Legal Rights of an Employer in India

Legal Rights of an Employer in India

This article on ‘Legal Rights of an Employer in India‘ was written by Aditya Sen, an intern at Legal Upanishad.


The rights of an employer and an employee who works in the public, private, and unorganized sectors are protected by India’s employment laws. During the course of work, both “employers and employees” have various rights and responsibilities toward one another. They may go to court over any infringement on these rights or failing to respect any obligations. The employment agreement is the cornerstone of every employment situation or employer-employee relationship. The employment agreement also grants employee rights India, employer rights India, and employment rights India in addition to statutory rights.

Employment rights are the most frequently discussed topic in India and their protection, but we frequently overlook the rights of an employer. All Indian employers, including the largest ones, have been given certain privileges. “The question which now arises is what is the employer’s right and how can rights of an employer be protected against violation.

Employment rights in India have been provided under various employment laws such as the Industrial Disputes Act, the Shops and Establishments Act, etc. In this article, we will discuss some of the rights available to employers under the legislative framework of India.

Rights of an Employer

Just like there are certain fundamental duties and rights given to all employees in India, irrespective of them working in the private or public sectors, all employers in India are also entitled to certain rights. Following are the top 5 rights among the employer rights in India”:

  1. “Right to Hire or Fire”:

A firm in India has every right and obligation to hire the best person for their needs under the terms of the right to employment in India. One of an employer’s rights is to choose the candidate who best matches the job description based on that individual’s credentials, expertise, and experience. However, an employer cannot discriminate against candidates based on their “caste, religion, gender, or age”.

“Employer rights in India” additionally state that a corporation has the unrestricted right to terminate a worker for failing to follow the firm’s vision, acting inappropriately among co-workers or superiors, breaking corporate rules, or performing below expectations. To properly terminate an employee in India and safeguard the business from unwarranted legal problems, the employer must adhere to all applicable legal requirements. The best employment lawyers can assist the employer in handling all legal facets of the procedure.

The ability to terminate an employee’s job also includes the ability to suspend, dismiss, or transfer them. If the employer believes that an employee will not be able to adjust at one office location for any reason, he or she may be transferred to another department within the same office or to a different city or state. An employee is often suspended if a complaint has been filed against them and they are the subject of an ongoing inquiry. However, the employer is free to use his in-country working privileges whenever he sees it appropriate.

  1. “Right to confidentiality/non-disclosure”:

In India, employers have the right to keep trade secrets and customer information private. An employer may do this by having its staff sign a non-disclosure agreement (NDA). Because not only employers but also workers, particularly “senior and middle management of a firm”, have access to customer information and trade secrets.

The employee has a responsibility to utilize the confidential information of the customer and the business to perform their duties and to prevent disclosure of this information to a third party. This obligation endures after the employee quits their work and goes beyond the scope of their employment. The NDA can be created by hiring top labour attorneys.

The NDA is not for a certain amount of time. Even after the employee has stopped working for the company for the duration specified in the contract that was signed between the employer and employee in this respect, the business may still require that the employee abides by the NDA.

The employer is entitled to defend the company’s “Intellectual property rights (IPR)” from any type of employee violation. Employees must also sign a non-compete and non-solicitation agreement, which was created by employment lawyers and forbids them from using the firm’s intellectual property (IPR) without authorization. They are also prohibited from engaging in a comparable trade or soliciting clients for the company.

Legal Rights of an Employer in India
Legal Rights of an Employer in India
  1. “Right to implement a Work Policy”:

The freedom to create and implement a work/HR policy by the needs of the organization is another benefit of Indian employer rights. In the working policy, an employer might specify the employee behavior code, working hours, timings, leave policies, wage policies, circumstances for termination and resignation, harassment policies, and grievance redressal procedures. With the help of employment advocates, the company’s HR policies may be written.

Each employee has a responsibility to follow the guidelines outlined “in this company manual, and the employer” has the authority to terminate an employee’s employment if they don’t. The rules created by the employer must adhere to the employment and labour laws that are relevant to a certain kind of organization.

“Other than the normal HR policies relating to salary, harassment, leaves of employees, etc. employment rights in India allow employers to control the method of doing work, working hours of the company. Also, the employer has the authority to decide the wages and remuneration of the employees at different levels, their promotions, and their appraisal strategy. Unless and until the policy made by the employer is vague, unfair, against the law, or discriminatory based on sex, caste, religion, or creed the policies of the employer cannot be questioned.

However, it is to be kept in mind that the maternity leave provided to female employees is not discrimination between employees as the provision of maternity leave is given by the law, and giving maternity leave is mandatory compliance once leave application for maternity leave has been applied by the female employee”.

  1. “Right to receive notice of resignation”:

In India, an employer has the right to get a resignation letter before an employee departs the organization. Before quitting, the employee must serve a notice period to provide the employer enough time to find a successor. Depending on the company’s HR policy, the notice time often runs from one week to one month. With the assistance of the best labour attorneys, the employer may, if the employee resigns without giving a required notice period, legally notify the employee.

One thing that should be taken into account is that an employee is not required to serve the notice if the employment agreement does not specify that the employee must do so. Additionally, some employment contracts that stipulate that an employee must serve a notice period also include a provision that allows the employee to pay their salary in lieu of the notice period if they are unable to do so.

For example, if the notice period is one month and the employee resigns abruptly, the employer may withhold the employee’s salary for one month.

  1. “Right to be notified of employee’s leave”:

“Employer rights in India entitle an employer to the right to be notified before the employer takes a leave from the office. The employer also has the right to reject or approve the leave application of an employee. An employer can reject the leave application if the employee constantly absents them from office, fails to perform their duties, or take leaves without any substantial reason.”

“The employer has the right to deduct an employee’s salary for every unpaid leave taken, and even terminate the employment if an employee remains absent from office without prior notification.”

“An employer can initiate legal action with the help of labour advocates, against an employee who violates any of these rights. The employer can file a case in a civil court or Labour Court against an employee who fails to perform their duties and acts against an employer’s interest.”


In India, there are various laws that safeguard both employers’ rights and those of employees against exploitation and other wrongdoing. It is also believed that laws or rights for employers are essential for the effective operation and upkeep of a positive employer-employee relationship. Employees would have the potential to abuse their privileges if they were not restricted. NDA policies, workplace ethics, and the ability to hire and dismiss employees are just a few of the significant rights that employers have.