The Pandemic and Employment Contracts

The Pandemic and Employment Contracts

With the constant ebbing of employee protection given the changes in the workplace due to the pandemic, the linearity and stability of employment contracts are under a cloud.


Let us take a look at this scenario - You are currently employed with your enterprise and have an existing employment contract in your drawer. It has the standard references to employment tenure, place of posting, retirement age, compensation, allowances and perks etc. Now amidst this pandemic, you are grasping the changes in your workplace with policies being revised, colleagues being handed extra leaves, changes in insurance coverage and a few more on the anvil. A thought lingers in your mind on whether the employment contract handed by your current enterprise needs to be revised. Against this backdrop, the existing pandemic has raised a question mark on existing employment contracts and placed HR professionals in a quandary.


Aspects to consider


From furloughs to reduced working hours to reduced pay, enterprises across the world have implemented these measures mostly taking the employees by surprise. While HR policies and employment contracts have been framed to cater to normal working conditions, most enterprises have ringed in unilateral changes to adjust to the new normal of flexible and blended workplace model. This has amplified the underlying need to amend existing employment contracts and assure the employees that their rights would be safeguarded in the event of a pandemic.


For HR professionals and enterprises, there are a couple of considerations which need to be incorporated in the employment contracts. To begin with, employers need to draft rules and provisions for scenarios related to quarantine and lock-down in the contract. It should clearly spell out the dos and don’ts for the employees to navigate through these situations. The next consideration should be reserved for scenarios when employees fall sick due to the pandemic. The contracts must be transparent on the rules and categories that pertain to leaves and any additional allowances to be provided for the employees.


The detail is in the data


Given the Work-from-Home model, many enterprises have been striving to fetch real-time data on whether employees are putting in the required hours. Furthermore, safeguarding the enterprise and customer data while operating from home is paramount. There could be situations when other family members may be privy to confidential information or any matters related to the enterprise. Hence, from a go-forward perspective, employment contracts must mention the policy for handling these scenarios. Also, future employment contracts must clearly state the rules for furloughs and any reduction in salaries, keeping in mind the local and government regulations issued during the pandemic.


The need for attention


Enterprises need to pay attention and highlight any proposed revisions in working hours, job roles and contractual obligations. The employment contracts in the coming months must address any modifications in the salary structure and incorporate a detailed reference for layoffs. For example, there is no legal rule in India which states that employees need to be paid during lock-down. As per the Advisory by the Ministry of Labour & Employment, employers are advised against termination of employment in the event of a lockdown. The advisory also mentions that if any establishment is nonoperational, it must deem its employees on-duty. There is also a provision that if an employee is tested positive for COVID-19 after returning from an official trip, the organisation is obliged to provide 28 days of paid leave for quarantine and full recovery. In terms of meeting the statutory and labour laws in respective countries, the contracts need to clearly indicate any proposed changes to bonus pay-outs, incentives or discretionary allowances for the employees.


With the pandemic showing signs of having a longer run, enterprises need to revise employment contracts for fulltime, contingent, contractual and teleworking employees. A key element in the contract would be the Office Policy which should mention whether employees with symptoms of the virus or contracting the same in the workplace be relieved of duty till they recover fully. Similarly, contracts need to introduce Work-from-Home policy as well as address matters related to child care, elderly care, maternity, paternity, adoption and wellness with crisp guidelines. A consideration in the employment contracts must be reserved for return to work guidelines along with the mandated safety provisions like usage of masks, social distancing, maintaining personal hygiene etc.


As remote work morphs into the mainstream workforce management model, the contracts should incorporate clauses and policy related to disciplinary, harassment, code of conduct and performance management procedures. With many enterprises buying medical insurance for employees to ward off the pandemic, the contracts need to add a section on insurance with detailed guidelines for usage. Moreover, contracts need to be modified and customised keeping in mind the business needs and nature of jobs spanning across diverse sectors like Information Technology, manufacturing, automotive, financial, governmental etc.


With the constant ebbing of employee protection given the changes in the workplace due to the pandemic, the linearity and stability of employment contracts are under a cloud. For the employees who toil day in and out to sustain businesses against the pandemic the reinvented employment contracts would be much-needed succour.


Amarpreet Bhamra is a business process management professional with 20 years of work experience in organisations such as Ernst Young, AP Moller Maersk, Tech Mahindra Business Services, Synchrony Financial, TATA Business Support Services and GE Capital International Services. Amarpreet holds a double post graduate in Communications and English respectively. He has an Advanced Diploma in Financial Management from Indian School of Business Management and Administration.


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