As an employee, one should know one's rights, as an employer one's obligations - but do not leave the design of the implementation to third parties or to the staff themselves. Especially in subsidiaries or other presences abroad, it is important to know and implement the applicable laws, regulations and recommendations. 

Other countries, other customs. This also applies to the laws and legal requirements that must be adhered to. At the same time, it is important to know these well and to apply them to your own company in order to avoid abuse. As in many other areas, German or European regulations cannot be transferred 1:1 to the Indian workforce. The requirements there must be observed, understood and integrated into the company policy - in the form of an HR policy. 

HR policy as a preventive measure

An important part of this HR Policy is social security (Provident fund). If companies do not establish clear rules in this regard, they may face enormous costs. 

The same applies to retirement age and retirement. Here, too, there are rules and laws that determine the age. However, since there are different retirement age limits, this quickly leads to vague statements and demands from employees that are unfavorable for the company or even unjustified. It is essential that the retirement limits are defined even before the signing of employment contracts in order to avoid unnecessary costs. In our work with European companies in India, we have seen cases where 5- to 6-digit euro amounts had to be paid.

Identify and contain trip hazards

Beside the classical vacation days, which we also know in Germany, there is in India the so-called casual leave and specified sick days. Unused vacation days can usually be accumulated and carried over to subsequent years. 

  • The limit these accumulated vacation days, that is, the maximum number of days accumulated, depends on the company. For example, if a company has set a limit of 45 days and awards 15 days per year, employees can accumulate all their vacation for three years if it is 15 days per year.  
  • The accumulated vacation days can be paid out. However, there is only an entitlement to payment if, for example, an employee leaves the company or vacation requests have not been approved by a certain date. So in our example, it would not be obligatory to have the vacation paid out after three years. This is because the employee does not leave the company and also had the opportunity to take leave in the meantime.  
  • For a holiday should be submitted vacation days. Sounds logical, but in reality it is not always implemented. Instead of vacation days are gladly sick or casual leave -days are used so that the vacation days are not 'wasted'. Because sick days and casual leave-Days can neither be carried over to the following year nor paid out. 

So, as a company, one should know, among other things, how many days of leave can be accumulated or make sure that the correct days are used (sick days in case of illness, days of leave in case of travel, etc.). If the staff takes advantage of the lack of knowledge and misleads the employer, the company may suffer financial damage.

Another example from our practice is the handling of public holidays. Due to the many religious communities in India and the variety of holidays, companies have to decide at the beginning of the calendar year which holidays will be set as actual days off. Usually, the choice depends on the location and the religious communities represented there and the religious affiliation of the employees.  

Protect against serious consequences

In order to prevent such 'stumbling blocks', clear guidelines must be developed, communicated and, above all, consistently implemented. The HR policywhich, among other things, also includes the Travel or leave policy must be integrated into the corporate culture. If these guidelines are missing, free interpretation and own rules can occur.  

Together with you, we develop policies that fit your company, which contain the relevant guidelines and enable a clear company standard. 

Missing guidelines or incomplete Policies can lead to companies being held liable in certain extreme situations. This may result in criminal prosecution of the management, up to and including prison sentences.  

If an HR policy already exists in the company, it is therefore important to check its content and completeness. Here, too, the following applies: A clear guideline as a preventive measure protects the company from possible discrepancies and curbs disputes. 

Discover differences and optimize measures

As a company with business in India, one should not blindly rely on the fact that all information that ends up in the European head office also corresponds to the actual specifications and, above all, is in the economic interest of the company - regardless of the location of the subsidiary.  

With defined, concrete guidelines that we can develop together with you, there is no room for 'misunderstandings' or the staff's or HR department's own interpretations. Based on our experience, we know what the consequences of certain steps will be and can therefore develop suitable policies for each company with foresight. 

This enables us to identify differences and optimize them with appropriate measures. The development and implementation of the company's own guidelines also enable greater transparency in the cooperation between the head office and the presence abroad.  

Would you like to review your guidelines or do you need support in drafting (new) guidelines that suit your company? Call us or write to us a message.