Rights of private employees
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Rights Of Private Employees- Chapter I

January 22, 2021

Often we come across a burning question- are the rights of private employees protected under or by any law? If yes, then what is it or what are the laws?

The answer to this question is always "somewhere" at the "there about" boundary and comes with a lot of "ifs" and "but" as there is much more than what the naked eyes meet or our logical analyses decode.

Rights of private employees: Chapter I is the first instalment in a series where we are going to speak and discuss the rights of private employees.

Important Rights Of Private Employees Protected By The Law?

Although there are terms of employment defining the specific terms, the employees in the organised private sector are governed by various laws- the Payment of Bonus Act, Equal Remuneration Act, Payment of Gratuity Act, Employees Provident Fund and Miscellaneous Provisions Act, Employees’ State Insurance Act, Maternity Benefit Act, etc.

The right to safe working place with basic amenities, right to appropriate working hours, right to any assured incentive etc. are protected under the law. Here’s a list of essential rights of an employee under the various laws and regulations.

Employment Agreement

These days the norm is to enter into an employment agreement which details out the terms of employment like, compensation, place of work, designation, work hours, etc.

The rights and obligations of both the employer and employee are listed out clearly like non-disclosure of confidential information and trade secrets, timely payment, provident fund etc. In case of a dispute, the agreement also contains a mechanism for effective dispute resolution.

Provident Fund

Employee Provident Fund Organisation (EPFO) is the national organisation which manages this retirement benefits scheme for all salaried employees. Any organisation with more than 20 employees is legally required to register with EPFO.

Any employee can opt-out of the scheme provided they do it at the beginning of their career.

The amount cannot be withdrawn at will. The rules limit the withdrawal amount and term of years in service.

Once registered, both employer and employee have to contribute 12 per cent of the basic salary to the fund. If the employer does not pay his share or deduct the entire 12 % from the employee’s salary, he can be taken to PF Appellate Tribunal for redressal.

The amount can be withdrawn subject to a waiting period of a maximum of two months for emergent needs and necessary expenses.

The rules specify limits of withdrawal and the necessary years of service for each purpose. An employee can withdraw a maximum of 3 times, and if withdrawn before five years the amount becomes taxable. A list of withdrawal rules of EPF is available here.


The Payment of Gratuity Act, 1972 provides a statutory right to an employee in service for more than five years to gratuity.

It is one of the retirement benefits given to the employee. It is a lump sum payment made in a gesture of gratitude towards the employee for their service. The amount of gratuity increases with increment and the number of years of service.

However, if the employee is dismissed for proven lawless or disorderly conduct, forfeits this right upon dismissal.

Timely And Fair Salary

The whole point of providing service for an employee is fair and appropriate remuneration.

Article 39(d) of the Constitution provides for equal pay for equal work. The laws under The Equal Remuneration Act, The Payment of Wages Act, mandates timely and fair remuneration of an employee.

If an employee is not receiving his/her remuneration as per the employment agreement, can approach the Labour Commissioner or file a civil suit for arrears in salary. An employee cannot be given wages less than the legal minimum wages, as per law. A more detailed look into the remuneration under the Equal Remuneration Act is available in this article.

Appropriate Working Hours And Overtime

All employees have a right to work in a safe workplace with basic amenities and hygiene.

The Factories Act provides and the Shop and Establishment Acts (statewide) protects the rights of the workers and non-workmen.

Under the most recent laws, an adult worker shall work over 9 hours per day or 48 hours per week and overtime shall be double the regular wages. A female worker can work from 6 am to 7 pm.

This can be relaxed to 9.30 pm upon explicit permission, and payment for overtime and safe transportation facility. Apart from this weekly holiday, half an hour break and no more than 12 hours of work on any given day are mandated. The working hours for child workers are limited to 4.5 hours a day.

Right To Leaves

An employee has the right to paid public holidays and leaves such as casual leave, sick leave, privilege leave and other leaves.

For every 240 days of work, an employee is entitled to 12 days of annual leave. An adult worker may avail one earned leave every 20 days whereas its 15 days for a young worker.

During notice period an employee can take leaves for emergencies, provided the employment agreement does not bar it.

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