Liability of Principal Employer for payment of Wages and Bonus to Contract Labour – Proposed Wage Code Regime LLabour & Employment Law, Corporate & Commercial All Industries November 25, 2020 Sunil Arya Advocate & Principal Associate Engagement of contract labour has been a common industry practice for several decades in India. The system has proved […]
A Global Capability Centre (GCC) of a leading motor vehicle components manufacturer engaged the Firm on a retainer basis for ongoing advisory on labour and employment matters, requiring consistent legal support across workforce policies and operational issues.
We provided continuous, practical legal guidance across a range of workplace matters. Our approach included:
The engagement enabled the client to:
Ongoing engagement ensures consistency in handling workforce matters.
Well-defined policies strengthen organisational clarity and compliance.
Business-aligned advice supports effective decision-making.
Early intervention helps mitigate risks in workplace matters.
A major clothing manufacturer received notices alleging non-payment of contributions under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The situation escalated with the attachment of the company’s primary bank account, creating immediate operational and financial challenges.
We advised and represented the client in challenging the government’s actions before the High Court of Karnataka. Our approach included:
The client secured immediate relief with:
The matter is currently pending before the High Court of Karnataka.
Timely action is critical in matters involving coercive recovery measures.
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Strong representation ensures effective handling of ongoing proceedings.
A multinational computer hardware manufacturer faced an appeal under the POSH Act following an Internal Committee finding that dismissed allegations of sexual harassment. The appeal raised multiple procedural and substantive challenges, further complicated by the time gap between the original inquiry and the appellate proceedings.
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Strong adherence to POSH processes supports defensibility at the appellate stage.
Reconstructing facts in older matters requires structured documentation and strategy.
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A large engine manufacturer commissioned a one-time labour law audit across its manufacturing units to assess compliance with statutory requirements and identify operational risks. The review revealed significant gaps, particularly around working hours and mandatory rest periods for both direct and contract workers.
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The client was able to:
Audits help uncover systemic gaps in working conditions.
Adherence to working hours and rest periods is essential for legal and operational stability.
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A large pharmaceutical company faced reputational challenges when a senior employee made false allegations against senior management and published defamatory content across multiple social media platforms. Despite internal investigations disproving the claims, the posts continued, escalating the issue.
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The client successfully addressed the situation with:
Timely legal action is critical in addressing reputational threats.
Handling defamation requires coordinated action across legal and digital platforms.
Progressive steps-from notices to enforcement-enable controlled resolution.
Swift response helps safeguard organisational trust and credibility.
A global manufacturing network with multiple factories and subsidiaries across India required a comprehensive audit of its labour and environmental compliance practices. The engagement involved assessing statutory adherence, workplace safety, and governance across operations and vendor ecosystems.
We conducted an extensive, multi-layered audit combining on-ground assessments with detailed analysis. Our approach included:
The engagement enabled the client to:
Comprehensive audits must cover operations, workforce, and vendor ecosystems.
On-site verification and worker interactions provide critical practical insights.
Clear, tailored inputs enable effective corrective measures.
Standardisation improves long-term governance and operational resilience.
A large food manufacturing company undertook the closure of one of its factories in Bengaluru. The matter involved navigating complex labour law requirements, obtaining statutory approvals, and addressing workforce challenges, including employee strikes and union resistance.
We provided end-to-end legal advisory and representation throughout the closure process. Our approach included:
The client successfully executed the closure with:
Closure of manufacturing units requires strict adherence to statutory processes.
Effective legal strategy is essential to navigate strikes and union challenges.
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A multinational financial institution faced allegations of widespread financial misconduct involving a large number of employees. The scale and urgency of the matter required a structured, coordinated investigation process to address risks and enable timely action.
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The client successfully addressed the matter with:
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Well-documented findings support strong disciplinary decisions.
A large clothing manufacturer faced complaints of sexual harassment against a senior executive, raised by two employees. The matter was sensitive, involving serious allegations and concerns of retaliation, requiring a careful, compliant, and confidential approach under the POSH Act.
An External Member from the Firm was part of the Internal Committee constituted under the POSH Act. We provided end-to-end advisory throughout the inquiry process. Our approach included:
The matter was successfully concluded with:
Handling such matters requires a balanced and discreet approach.
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Timely interim measures are critical to protect complainants.
Decisive action reinforces trust and fosters a safe working environment.
The client challenged provisions under the Employees’ Provident Fund Scheme and Pension Scheme that required higher provident fund contributions for international workers compared to domestic employees. This created an unequal framework and imposed a significant financial burden on employers, while also impacting take-home pay for international workers.
We represented the client in challenging the validity of these provisions before the High Court of Karnataka. Our approach included:
The High Court of Karnataka struck down the relevant provisions, resulting in:
The judgment has been challenged by the EPFO; however, as of March 2026, the appeal is pending with no stay on the original order.
Differential treatment must have a clear legal and rational basis.
Regulatory provisions can significantly affect employer costs and workforce compensation.
Well-structured challenges can reshape regulatory frameworks.
Judicial decisions can have wide-ranging implications across industries.
A leading public sector bank engaged the Firm for advisory and representation in multiple labour and employment law matters. The engagement involved complex litigation, including issues relating to statutory liabilities under the Employees’ Provident Funds and Miscellaneous Provisions Act.
We provided strategic legal support across advisory and litigation matters. Our approach included:
The engagement enabled the client to:
Effective handling across tribunals and courts ensures consistency in legal strategy.
Deep understanding of labour laws is critical in managing regulatory liabilities.
Coordinated advisory strengthens outcomes in complex disputes.
Ongoing support enables proactive management of legal risks.
An Indian IT services provider engaged the Firm for long-term advisory on structuring its organisation to align with its business model, improve operational efficiency, and meet labour law requirements. The engagement evolved to include restructuring of operations and subsequent merger-related integration.
We provided ongoing strategic and legal support across multiple phases of the engagement. Our approach included:
The client successfully achieved:
Continuous engagement enables alignment with evolving business requirements.
Legal frameworks must support operational efficiency and scalability.
Structured approach ensures smooth restructuring and integration.
Combining legal expertise with business understanding drives effective outcomes.
A multinational motor vehicle manufacturing group engaged the Firm for ongoing advisory on labour and employment matters across its operations. The engagement involved complex workforce issues, including union negotiations, wage settlements, and integration challenges arising from mergers.
We provided continuous legal and strategic support across a wide range of matters. Our approach included:
The long-standing engagement enabled the client to:
Sustained engagement enables consistent and strategic decision-making.
Effective handling of unions and settlements is key to operational stability.
Careful planning ensures smooth integration during mergers.
Integrated advisory across multiple areas strengthens overall workforce governance.
A leading India-based multinational software company engaged the Firm for ongoing advisory and representation on a wide range of labour and employment matters. The engagement spans complex workforce issues, regulatory requirements, and evolving legal frameworks.
We provided continuous, strategic support across advisory and litigation matters. Our approach included:
The long-standing engagement has enabled the client to:
Ongoing advisory ensures consistency and proactive issue resolution.
Handling advisory and litigation together strengthens overall outcomes.
Regular guidance supports compliance with changing regulatory frameworks.
Sustained engagement builds trust and strengthens organisational resilience.
A leading automobile manufacturer engaged the Firm to conduct recurring annual labour law compliance audits at its large-scale manufacturing facility in Karnataka. The audits required detailed on-ground assessments of operations, contractor practices, and adherence to statutory obligations under key labour laws.
We conducted comprehensive, technology-enabled audits combining physical inspections with structured analysis. Our approach included:
The client benefited from a robust and evolving compliance framework with:
Regular audits help identify gaps early and reduce long-term risks.
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Comprehensive reviews across contractors and operations ensure holistic compliance.
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The client, a leading public sector defence manufacturer with operations across multiple locations in India, undertook the transition to the new Labour Codes. The complexity was heightened by varying state-specific requirements and existing union settlements across different units.
We provided comprehensive advisory on implementing the Labour Codes across the client’s nationwide operations. Our approach included:
The client successfully transitioned to the new framework with:
Large-scale operations require tailored strategies across jurisdictions.
Alignment with union settlements is critical for smooth implementation.
Phased and well-planned execution ensures operational continuity.
Standardisation across units strengthens long-term governance.
The client faced a civil suit filed by an employee seeking an injunction against termination following disciplinary proceedings, along with claims for damages. Parallel proceedings were also initiated before the Labour Department seeking reinstatement and related reliefs, creating a multi-forum legal challenge.
We advised the client on a coordinated legal strategy across all proceedings. Our approach included:
The matter was successfully resolved with:
Coordinated approach across civil and labour proceedings is critical for consistency.
Clear legal strategy helps mitigate risks in employment disputes.
Handling parallel proceedings ensures controlled and aligned outcomes.
Well-planned defence can lead to early and favourable closure of disputes.
The client undertook a restructuring of its group operations in India, involving the transfer of employees across multiple entities within the organisation. The process required careful evaluation of legal feasibility across different employee categories, along with alignment to employment contracts and statutory requirements.
We advised the client on the end-to-end employee transfer process as part of the restructuring exercise. Our approach included:
The client successfully implemented the restructuring with:
Evaluating employee categories and contractual terms is critical for smooth transfers.
A step-by-step approach ensures clarity and reduces execution risks.
Alignment with legal requirements is essential for sustainable restructuring.
Well-prepared documentation supports seamless execution and future scalability.
Our client, a leading pharmaceutical manufacturer, undertook the closure of a manufacturing facility in Bengaluru. The situation was complex, as the closure coincided with ongoing wage negotiations with the workers’ union, creating potential risks of industrial unrest and operational disruption.
We provided end-to-end advisory throughout the closure process, guiding the client at every stage. Our approach included:
The client successfully executed the closure with:
Careful planning is critical when closure overlaps with union negotiations.
Well-structured VRS and negotiation strategies help achieve amicable outcomes.
Proactive legal guidance minimises the risk of industrial unrest.
A structured and empathetic approach ensures fair outcomes for all stakeholders.
The Government of India consolidated 29 labour legislations into four Labour Codes, operational from November 2025. These reforms significantly impact the entire employment lifecycle, requiring organisations to realign wage structures and policies to avoid financial and regulatory exposure.
We supported organisations across India in navigating this transition, while also contributing to the drafting of Rules under the Labour Codes with the Government of Karnataka. Our approach included:
We have successfully advised over 70 organisations, ranging from 60 to 50,000+ employees, resulting in:
The Labour Codes affect all aspects of the employment lifecycle.
Proactive restructuring helps manage financial implications effectively.
Solutions must adapt to organisations of different sizes and complexities.
Deep understanding of legacy laws and new frameworks enables clear, outcome-focused solutions.