appearance before the Courts, Tribunal and Authorities under the different Labour Laws. Mr. Gowda is one of the senior Labour Law experts at BCP Associates.

Srijatha Ghosh - POSH Specialist & Advocate

Srijata Ghosh serves as external member on the Internal Committee of several Companies across various sectors. She handles all kinds of POSH related matters including investigations and inquiries. She provides Training on Sexual Harassment across all verticals for Managers and Senior Management, General Awareness for all employees and Internal Committee members on the legislation (The Sexual Harassment of Women at Workplace Prevention, Prohibition and Redressal Act, 2013). She also formulates Policies for Prevention of Sexual Harassment at Workplace (“POSH”) and advises Companies on setting up of their Internal Committees. Srijata is involved in providing Legal Advisory services on POSH and other labour law matters for various clients.

In her previous experience, she has extensively dealt with End-to-End Contract Management, Due Diligence, POSH Compliances, Legal Advisory, etc. Srijata worked with Companies like Accenture India Private Limited, Quess Corp., Capgemini Business Services (India) Limited and Pramata Knowledge Solutions Private Limited. Srijata has handled varied legal issues including drafting, vetting and negotiation of contracts, drafting policies of various organizations. She has resolved issues relating to employment laws and has worked closely with the HR teams. She has provided legal advisory services to senior management. She was also associated with Kolkata High Court in counselling clients with legal matters such as Property, Due Diligence etc. Srijata has worked in an LPO Service Firm, Manthan Legal Services Private Limited for Legal Research, depositions, medical summaries, demand drafting etc.

Srijata completed her B.A.LL.B from M. S. Ramaiah College of Law, Bangalore University in 2009. Srijata is a member of the Karnataka Bar Council since 2010. She is also a member of the Gender Sensitivity Sub Committee of Karnataka Employer Association (KEA).

Caroline Lobo - POSH Specialist & Advocate

Caroline Lobo has been with BCP Associates for the past 2+ years. She has been handling matters and Inquiries related to the POSH Act including conducting inquiries and trainings/awareness programmes for Senior Management, employees as well as members of the Internal Committee on the POSH Legislation (The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“Act”) to address Workplace Harassment of Women. She is a member of the Internal Committee for many varied companies and organisations and has reviewed and scrutinized numerous hearings and inquiries on matters relating to sexual harassment at workplace.

She has also handled matters relating to employer-employee related Enquiries, wherein she has reviewed and conducted hearings and enquired into the matters and has guided the Internal Committee and provided guidance in providing recommendations to the management. She is also a Member of the Gender Sensitivity Sub-committee of Karnataka Employer Association (KEA).

Prior to joining BCP Associates, Caroline has has a wide range of experience in corporate, commercial and contract law, mergers and acquisition and has undertaken drafting, vetting, negotiating and finalizing legal and commercial transactions. She started her career in litigation then moved onto the Corporate sector. In the span of 13 years, she has worked at Chambers of Advocate Jayashree Murali, Krishnamurthy and Co. Legal Consultants, Colt Technology Services and Oracle India Pvt. Ltd. She always had a keen interest in Women and Child related issues. She has worked with Child Welfare Committee and NGOS’s. In addition, she has worked with Swasthi Health Resource and Centre, where she was the External member to the Internal Committee (IC). She worked closely with the committee in strategizing, planning, reviewing and implementing the assigned tasks, which included building material to raise awareness against sexual harassment at workplace. Further, she has been involved in conducting inquiries into matters related to sexual harassment at workplace.

Caroline earned her Law degree from University Law College, Bangalore, from where she graduated in the year 2005.

Manoj Kumar – Senior Associate

At BCP Associates, Manoj Kumar is involved in managing and conducting labour law compliance audits of principal employer and contractors. He is also involved in client co-ordination and conducting labour law training programs for vendors. He has conducted on-ground labour law audit for factories. Manoj also provides support in advising vendor clients on labour law queries. He completed B.A., LL.B. from BMS College of Law, Bangalore in 2016

Rashmitha Venkatachalam Das - POSH Specialist & Advocate

Rashmitha Venkatachalam Das is the External Member of the Internal Committee of several reputed Organizations across various sectors. Handling complex inquiries has been her forte and she is extremely passionate about it. She is actively involved in providing Training on Sexual Harassment (Prevention, Prohibition and Redressal) Act, 2013 across all verticals for Managers and Senior Management, General Awareness for all employees and Internal Committee members. Rashmitha possesses capabilities in delivering sessions in Hindi and Kannada, in addition to English. She has formulated Policies for Prevention of Sexual Harassment at Workplace (“POSH”), advised companies on setting up of their Committee. Rashmitha is involved in providing Legal Advisory services on POSH for various clients spread across diverse sectors. She has also been handling domestic enquiries for various clients. 

Rashmitha possesses experience both at Law Firms and Corporates in various capacities. She started her career at Krishnamurthy and Co, Legal Consultants and then moved on to work as an In- House Legal Counsel with Companies such as Biocon Limited, Columbia Asia Hospitals Private Limited, Adecco India Private Limited. With a long stint in the Corporate side, Rashmitha decided to pursue further education in Law with a specialization in Labour and Employment Laws. She has rich experience in drafting, vetting and negotiation of various types of contracts, providing legal opinions and has driven the team in formulating process and procedures and their implementation. She has drafted several employment related policies in Corporates. Rashmitha has been a part of various key committees in Organizations and assisted committees in scrutiny of documents pertaining to human organ transplant as well as clinical trials.

Rashmitha holds an LL.M. in Labour and Employment Laws from University Law College, Bangalore, which she completed in the year 2018 with Two Gold Medals. She is also a Rank Holder at the University. She has completed BA, LL.B. from Bangalore Institute of Legal Studies, Bangalore University in the year 2009. Rashmitha is a member of the Karnataka Bar Council since 2009 and also a member of the Gender Sensitivity Sub Committee of Karnataka Employer Association (KEA).

Manisha Vidyadhar – Senior Associate

At BCP Associates, Manisha Vidyadhar is involved in managing and conducting labour law compliance audits of principal employer and contractors. She is also involved in client co-ordination and conducting labour law training programs for vendors. She has conducted on-ground labour law audit for factories. Manisha also provides support in advising vendor clients on labour law queries.  She completed B.A., LL.B. from BMS College of Law, Bangalore in 2016.

Amrutha Ananth – Principal Associate

At BCP Associates, Amrutha is a part of the Legal Advisory practice, Legal Audit practice and Labour Code Alignment Programme (LCAP). Amrutha specialises in Labour and Employment Laws and compliance having advised some of India’s leading companies for some of their most complex labour law matters.

Amrutha has more than seven years of experience in labour and employment law and has conducted several audits for both, principal employer and contractor for various leading IT/ITES companies, manufacturing sectors like pharma, automobile, construction and start-ups.

She is actively involved in drafting and reviewing employment contracts, HR policies, Employee Handbook, show cause notice, etc. for various organizations spread across diverse sectors. As a part of the Labour Code Alignment Program, she assists companies in review and alignment of their existing wage and employment policy with the provisions of the Labour Codes.

Sunil Arya – Principle Associate

At BCP Associates, Sunil Arya is part of the labour and employment law advisory and HR Policy practice and is actively involved in drafting and reviewing of employment contracts, opinions, HR policies, employee handbook, show cause notice, etc. for various clients spread across diverse sectors. He conducts training on labour and employment laws. Sunil is also involved in labour law compliance audits of principal employer and contractors and has conducted on-ground labour law audit for factories. In addition, he is engaged in knowledge creation and management of the firm and keenly writes on developments in labour and employment laws.

Prior to joining BCP Associates, Sunil has 10 years of post-qualification experience in diversified portfolios of advisory, drafting, policy analysis and dispute in the domains of contracts, general civil matters, employment law, competition law and construction arbitration matters. Sunil started his career as a Law Researcher in Delhi High Court. He moved on to be part of regulatory analysis team of CIRC, a unit of CUTS International. In addition, Sunil has been part of legal team of Jindal India Thermal Power Limited. He has also taught competition law, tax law and investment law at VIPS, Delhi.

Sunil holds LL.M. from The Indian Law Institute, Delhi. He is First Rank Holder in his thesis. He completed B.A, L.L.B. (Hons.) from I.P. University, Delhi. He also holds First Rank in P.G. Diploma in Competition Policy and Laws from The National Law University, Delhi.

Chandrakala K A – Principle Associate

At BCP Associates, Chandrakala has 12+ years of experience in conducting and managing labour law compliance audits of principal employer and contractors. She is also involved in co-ordination with many clients. She has conducted on-ground labour law audit for factories. She also provides support in advising vendors on labour law queries. Chandrakala is actively involved in research and providing valuable inputs to the firm pertaining to updation in labour law audit function.

Chandrakala started her career in litigation in chamber of Sri. Ashok where she was involved in drafting, pleading and appearance before Karnataka High Courts and lower courts on the criminal side.

Chandrakala completed B.A in Arts from Kuvempu University, Shimoga in 2003 and LL.B. from Mangalore University in 2006.

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