Changes In Appointment Letter As Per New Labour Codes
The four new labour codes aim to standardise terminology, streamline processes, and provide a greater level of worker safety. The updated laws, which are waiting for their effective notice date, will replace and combine the current 29 core labour laws.
The Occupational Security, Health and Working Conditions Code, 2020 (the "OSH Code") and Guidelines, one of several codes, has established specific regulations for the issue of appointment letters and has established formats for a comparable document (part 6 of the OSH Code learn with Rule 7 of the OSH Guidelines). The 13 current guidelines do not need any special clauses regarding the issuing or format of appointment letters.
Appointment letter: A legal contract
An official contract between the employer and the employee is the appointment letter. It is a document that the employer issues certifying the employee's position inside the company as well as the terms and conditions of employment.
As previously stated, an employer is required under the OSH Code to issue each employee a letter of appointment in a format that may be established by the appropriate regulations immediately upon the employee's employment with the organisation.
According to the OSH Code, if a worker has not received such an appointment letter on or before the graduation of the Code, the employer must give one within three months of the Code's graduation. Contrast that with the current scenario, in which no format is mandated.
Therefore, even if an employee has previously received an appointment letter before the new regulations take effect, a fresh appointment letter must be given out within three months of the new regulations taking effect date. The new appointment letter must follow the format requirements outlined in the Code.
Aadhaar Number, Labour Identification Number (LIN), Universal Account Number (UAN), and avenues for obtaining greater wages/higher positions (basis for increments, promotions, etc.), which are now not mentioned within the appointment letter, will now need to be included.
In addition to the aforementioned, the appointment letter and its sections pertaining to social security, gratuities, etc. will need to be examined in order to realign and reflect the modifications necessary under the other labour codes aside from OSH. Additionally, adjustments will be required to clarify the special advantages offered to women employees and fixed-term employees, as necessary.
This is a positive move since it will increase openness and standardise the information that should be included in appointment letters.
To further guarantee that all applicable rules are followed, the employer shall additionally make reference to the OSH Code and Rules informed by the relevant states as well as any other state legislation, such as the Shop and Establishment Act, while issuing an appointment letter.
Additionally, one should be aware that the employer may face harsh fines, ranging from Rs 2 lakh to Rs 3 lakh if the OSH Code and Rules are not followed. For every day that a violation persists, there will be extra fines of Rs 2,000 if compliance is not maintained.
Therefore, it is essential for employers to keep an eye out for notifications of the Labor Codes' effective dates, recognise and comprehend the changes mandated by them, be prepared to assure compliance, and tell their staff.
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