HR Policy: Guidelines as prevention for your own personnel policy

As an employee you should know your rights, as an employer you should know your obligations – but do not leave the implementation to third parties or the staff themselves. It is particularly important to know and implement the applicable laws, regulations and recommendations in subsidiaries or other offices abroad.

Different countries, different 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 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 local requirements must be observed, understood and integrated into company policy – in the form of an HR policy.

HR policy as a preventive measure

An important part of this HR policy is social insurance (provider fund). If companies do not establish clear regulations in this regard, they can be faced with enormous costs.

The same applies to retirement age and retirement. Here, too, there are rules and laws that determine the age. However, as there are different retirement age limits, this can quickly lead to vague information and demands from employees that are unfavorable for the company or even unjustified. It is essential that retirement limits are defined before employment contracts are signed 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.

Recognizing and preventing tripping hazards

In addition to the classic vacation days that we also know in Germany, India has so-called casual leave andfixed sick days. Unused vacation days can generally be accumulated and carried forward to subsequent years.

• The limit of these accumulated vacation days, i.e. the maximum number of days accumulated, depends on the company. For example, if a company has set a limit of 45 days and allocates 15 days per year, employees can accumulate all their vacation for three years if this 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. In our example, it would therefore not be obligatory to have the vacation paid out after three years. This is because the employee does not leave the company and has had the opportunity to take vacation in the meantime.
• Vacation days should be submitted for a vacation. Sounds logical, but is not always implemented in reality. Instead of vacation days, sick or casual leave days are often used so that vacation days are not ‘wasted’. This is because sick days and casual leave days can neither be carried over to the following year nor paid out.

As a company, you should therefore know, among other things, how many vacation days can be accumulated or ensure that the correct days are used (sick days for illness, vacation days for travel, etc.). If staff take advantage of the lack of knowledge and mislead the employer, this can result in financial damage for the company.

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

Protection against serious consequences

In order to prevent such ‘stumbling blocks’, clear guidelines must be developed, communicated and, above all, consistently implemented. The HR policy, which also includes the travel or leave policy, must be integrated into the corporate culture. In the absence of these guidelines, a free interpretation and own rules can arise.

We work with you to develop policies that are tailored to your company, 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 can lead to criminal prosecution of the management, including prison sentences.

If an HR policy already exists in the company, it is therefore important to check its content and completeness. The following also applies here: a clear guideline as a preventative measure protects the company from potential discrepancies and curbs disputes.

Discover differences and optimize measures

As a company with business in India, you should not blindly rely on the fact that all information that ends up at the European headquarters also corresponds to the actual requirements 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. Thanks to our experience, we know what consequences certain steps will have and can therefore develop suitable policies for every company with foresight.

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

Would you like to review your guidelines or do you need support in drawing up (new) guidelines that suit your company? Give us a call or send us a message.