Rights of a Private Employee

Rights of a Private Employee

A happy and healthy work environment is a right of all and awareness about them is the first step. Like the Government employees, even the private sector employees have certain rights as enshrined in various statutes provided to the employees working in Private Sector. If the concerned employee doesn’t get such rights, the employees has a right to get those rights in order.

Every employee should be aware that he/she is legally and constitutionally safeguarded against certain things and a healthy work environment is their right At the same time employer is legally and constitutionally bound to take care of these things when hiring people.

Employment Agreement

Every employee working in private sector has a right to receive an employment agreement when they join a company/ institution/organisation. This document shall state the designation, working hours, expectations that the employer has from its employee, what qualifies for a dispute or conflict, what might happen when dispute arise, and the various leaves an employee is entitled to.

The purpose of the agreement is simple, it brings the terms of employment of employer and the employee clear before work commences and in writing to have a clarity during entire tenure of the work.

It is the paramount right of the employee to know what one is exactly getting, before they commit to the job. It is in the betterment of both the sides to Secure an employment agreement and making sure it is not one-sided.

Basic rights

Rights relating to health and safety at the workplace are the basic rights of an employee under the Factories Act, it is pertinent to say that no matter, where they work and at what post do they work, they are entitled to a set of basic rights.

It is the primary responsibility of the employer to ensure these the basic amenities for the employees are provided at the work place. If the workplaces are hazardous like construction or mining sites, proper safety equipment are to be provided. When there are woman employees, extra facilities for them are also has to be provided by the employer.

If the employer fails provide a safe and healthy working environment and the employee(s) suffer pain because of the same, the employer has to pay a compensation as provided under The Employees Compensation Act.

The basic rights of the employees relate to cleanliness, drinking water, disposal of waste, washrooms (Separate for woman employees), ventilation, and lightning.  

Rights during probation

This is the most dangerous, cautious period for a new employee since the same is regulated by the employer. Although the basic rights are to be provided by the employer to the employee during this period, still the employee has to put his maximum effort during this period to secure permanency. While an employee is on probation, the employer has the right to terminate their services on the grounds of unsatisfactory work or unsuitability for the profile with a prior notice.

Although the employee can also ask for an inquiry if the reason for termination is other than unsatisfactory work but it is not of much help.

The period of probation varies from place to place and job profile. In normal circumstances, the probationary period is about 6 months. It can be extended to 3 more months. However, the maximum period cannot be more than 2 years.

Minimum wage: A right

Under the Minimum Wages Act, each employee in India is guaranteed to get minimum wage which allows the person to sustain their lifestyle and avail the necessary amenities. Hon’ble Supreme Court and the High Courts have been repeatedly pressuring the Government and other private organisations to give their employees, the Minimum wages. The moto of providing the Minimum Wages is to give basic respectable life to the last employee.

Any wage below the minimum wage is a violation of Article 23 of the Constitution. If any person is forced to work under the minimum wage, it is termed as forced labor which is not permissible under the same Article and the Minimum Wages Acr, 1948.

Both the central and state government fixes the minimum wage according to the following factors:

Ø Region

Ø Cost of living

Ø Type of work

Ø Working hours

Ø Employer’s capacity of payment

The Minimum Wages of employees get increasing by the Government as per the need of time considering various factors as stated above.

Timely salary: A right

Equal pay for equal work is  principle enunciated by this courts in India in the benefit of the employees. Both men and women have to be paid equally.  

This right is guaranteed under The Act of Equal Remuneration, 1976, whereby equal wages are paid to employees irrespective of their physical strength.

The Payment of Wages Act stipulates that an employee has to be paid his remuneration in a timely manner. If this doesn’t happen, the employee can approach the Labour Commissioner or file a civil suit. For employees whose salaries are above Rs. 18,000, civil action can be taken against the employer.

Working hours and overtime and payment of Overtime

Under the Minimum Wages Act, 1948, if an employee/ worker/ lobour works for more than the normal working hours, the employer shall pay the employee for every hour or part of the hour for which he/ she worked “overtime”. The overtime rate will be as fixed according to the Act or any other prescribed law, whichever is higher.

Each employee is entitled to minimum one day of holiday every week. The organization will pay remuneration for the holiday. If an employee works on holiday, payment will be made at a rate not less than the overtime rate. If, on the other hand, an employee works less than the normal working hours, he/she will be paid as if he/she had worked a full normal working day. The payment will not be applicable if He/ she does not work out of an unwillingness to work and not because the employer hasn’t assigned any work.

Leaves: A right

Leaves of employee is decided as policy for each company and the same has to be framed according to the legislation and rules of the concerned State Government or the Union Government, as the case may be.

Each state provides minimum 7 holidays. It is mandatory to grant leave to employees on the 3 national holidays of the country- Republic Day (Jan 26), Independence Day (Aug 15), and Gandhi Jayanti (Oct 2). The rest of the national and festival holidays are at the discretion of the company.

There are a variety of other leaves that an employee is entitled to:

Casual leave- These leaves are kept aside for unforeseen circumstances when an employee might have to attend some urgent matters at hand. Normally, a company grants up to 3 days of casual leaves per month. If there are no sick leaves, then the casual leaves can be taken for medical purpose.

Privilege leaves/ earned leaves- These leaves are carried over from the previous year and are enjoyed by the employee in the current or following years. Privilege leaves can be carried forward for upto three years. These can also be taken in lieu of sick leaves if an employee doesn’t have any sick leaves in balance. If an employee has outstanding earned leaves at the time of leaving a job, then these leaves can be encashed.

Compensatory leave- These leaves can be taken by the employee if he/ she comes to work during official off days.

Leave without pay- If an employee does not have any leftover leaves in his account, then he/ she may take a leave but his wages for that day will be deducted from the monthly salary. The company may, however, decide to grant a paid leave to the employee on the discretion of the management.

Bonus: A right

According to The Payment of Bonus Act, 1965, any factory or organization which is at least 5 years old and employee strength of 20 or more employees in any accounting year, is legally bound to pay a bonus to its employees. The bonus will be paid even if the number of employees falls below 20 eventually.

Any employee whose salary is Rs. 21,000/- or less per month, and who has worked for more than 30 days in any accounting year is eligible for a bonus.

Now, there are 2 ways in which an employee can gain a bonus:

  • The company made a profit that year
  • The employee is in agreement with the employer to be paid a bonus on the basis of his/her productivity.

The bonus has to be paid within 8 months of completion of an accounting year.

Any employee who has been dismissed from service because of Fraud, Violent behavior, Stealing or sabotage of company property will not be entitled to receive the bonus under this Act.


Provident fund: A Right

The provident fund is a retirement and long-term savings scheme. The Employees Provident Fund Organization of India (EPFO) manages Provident Fund for all employees receiving salary in India. Any organization with more than 20 employees has to register with the EPFO. Both the employees and the employer contribute equally- i.e. 12% of their salary- to the EPF.

Complete or partial withdrawals can be made in case of House construction, Medicare, Home loan repayment, Home renovation, Marriage of children, Education expenses, Retirement, Immigration abroad, studies of children. However, there is only a specific amount that can be withdrawn and that is subject to the number of years that the service is rendered. One can only opt out of the scheme at the start of your career. Once one deposits money in the PF, there is no option of backing out. When it comes to withdrawal, money from the PF cannot be withdrawn during employment. It may be withdrawn only after retirement. If withdrawals are made before completion of 5 years of service, the withdrawn amount will be taxed.

However, in the case of unemployment before retirement, the EPF account holder can withdraw funds. In this case, 75% of the PF can be withdrawn after 1 month of unemployment while the remaining 25% can be claimed after 2 months of unemployment. Or, if the person manages to get another job, the remaining 25% can be transferred to the new EPF account.


Gratuity: A right

Gratuity is governed by The Payment of Gratuity Act, 1972. As the name suggest, it is the employer’s way of thanking his/ her employee for the service rendered by them. It is a lump sum given by the employer to the employee in case of any of the following:

a.    Retirement

  1. Resignation
  2. Inability to carry on work due to disability
  3. Death (gratuity is paid to the employee’s nominees)
  4. Superannuation

The employee in no way contributes to the gratuity amount.  The amount of gratuity paid depends on the number of years that the employee has served in the company. The minimum number for the same is 5. It is paid as 15 days of salary for every year of the employee’s service and is calculated as follows:

Gratuity= Last month salary x 15 working days x No. of years of service

   26 working days

According to the  amendment of 2018 in the Gratuity Act, the amount of gratuity should not exceed Rs. 20,00,000/-.

Gratuity is forfeited in case of misconduct on the employee’s part and his/ her resulting termination. The employee’s misconduct should have been intentional and should have caused financial damage to the employer. Even then, the gratuity shall be forfeited to the extent of the damage caused.

Parental leaves: A right

The Maternity Benefit Act, 1961, deals with maternity pay for women in India. A pregnant females cannot be dismissed from service on the grounds of their pregnancy. If dismissed, they can still claim maternity benefits. No employer shall employ a woman during the six weeks immediately following her pregnancy or miscarriage. No woman herself shall work anywhere during the six weeks immediately following her pregnancy/ miscarriage.

The duration of maternity leave is now 26 weeks. Out of these, a maximum of 8 weeks can be taken for pre-natal leave. Surrogate, adoptive, and commissioning mothers can also get maternity leave, though, the duration would vary. Child care leave and paid paternal leave are at the discretion of the employer in the private sector although government employees are entitled to the same. It might be paid or it might be unpaid.


Protection from sexual harassment

Although this right was provided earlier also under different statutes such as IPC but as a right it appeared for the first time in 2013 and this protection came as guarantee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013. Under the Indian Penal Code an accused of sexual harassment can be with up to three years of imprisonment, with or without a fine.

The Act of2013 stipulates that if an organization has 10 or more employees, an Internal Complaints Committee has to be formed which will address cases of sexual harassment. This committee is mandatory to be made at all branches and units of an organization. This committee shall include:

Ø A woman who is employed at the senior level and will be the Presiding Officer.

Ø Not more than 2 other employees who are committed to the cause of women safety or who have appropriate legal and/or social knowledge

Ø A person belonging to a non-governmental organization (NGO) committed to the cause of women or is familiar with issues related to sexual harassment

The offenses as given in ‘Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013’ would include:

Ø Physical contact and advances.

Ø A demand or request for sexual favors.

Ø Making sexually colored remarks.

Ø Showing pornography.

Ø Any other unwelcome physical, verbal, or non-verbal conduct of sexual nature.

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