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Employment law governs relationships between employers and employees. It covers hiring practices, employment contracts, workplace policies, compensation, working conditions, discrimination, harassment, and termination. Employment law applies to all employers regardless of size, though specific provisions have different applicability thresholds. Compliance requires understanding multiple statutes—Industrial Disputes Act, Employees Provident Fund Act, Employees State Insurance Act, Payment of Gratuity Act, Contract Labour Act, Sexual Harassment Act, and various state-specific labour laws. Non-compliance creates statutory penalties and employee disputes.

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Employment contracts establish terms of employment relationship. Clear contracts specify role, compensation, working hours, leave entitlements, termination notice periods, confidentiality obligations, and post-employment restrictions. Many employers use casual offer letters or verbal agreements without comprehensive written contracts. This creates ambiguity when disputes arise about employment terms. Proper employment contracts protect both employer and employee by establishing clear expectations and obligations. Contracts should comply with minimum statutory requirements while allowing flexibility for business needs.

Workplace policies provide framework for employee conduct and employer practices. Policies should address leave, attendance, performance evaluation, discipline, grievance redressal, and code of conduct. Clear policies create consistency in employer actions and provide reference for handling employee issues. Policies must comply with applicable employment laws while addressing business requirements. Some employers operate without formal policies, making ad hoc decisions creating inconsistency and discrimination claims. Well-drafted policies implemented fairly protect employers from many employment disputes.

Employee termination requires compliance with notice requirements, procedural fairness, and statutory protections against unfair dismissal. Termination without cause requires notice payment. Termination for cause requires proper investigation and opportunity for employee explanation. Termination of certain employee categories requires government permission. Improper termination creates wrongful dismissal claims, reinstatement orders, and back wages liability. Termination should follow documented process demonstrating legitimate business reasons and procedural fairness. Prevention of termination disputes requires proper documentation of performance issues and disciplinary actions before termination.

Sexual harassment prevention is mandatory for all workplaces. Sexual Harassment Act requires Internal Complaints Committee, complaint procedures, and prescribed processes for handling harassment allegations. Employers must prevent harassment through policies, awareness, and swift action against violations. Failure to comply creates statutory penalties and civil liability. Harassment complaints require sensitive handling balancing accuser protection with accused rights to fair process. Many employers lack proper harassment prevention mechanisms until complaints arise. Compliance requires establishing committees, training employees, and implementing complaint procedures before issues occur.

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Employment disputes involve wrongful termination claims, discrimination allegations, wage disputes, harassment complaints, and industrial disputes. Disputes can proceed through labour courts, civil courts, or specialized tribunals depending on dispute nature. Some employment disputes resolve through settlement. Others require litigation through full adjudication. Employment dispute strategy depends on dispute merits, employee value, precedent concerns, and business impact. Fighting every dispute establishes reputation for protecting positions but creates legal costs. Settling disputes quickly prevents escalation but might encourage frivolous claims. Balance requires case-by-case assessment.

Compliance with labour laws requires understanding applicability thresholds and filing requirements. Different laws apply based on employee count, establishment type, and business nature. Provident Fund, ESI, gratuity, bonus, and other benefits have specific applicability criteria and compliance requirements. Many businesses lack complete compliance until inspections reveal gaps. Compliance is not one-time exercise but ongoing obligation requiring regular attention. Employers need systems for tracking compliance obligations, meeting filing deadlines, and maintaining required records. Non-compliance creates penalties and potential operational disruption through closure orders.

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