For Work From Home To Continue Beyond COVID, The Regulatory Framework Must Change


While most of the surveys conducted in the last few months confirmed that more than 70 percent of employees and companies would prefer to work from home even post-pandemic situation, the question is whether India has the right regulatory framework to enable work from home in the coming times?

Over the last few years, we saw a massive attempt by central and state governments to overhaul various legislations such as the tax laws, the Company laws, and the insolvency laws. The latest ones in the list are the new Labour Codes.

While the government tried to simplify existing regulations, introduce uniform definitions, and cover certain new-age working class such as ‘gig workers’ and ‘fixed-term employees’ under the realm of labour regulations, there are no regulations to provide specific rights to employees who work from home.

The following four major considerations may have to be reviewed in 2021 from a regulatory and compliance perspective for enabling ‘work from home’.

Will ‘employee’s home’ be considered as an extended worksite?

The existing regulations in India and the proposed Labour Codes do not categorically include ‘employee’s home’ as an ‘extended worksite’ and that will continue to be a challenge. The regulatory framework and courts’ decisions in some overseas jurisdictions have considered employee’s home as an ‘extended worksite’ and provided for overtime compensation and other allowances, during an employee’s work from home. Further, some overseas jurisdictions have also held employers liable for employee’s physical or mental injuries/ harassment while working from home.

While in India, we have not seen much employee activism for claiming their working time rights, recovering back wages or damages towards safety or harassment, it may not be a distant reality when Indian employers will see such employee activism in light of enhanced coverage of employees under the proposed Labour Codes. Apart from labour laws, there are various other compliance risks that may need to be considered as organizations may not have registered offices in all the cities from where employees may be working remotely and also have restrictions due to licensing requirements under SEZ and STP set up.

Will monitoring of employee’s activities while working from home through a webcam or other means be considered as an invasion of personal privacy?

As we enter the year 2021, this is one of the evolving subjects across jurisdictions with limited guidance available from authorities, particularly in India. Most companies moved employees and IT assets to their homes to enable remote working and some companies are exploring various productivity monitoring tools and surveillance on employees during working hours for managing disguised absenteeism.

Hence, there is a need to define the regulatory framework within which an employer’s right to supervise and employee’s right to privacy is protected without imposing onerous and economically unviable measures on employers.

Will health and safety measures at an employee’s home be the responsibility of an employer? 

While the new occupational, safety, health and working condition code failed to address the remote working situation, in theory, health and safety measures at the home office of employees will be the employer’s responsibility. In a country like India where there are space constraints and there is no total compliance with respect to fire and other safety measures, this can be a huge burden and nightmare for regulators to enforce compliance, and for employers to manage them.

Further, harassment caused to employees at home during work hours may be considered as vicarious liability for the employer despite not having adequate controls over the physical premises and infrastructure at an employee’s home.

Will companies be in breach of contract / licensing conditions with their clients or regulatory authorities where they have agreed to a specific location of service or business in India?

India is one of the major offshore centres for large companies across the globe. One of the critical contractual requirements will be to secure client data and information within secured delivery centres. Under the pandemic situation, most of the companies can invoke the force majeure clause in agreements to get a waiver of conditions attached to the service offering. However, under a business as usual situation, global clients may not agree to such material changes. Hence, it will be important to review such conditions precedent to service contracts, else it will be a challenge going forward as well.

In order to embrace the new normal of ‘working from home’, governments and regulators need to align regulatory frameworks for enabling new ways of working. This will help in overcoming issues such as a burdened judiciary to interpret the intention of current law, dissatisfied employees, and unviable commercial establishments.

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