Guide to Restructuring a Cross-Border Workforce

Yes, there is. An employee is redundant if the following conditions are met:

• the employer adopted a decision on organisational change;
• the change concerns the scope of activities, tasks, technical equipment, number of employees, or otherwise alters the structure of the employer;
• the aim of the change is to increase work efficiency, reduce costs, or otherwise alter the performance of the employer’s enterprise; and
• as a result, the employee’s work is redundant or not needed.

According to case law, the employee’s work is not needed, either at all or at least in part, with the rest being distributed among the current employees or corporate body. Rebranding the position, hiring a new employee to carry out the work of the dismissed employee shortly thereafter, or otherwise fabricating the redundancy with an ulterior motive does not qualify as redundancy.

Czech law provides two other similar reasons based on which an employer is entitled to terminate employment – closing down or relocation of the employer’s undertaking or its part. Together with redundancy, these three reasons are known as “organisational reasons” (in Czech: “organizační důvody”) for termination of employment. However, closing down and relocation of the employer or its part are different reasons than the redundancy itself, and therefore we do not address them further.

Under Indian law, termination of employment needs to be for a “reasonable cause” and redundancy is typically recognised as a reasonable cause.

There is no statutory definition of redundancy. Judicial precedents have recognised it to mean a situation where there is a surplus of labour or employees due to various factors, such as a shortage of work, as a result of which an employee’s role becomes redundant or is eliminated.

The employer must take the following steps:

• review underlying documents (including organisational charts), decide what organisational change needs to be made and work out which positions are no longer needed, and plan the timing;
• adopt a decision on organisational change, including its effective date and which redundant positions are cancelled. The decision doesn’t have to be in writing or state reasons for the redundancy. However, both are highly recommended and a market standard, as this serves as evidence;
• if there are unions, consult the unions in advance (see question 4), and if a union representative is supposed to be made redundant, obtain the union’s consent in advance (see question 11);
• execute dismissal either by a termination agreement (recommended) or a termination notice with the redundant employees. In case of termination notice, the redundancy must (based on the decision) take effect on or before the notice period expired, not after; and
• implement the organisational change (including updating organisational charts).

Organisational changes may also be governed by collective agreements, in which case additional rules may apply (this applies to all the questions below).

The process depends on the category of employees (ie, workman or non-workman); the kind of establishment (commercial establishment or factory); and the number of workmen category of employees.

“Workman” would generally include all employees, except those employed in a supervisory (only if their salary is at least INR 10,000 per month or more) or managerial capacity, though there is no straitjacket formula to determine whether an employee would be considered a workman or not. This would require a case-by-case analysis based on an individual’s primary job roles and duties.

The termination of workmen due to, inter alia, redundancy is regulated under the Industrial Disputes Act, 1947 (IDA), the process for which is set out below:

• Provide notice, or pay in lieu thereof, to workmen who have completed 240 days of employment:
  • all establishments with less than 100[1] workmen in the preceding 12 months must provide one month’s notice, or payment in lieu thereof, to the covered workmen; and
  • industrial establishments (factories, mines, and plantations) with 100 or more workmen in the preceding 12 months must provide three months’ notice, or pay in lieu thereof.
• pay retrenchment compensation (a severance payment) to workmen who have completed 240 days of employment – calculated as 15 days’ pay for every year of service.
• obtain consent from government authorities:
  • all establishments with 50 or more workmen in the preceding 12 months – inform the appropriate government of the termination within a specified duration, in a prescribed format; and
  • industrial establishments with more than 100[2] workmen in the preceding 12 months – obtain consent from the appropriate government before termination of employment. A copy of the approval application would also need to be simultaneously served to the impacted workmen. Approval is deemed to be granted if this is not granted or rejected within 60 days from the date of application.  

Termination of non-workmen in commercial establishments is regulated under the local shops and establishment legislation (LSE Acts) read with their employment agreements. LSE Acts mostly require employers to provide one month’s notice, or pay in lieu thereof. Some states also require a reason for the termination. LSE Acts cover both workmen and non-workmen. Therefore, it would apply to workmen who are not covered under the IDA on account of not completing 240 days of employment.

If the terms of employment provide for longer notice, higher severance pay or better terms, then this would have to be followed.

Yes, Czech law provides a special procedure for “collective dismissal” in all three cases of organisational changes (see question 1).

The threshold is:

• ten employees if the employer has 20 to 100 employees;
• 10% of employees if the employer has 101 to 300 employees; and
• 30 employees if the employer has more than 300 employees.

The respective number of employees must be dismissed due to redundancy within a period of 30 days. If at least five employees are dismissed within 30 days by termination notice due to redundancy, then employees dismissed in the same period by termination agreement are included in these thresholds.

In addition to the process above, collective dismissal must be:

• consulted with unions 30 days in advance, or notified to each affected employee if there are no active unions at the employer; and
• notified to the local Labour Office: (i) in advance, including information on commencement of the consultation process with unions; and (ii) on its result once it’s completed, in the form of a written report that must be delivered in copy to unions, which then have the right to comment on it – employment relationships can terminate only after the lapse of 30 days following this.

For a collective redundancy, employers would need to the follow the Last In First Out (LIFO) principle for workmen, which states that the workmen last employed in a category of workmen should be the first ones to be made redundant. In this regard, the employer is required to prepare a list of all the workmen in a particular category from which redundancy is contemplated, arranged according to seniority of service in that category, and display this seniority list in a conspicuous place in the premises in the prescribed manner. Once the relevant workmen are identified, the requirements as set out in question 2 would have to be followed.

There is no difference for the collective redundancy of non-workmen. The legal processes set out above will apply for collective redundancy too.

Yes, the employer must consult any termination notice in advance. Agreement doesn’t have to be reached (with the exception of employees with enhanced protection; see question 11). In practice, the consultation is more of an announcement.

In case of collective dismissal, consultation must take place, and the employer must try to reach an agreement and inform the Labour Office of the result.

There is no requirement for employers to consult with employees, their representatives or unions to effect redundancies, and accordingly, no such agreement is required to be reached. However, if there are any information or consultation requirements under a collective bargaining agreement, the same will need to be complied with.

It is the employer’s right to make an organisational change and its factual validity cannot be challenged. However, the individual dismissals may be challenged by employees. If successful (ie, the employer doesn’t prove redundancy), the restructure in the individual case may be prevented.

In the case of collective dismissals, it may be delayed by the unions prolonging the consultation. However, even then the unions and the Labour Office can’t prevent the dismissal, and the only way to prevent individual dismissal is a successful individual challenge by the dismissed employee.

If the unions believe that the collective agreement was violated by the redundancy or in the process of its implementation, they may dispute this violation. The dispute may be resolved by a mediator or escalated to an arbitrator. However, this doesn’t prevent the employer from executing the dismissals or restructure (only if violation is later found, it may have certain implications based on the individual collective agreement and nature of its violation).

This is not applicable, since there is no legal requirement to consult or reach an agreement concerning a redundancy or restructuring.  

In case of individual dismissal, the consultation process is, rather, a notification (with the exception of employees with enhanced protection; see question 11) including:

• the identity of the employee;
• termination grounds (redundancy); and
• basic details of the redundancy (why and when).

It should take place prior to the dismissal (no specific deadline is given).

In case of collective dismissal, the consultation process includes:

• measures preventing or limiting the collective dismissal;
• mitigation measures (eg, employing the redundant employee at other workplaces of the employer);
• reasons;
• number and professions of redundant employees;
• number and professions of all the employees;
• the period during which the collective dismissal takes place;
• selection method of redundant employees; and
• severance pay and other rights of the redundant employees.

The consultation process must take place no later than 30 days prior to the collective dismissal. The local Labour Office must be notified as well (see question 3).

The administrative fine for violation of the consultation process with unions is up to 200,000 koruna. Employees who suffer damage as a result may claim compensation.

No such consultation process or related remedies if there is a breach are prescribed under Indian labour laws.

Yes, an economic business rationale should be the reason for organisational change, and therefore the redundancy, and as such should be part of the consultation.

There are no such requirements prescribed under Indian labour laws.

In case of collective dismissals, if there are no unions or employee representatives, the employer must inform and directly consult the affected employees to the same extent.

In case of individual dismissal, it is not a requirement, nor best practice, and highly depends on the strategy in the individual case.

While there is no statutory requirement to consult employees, typically, employers inform employees about the proposed redundancy through town halls for collective redundancies, or through one-on-one discussions for individual redundancies.

The only rule is that the employee’s position or work must be genuinely redundant (see question 1). If more than one employee fulfils this condition, it is up to the employer which employee to select. However, this choice must not indicate that there are in fact different motives for the redundancy of the selected employee (eg, disputes with the employer, unsatisfactory performance, or gender or other discriminatory motives).

For workmen, the LIFO rule highlighted above would have to be followed. There are no such rules prescribed for non-workmen.

Yes, a termination notice due to redundancy is not allowed during the period for which an employee is:

• declared temporarily medically unfit for work or in institutional treatment (unless the employee has intentionally caused this unfitness, or it is a direct consequence of the employee’s alcohol intoxication or substance abuse);
• deployed in military exercises or military service;
• on long-term full leave to act in public office;
• pregnant, or on maternity leave, paternity leave, or parental leave;
• declared temporarily unfit for night work if they perform night work; or
• on leave caring for a child under 10 years of age, treating a child under 10 years of age or other natural persons, or providing long-term care, all as specified in the Czech Sickness Insurance Act.

While there are no specific categories of employees under Indian labour law who are protected from being made redundant, the employment of:

• a woman on maternity or related leave under the Maternity Benefit Act, 1961;
• an employee receiving sickness benefit, maternity benefit or disability benefit under the Employees’ State Insurance Act, 1948; and
• a workman involved in a dispute with the employer or who is a recognised member of the executive or other office bearer of a registered trade union concerned with such a dispute, cannot be terminated during the period or continuation of such leave (except for gross misconduct), benefit or dispute, respectively.

Yes, members of a trade union body during their term of office and for a period of one year after the end of their term of office. The employer must have prior consent of the unions for termination of their employment relationship by a notice. Consent is deemed to be given if the unions don’t respond within 15 days. Consent is valid for two months. Termination notice without such consent is invalid unless the court decides in the validity case that the employer could not have been justifiably required to keep the employee.

Please see question 10.

A redundant employee is entitled to a statutory severance payment, regardless of whether the employment termination is made by notice or agreement and if the redundancy is explicitly stated as the reason for the termination.

The severance payment is due on the next scheduled pay date following the termination of employment. A later due date can be agreed.

The terminal dues payable to employees at the time of redundancy are as follows, along with the corresponding timeline:

• accrued salary, the payment timelines for which vary from state to state, but typically paid within two days of the termination date;
• notice pay and retrenchment compensation, as highlighted in question 2. Some states may also require the equivalent of retrenchment compensation to be paid to non-workmen in certain cases, under the LSE Acts;
• wages in lieu of accrued but unused privilege or annual leave as of the last date of employment (leave encashment), subject to maximum prescribed limits. While the payment timelines vary from state to state, these are typically paid within two days of the termination date;
• gratuity under the Payment of Gratuity Act, 1972 (Gratuity Act)[1] to employees who have rendered continuous service for at least five years (interpreted by the courts as four years and 240 days), within 30 days of the last date of employment;
• statutory bonus to employees earning a monthly salary of up to INR 21,000 in accordance with the Payment of Bonus Act, 1965 (PBA)[2], provided they have worked for at least 30 days in the year of payment. While the PBA does not prescribe any specific payment timelines for termination of employment, it is typically paid out with the other amounts mentioned above; and
• any other contractual amounts, as per the terms of employment, such as incentives and contractual bonuses.

The severance payment amount differs based on the length of the employment as follows:

• one gross average monthly salary of the employee if the employment lasted less than one year;
• two gross average monthly salaries of the employee if the employment lasted at least one year but less than two years; and
• three gross average monthly salaries of the employee if the employment lasted at least two years.

If the working hours account applies (specific working hours distribution scheme under the Czech Labour Code) the statutory severance is the relevant amount above plus three gross average monthly salaries of the employee.

The severance payment may also be higher if stated so by:

• agreement between the parties;
• the employer’s internal regulations; or
• a collective bargaining agreement.

A gross average monthly salary of the employee must be calculated for each employee separately using the specific rules of the Labour Code.

Please see questions 2 and 12 for the eligibility criteria for terminal dues. The formulae for calculating such terminal dues, where applicable, are as follows:

• Retrenchment Compensation: (Average Pay/30) * 15 * years of continuous service, where average pay is the average of the monthly wages of the last three calendar months before termination;
• Gratuity:  Last drawn wages * 15/26 * number of completed years of service (including part thereof that exceeds six months), subject to a cap of INR 2,000,000, unless otherwise agreed with the employer.
• Leave Encashment: Number of days of leave in the employee’s credit* average daily wage, subject to the maximum accumulation limit prescribed in the LSE Act or the Factories Act, 1948, as applicable – the limit of which ranges between 30 and 63 days depending upon the state for the LSE Act, and 48 days under the Factories Act, 1948; and
• Statutory Bonus: to be paid as 8.33% to 20% of wages payable to eligible employees, contingent on the financial performance of the employer in the accounting year.

Not in cases of individual dismissals.

In cases of collective dismissals, the employer must notify the relevant branch of the Labour Office:

• of the intention to carry out collective dismissal;
• that the consultation process has been initiated with the unions or the employees; and
• of the specific aspects of the collective dismissal, to the same extent as the unions (see question 6).

Following the consultation, the employer must deliver a written report to the Labour Office stating:

• that the employer has decided on collective redundancies;
• the outcome of the consultation process;
• the number and occupational composition of all employees; and
• the number and occupational composition of the employees to be made redundant.

A copy of the report must be delivered to the unions, which then have the right to comment on it.

Please refer to question 2.

No, generally there is no such obligation. If the conditions for dismissal due to redundancy are met, the employer is not obliged to offer the employee an alternative solution.

However, in some specific individual cases, the courts have concluded that if the employer still needs the work on part-time basis, the employer should first offer the employee this part-time job.

There is no such statutorily prescribed requirement. However, employers may consider accommodating employees in their other entities or other roles, if possible.

There are no specific notification obligations after making the redundancies. Only general notification obligations, which are the same for all employment terminations, apply.

These general notifications must be made within eight days, using the relevant forms, to: (i) the employee’s health insurance company; and (ii) the District Social Security Administration (including the pension insurance record sheet).

If wage deductions were made to satisfy the employee’s debt to a third party, the employer must notify the relevant court (or tax authority case of tax debt), including an account of the deductions.

As a matter of regular compliance, for social security benefits and related legislation, employers must notify labour authorities about any employees who are no longer on the company’s rolls.

Regarding expatriate employees, under Indian immigration laws, the sponsoring entity is required to inform the respective Foreigners Regional Registration Office or Foreigner’s Registration Office about terminating the employment of that expatriate employee for any reason and confirm the expatriate employee’s departure from India, along with flight details and date of departure.

An employee may challenge the validity of a dismissal for redundancy if they consider that the statutory conditions were not met. First, the employee who wishes to remain employed must inform the employer without undue delay after the termination notice that they insist on continuing their employment. Second, the employee must file a lawsuit at the district court of the employer’s seat (residence or registered address). The lawsuit must be made within two months from the date on which the employment should have ended. After the two months, the right to file the lawsuit expires.

If the dismissal for redundancy is found invalid, the employee who wishes to remain employed remains to be employed at the original position under the original conditions and is entitled to a full compensation of salary for the whole time from the invalid termination until work is assigned again, or until the employment is validly terminated (ie, including the time of the court proceedings). The court may reduce the amount of such compensation if, for example, the employee has found another job in the interim, or could have found one.

There’s no statutory authorisation for unions to raise any claims at the court on behalf of employees except for insolvency proceedings (see question 21). However, only attorneys at law can represent employees fully and without limits in any proceedings. Another natural person can be granted a power of attorney in a specific case (not repeatedly). Theoretically, this could be a member or employee of the unions, but this is not a market standard.

For workmen, such employees (either themselves or through a union) may raise an industrial dispute with the employer concerning their termination and approach the conciliation officer of the appropriate government under the IDA, in the first instance, for adjudication of that dispute. If conciliation fails, the appropriate government may refer the dispute to the labour board, labour court or tribunal, at its discretion. The workmen may also approach the labour court or tribunal for adjudication of the dispute after 45 days from the date of the application to the conciliation officer, if it is not resolved. Typically, such employees claim for reinstatement with or without back pay.

For non-workmen, while the termination itself is unlikely to be struck down with the non-workmen being reinstated (since there cannot be specific performance of personal contracts), they could claim payment of damages, before the civil courts, if the termination is not effected under the agreed contractual terms or the LSE Act, if applicable.

Yes, it is very common and highly recommended to terminate the employment by mutual agreement when making employees redundant. The termination agreement does not have to state any reasons for termination. However, should the reason be redundancy of the employee, the employee is entitled to statutory severance payment regardless. To motivate the employees to conclude the termination agreement, it is a market standard to offer a higher severance package than the statutory severance payment.

Given the complexity of the process to be followed by the employer for terminating employment on grounds of redundancy and to ensure an amiable exit, employers often opt for a negotiated exit and enter into a mutual separation or settlement agreement or voluntary retirement scheme (for a mass redundancy), which, inter alia, involves payment of ex gratia amounts.

Individual redundancies generally take around two to three months. The organisational change must be prepared, and the termination agreement negotiated or the termination notice given. In case of the notice, the statutory notice period is two months. There’s no statutory notice period requirement in case of agreement, therefore it can be faster. It can also take longer (eg, more complicated cases, restructuring, C-level or other higher managers).

For collective redundancies, the process takes several months (at least three) due to higher demands on preparation, more complicated structuring, the consultation process, and the notification obligation to the Labour Office.

The timeline for the completion of redundancy would depend on the number of employees engaged in a workplace, as this triggers either an approval or notification requirement. In cases where only a notification is to be provided for effecting redundancy, the process can be completed relatively quickly.

However, if approval is required before initiating redundancies, the process is usually drawn out. In our experience, it is rather difficult to obtain the approval of the local labour authorities for retrenchments (including redundancies) and the authorities take several months to discuss the application for approval, before granting or rejecting the application.  

The statutory law does not expressly prohibit certain conduct. However, a redundancy means that the employee’s work is no longer needed and therefore any hiring (internal or external) for the same (or largely the same) position should be avoided (or at least thoroughly considered), especially for the two-month period during which the employee can challenge the validity of the dismissal.

Under the IDA, if any workmen were retrenched (including for redundancy) and the employer were to subsequently employ any person in a similar capacity, the employer must provide an opportunity for the retrenched workmen to offer themselves for re-employment and such workmen who offer themselves for re-employment, must get preference over other persons.

There are no similar limitations or requirements for non-workmen.

The term “restructuring” in Czech law means one of the ways of resolving a company’s bankruptcy in insolvency proceedings. During this process, organisational changes including redundancies may occur. This kind of restructuring does not require unions’ consent; however, consultation may be required. Further, unions may represent the employees in insolvency proceedings.

In Czech law, “restructuring” within the meaning of a business transaction or corporate transformation or changes (i.e. not a type of insolvency proceeding) can also lead to transfer of rights and obligations from the employment relationship to another employer (transfer of undertakings), ie, the employee and their employment will be transferred to a new employer as a result of such transaction. In this case, the employer must inform the unions or other representatives (and if there are none, then the individual employees) and consult at least 30 days in advance:

• the effective date of the transfer;
• reasons for the transfer;
• legal, economic, and social consequences of the transfer for the employees; and
• measures to be taken in relation to the employees.

In case of cross-border mergers or spin-offs, the employer also must: (i) inform the employees or unions of their right to get acquainted with the written merger or spin-off project and give written comments on it; and (ii) generally reach agreement with unions regarding the extent and manner of the right of influence of the employees of the successor corporation (for example, in certain cases by electing a certain number of members of supervisory board in a joint stock company) if the seat of the newly formed entity is supposed to be in the Czechia. Further corporate obligations depend on the form of such restructuring.

However, the described labour law obligations don’t apply in the case of mere ownership change of the employer’s company where this has no direct legal implications for the employees (ie, it isn’t a transfer of undertaking or a termination reason).

There are no statutorily prescribed consultation or consent requirements under Indian labour law for undertaking such transactions.

In general, employees have limited ability to influence the process of business transactions. The consultation process (see question 21) doesn’t have to result in an agreement with or of the unions. The administrative fine for violation of the consultation process is up to 200,000 Czech Koruna. If there are no unions and the employer breaches its information obligation towards the individual employees (see question 21), the law provides no administrative penalty. In each case, the employee could claim compensation for damage if any damage occurred.

Since there are no statutorily prescribed consultation requirements, there are no statutorily prescribed remedies available to employees to prevent any such transactions or proposals.  

If the statutory conditions for transfer are met, the transfer occurs automatically, ie, neither the original employer, the new employer, the employees, nor the unions can avoid the transfer. An employee may prevent their own transfer only by serving termination notice to the employer before the transfer’s effective date, in which case the employment terminates on the day immediately preceding the transfer’s effective date at the latest. If the employer didn’t inform employee at least 30 days in advance (see question 21), the employee may serve their termination notice within two months after the transfer’s effective date – in which case, only a 15-day notice period applies.

Individual rights and obligations are transferred in full to the new employer. The rights and obligations under the original employer’s collective agreement are also transferred to the new employer, but only for the duration of the collective agreement, and for no longer than to the end of the following calendar year.

Transfer itself is not a statutory reason for terminating the employment. However, a restructuring (organisation change) leading to redundancy may happen before, during, or following the transfer. In such a case, the employee has the same rights as in the case of other redundancies.

If the employee terminates the employment by a notice or by an agreement within two months of the effective date of the transfer, they may raise a claim at court that the reason for termination was a substantial deterioration in working conditions caused by the transfer. If the court confirms it, the employee will be entitled to statutory severance (see question 13).

Both the IDA and the LSE Acts (in some states such as Andhra Pradesh, Goa and Telangana) protect employees when there is a transfer of an undertaking (commonly known as a business transfer or slump sale).

Under the IDA, for a transfer of an undertaking, workmen who have been in continuous service for not less than 240 days are considered to be retrenched, unless the workmen are transferred to the transferee entity on the following conditions:

• the services of the workmen are not interrupted by this transfer;
• they are on terms no less favourable than what was being provided by the transferor entity; and
• the transferee entity is liable to pay the workmen retrenchment compensation on the basis that their services have been continuous and uninterrupted by the transfer (Transfer Conditions).

If the employer cannot guarantee that the above conditions will be met, there is a legal assumption that the workman has been dismissed. The employer would then have to comply with the statutory requirements concerning termination or dismissal. The courts have also held that a workman cannot be forced to join the transferee entity against their will, even if the Transfer Conditions are being fulfilled.  

The transfer of non-workmen would be regulated by the terms of their employment contracts, and the LSE Acts (in some states) (with similar stipulations as workmen, except the qualifying period of continuous service may differ).

Since the transfer of rights and obligations under employment law occurs automatically, it is generally sufficient to follow the legally prescribed procedure for a given business transfer. In addition, it is necessary to comply with the information and consultation obligation (see question 21). Further, general reporting and notification obligations to the state authorities apply.

In a business transfer, the consent of employees is required for a transfer from one employer to another, in addition to the requirements set out in question 3. Such consent can be express or implied. As a result, the transfer of employment can be implemented through one of the following methods:

• a joint letter issued by both the transferor company and transferee company to the employees, informing them of the transfer of their employment following the Transfer Conditions; or
• voluntary resignation by each employee from the transferor company, and simultaneous engagement by the transferee company.

Where there is an intra-group transfer, the manner of transfer will be governed primarily by the terms of employment. However, the Transfer Conditions are typically adhered to even for intra-group transfers.

The working conditions of the transferred employees cannot substantially worsen. If this were to happen and the employee gave termination notice within two months of the transfer, the employee could claim statutory severance (see question 23).

In addition, the employer must comply with the general principle of equal treatment and ensure equal treatment of both the original and new employees in terms of their working conditions, remuneration, and other benefits, training, and the possibility of promotion.

In a business transfer, the terms of employment after the transfer must not be less favourable to the workmen and non-workmen (in some states) than before. While there is no requirement to maintain identical terms, the new terms of employment, in aggregate, should not be any less favourable than what had previously been provided.

If the hours, pay, or benefits are agreed in the employment or other contract, then no unilateral change can be made.

Working hours – either statutory weekly working hours apply (40 hours per week) or shorter working hours are agreed. In either case, the employer determines the distribution unilaterally (subject to complying with statutory rules and limits) unless agreed differently.

Salary – if it isn’t agreed in the employment or other contract, the employer unilaterally determines the salary by an internal regulation or by a salary statement.

Benefits – if they aren’t agreed in the employment or other contract, the employer unilaterally determines the benefits by an internal regulation or by a salary statement.

Yes, these employment conditions can be modified.

For workmen, any change to employment conditions specified in the Fourth Schedule of the IDA (which includes a change in work hours, pay, benefits, leave, and discipline rules, etc.) must be made as per the IDA, which requires providing written notice of the change to employees 21 days before effecting such change (with a copy to government authorities), unless the change is being effected according to a settlement or award, or as a disciplinary measure due to proven misconduct, provided the measure is prescribed under the company’s internal policies and is commensurate with the gravity of the offence committed.

For non-workmen, such employment conditions may be changed under the terms of employment.

As for employment terms and conditions in general, if these have been agreed in the employment or other contract, they can be changed only by agreement. Validity of express contractual provision to vary the conditions depends on its structure and which conditions it concerns, and therefore there’s no generally applicable answer to the question.

The Labour Code further allows, in certain cases, a change in type of work, workplace, or employer by a temporary transfer of an employee to a different work position, workplace, or employer. Generally, consent is required; however, in certain cases, the employer can (and in very specific cases, has to) make a temporary transfer unilaterally (for example, if the employee is medically unfit to perform the agreed type of work, or to avert imminent danger). The employer must adhere to strict statutory conditions.

While it is market practice for employers to include such enabling provisions under employment contracts and policies to modify or amend the terms unilaterally, the requirements as mentioned above and as set out under the law have to be followed to alter the terms of employment of workmen. For non-workmen, the employer can rely upon contractual provisions to vary an employment term.

Yes, the employee and the employer may agree on certain changes and variations implicitly. However, it is recommended to avoid such situations.

Yes, this may be possible, such as when the employees have been notified about the changes, and are provided a timeline within which they can raise concerns regarding the same. If they do not raise concerns within a stipulated time, their consent may be inferred.

If agreement is required to vary an employment term or condition, then the only option to vary it is an agreement.

There is no requirement for consent for varying terms of employment, the requirement is to only inform employees and government authorities about the change. If the employees refuse to agree to the change once it is effected, the employer may consider terminating their employment for breach of terms or not continue with the new terms, as appropriate.

If varied unilaterally in a case where agreement was required, the employee may challenge the variation (depending on the situation, by demanding the employer to: refrain from such conduct, restore the original terms, or compensate the employee for the damage caused by such conduct). Depending on the situation there could also be a risk of administrative penalties.

For workmen, if such a unilateral change is effected without following the requirements under the law, then the employees could challenge this through an industrial dispute. Until that dispute is resolved, the change cannot be brought into effect.

For non-workmen, the contractually agreed terms under the employment contract or policies would determine whether a term can be unilaterally varied. If the same cannot be done, and the employer does so, then non-workmen go through the courts for breach of contract.

The Czech parliament is currently debating several changes in the area of labour law. However, none of the currently debated changes should affect the answers above.

There is a proposal to consolidate and harmonise India’s vast array of central labour legislation, including the IDA, into four comprehensive labour codes viz., Code on Wages, 2020; Code on Occupational Safety, Health and Working Conditions 2020; Code on Industrial Relations 2020 (IR Code); and Code on Social Security 2020. The codes will have to be read within the state-specific rules. While the updated labour codes have been notified, they are yet to be brought into force, barring a few administrative provisions. The states are in different stages of notifying the rules.

Once effected, the IR Code will, inter alia, regulate the termination of employment, employee transfer and the manner of changing terms of employment, and prescribe a similar process to be followed as the current laws. However, to promote ease of doing business, the IR Code prescribes a higher employee threshold of 300 workers (a term having similar meaning to workman) for seeking prior permission from the government to terminate employment. Separately, in addition to the retrenchment compensation, the IR Code requires employers to make an additional contribution equivalent to the retrenchment compensation amount to a “Worker Re-skilling Fund”, in respect of the retrenched worker. Further, a fixed-term worker rendering services for more than one year would also be entitled to a pro-rated gratuity at the time of termination of employment.

Lastly, given the widened definition of the term “wages” under the labour codes, the quantum of terminal payments may also increase.