What do Indian HR managers need to learn about labour law?

I just spent 3 days straight in a room with 12 HR managers who work in different factories all over India, as a part of an internal training program conducted by the biggest tobacco manufacturer in India, ITC. It was called brass tacks, and the mandate was to teach some quite complex things like statutory interpretation and how to read case law.

It was an amazing learning experience for me! Spending time from 9 in the morning to 6 in the evening every day with HR managers gave me the opportunity to learn about their challenges, dreams, nightmares, and relationship with law.

For instance, I discovered that XLRI has a very extensive labour law course. Most MBA or HR courses teach labour law in a very inadequate way. But based on my interaction with people who graduated from XLRI, there was a lot of emphasis on labour laws in their course.

A very senior manager from the organization told me that they had given feedback to XLRI and a few more campuses from which they hire HR managers that better training of technical aspects of labour law was needed. And since then, many B schools have a lot of focus on labour law.

There are many other aspects of the job of an HR manager apart from labour and employment law, such as recruitment, organizational development and restructuring, performance tracking and culture building. These are critical aspects of any organization.

However, labour and employment laws inform each of those tasks. One has to operate within the legal framework, and having the requisite knowledge of law is a hugely empowering factor. One who knows law will confidently come up with out-of-the-box ideas and would know the legal implications, and therefore can move faster, while the others would be slowed down and be at the mercy of lawyers at every step. 

So what are the law related skills that a HR manager should develop? Here are the ones we think are most important.

Understand the legal system and hierarchy of authorities

India has a well structured legal system. It is critical to understand the role of constitution, parliament, state assemblies, Supreme Court, High Courts, civil courts, criminal courts, labour courts and industrial tribunals. You need to understand which offences are of a criminal nature and which are just civil breaches. You need to understand the role of executive and about delegated legislations. You need to know who are labour inspectors, commissioners, and what are their powers under various statutes. You need to understand how amendments work, and where to find notifications.

Did you know that labour is in concurrent list in the 7th schedule of the Constitution of India, which means both the state government and central government can make laws about labour and employment related issues. In that case, what if there are two laws on the same subject? Which law will prevail and why?

You even need to understand how to interpret complex legal text, and how to read up case law to find out what is not written in the statute!

There is a lot more to learn. You need to have a basic understanding of how the government and thereafter how labour law and related government departments work.

You need to know how to draft and negotiate policies and contracts

HR managers draft policies that impact entire organizations. Some examples: conflict of interest policy, sexual harassment policy, whistleblower policy. They do not only draft and get such policies implemented, they also need to make the rest of the organization aware and aligned about the same.

Policies are still once in a while affair, what is even more common is drafting and negotiating employment agreements, standing orders, secondment agreements, contract labour supply agreements, consultancy agreements, vendor agreements of various types. 

It is not always cost effective or possible to go to a lawyer for every contract, and the organization will appreciate if you had the requisite drafting and negotiation skills. Also, it is not so hard to develop these. A few weeks of concentrated effort could make you really good at this.

Drafting dismissal letters, official warning, strictures and other formal communications with legal implications

This is a critical skill as you become more senior as an HR manager, since the job of firing people with or without cause will fall on you. You need to learn to prepare good documentation so that those who are getting fired do not get any room to bring false accusations or claims against you or your organization. 

This requires very careful drafting. For example, if the rules require that you have to conduct a hearing before firing someone, and you write in a warning letter that you would be fired without further notice if you break discipline again, this may lead to grave problems later as you are not telling this person about his right to be heard. You could instead say that we would have to institute appropriate proceedings against you or take appropriate actions against you, and that would have been legally kosher. 

Your drafting can show your intelligence or the lack thereof. And the well prepared always appear more intelligent. What if you systematically learnt this kind of drafting?

Reply to show cause notices and communication with regulators

Another place where HR managers or labour officers may have to draft formal communication is reply to show cause notices. Sometimes, there may be innocuous notices or request for information as well. However, if you handle them wrong, your organization may get into big trouble.

This is why organizations invest in teaching their labour officers or HR managers about such work, and that is where our courses like this one comes in.

How to brief and assist lawyers acting for your organization

This is another very major skill. I strongly believe that those who are in the line of business can come up with better arguments and ideas about their own case than any lawyer can. Lawyers are more effective when they get good guidance and high quality inputs from sophisticated clients.

That is why the HR manager is so important in labour and employment litigation. The HR manager has seen the birth of the issue, and seen it snowball towards a litigation. She or he knows exactly what led to various levels of escalations, and own the facts better than anyone else. 

I have seen HR managers really turning around cases that were otherwise going to be lost. Simply by sharing appropriate facts, documents and ideas they can rescue cases that are almost lost.

How would you organization value you if you could do this in the course of your work?

How to conduct hearings for misconduct, disciplinary issues, loss of confidence or sexual harassment

HR managers are also responsible for conducting various kinds of hearings and disciplinary proceedings. Some of these are statutory, such as sexual harassment proceedings against any employee. Others are stipulated by internal guidelines. However, it is very important to conduct these within the boundaries of law. For instance, following the principles of natural justice would be of paramount importance.

You need to also maintain proper documentation at every stage, because such matters often lead to litigation. Wrongful proceedings can lead to court cases, and hefty compensation payouts. Courts can reinstate a fired employee with back wages, in which case the organization may have to cough up a few lakhs or even crores, without having received any service! 

Often while a court case is pending, the court may order organization to pay a subsistence allowance to the complainant, because employee is able to establish a prima facie case of negligence, bad faith or rash actions on the part of the employer. If you were the HR manager who handled that proceedings, imagine the ignominy that can follow!

Where can you learn these things?

Did you know that there is a course for that? We have trained hundreds of HR managers, labour officers and government officials on labour laws. Check out this labour law course here. We teach each of the above skills and a lot more.