What an Indian employer actually needs in writing
| Policy | Why it exists |
|---|---|
| Prevention of sexual harassment | Required for covered workplaces, along with a constituted internal committee, display of the mechanism and an annual report |
| Standing orders or service rules | Required, and certified, for establishments to which the standing orders provisions apply |
| Leave | Entitlement, accrual, carry-forward, encashment and application process, sitting above the statutory floor |
| Attendance and working hours | Hours, overtime, shift rules and regularisation, which support the wage computation |
| Disciplinary and grievance | The process followed before any action, which is what a challenged termination is judged against |
| Maternity and other statutory leave | Entitlement, notification, and the return to work position |
| Data and acceptable use | Employee data handling, monitoring and system access |
| Travel, reimbursement and advances | Limits and approval, which interact with the tax treatment of reimbursements |
The first two rows are the ones organisations most often get wrong, in opposite directions: the harassment policy exists as a document without a properly constituted committee, and standing orders are assumed to be covered by an employee handbook when the establishment actually requires certified ones. Verify the applicability thresholds for standing orders under the Industrial Relations Code, 2020 and the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 before assuming a handbook is sufficient.
How a policy acquires force
The common assumption is that a policy binds employees and binds the employer to nothing. Neither half is reliably true.
- A policy referenced in the appointment letter is generally incorporated into the contract, which cuts both ways.
- A benefit granted consistently over time can become a term by practice even where the policy reserves discretion, and withdrawing it then becomes a change to terms rather than a management decision.
- Where certified standing orders apply, they prevail over an inconsistent internal policy, and the certified text is what an authority will look at.
- A policy an employee never received is hard to enforce against them. Circulating by email and recording acknowledgement is not administrative fussiness; it is what makes the policy usable in a disciplinary process.
- A policy that contradicts the appointment letter will usually lose to it, so the two documents need to be read together rather than drafted by different people at different times.
- A discretion reserved in a policy has to be exercised reasonably and consistently. Discretion applied differently to two similar cases is the fact pattern most grievances are built on.
Writing one people can follow
- Say who it applies to, explicitly. Whether it covers fixed term employees, contractor workers and consultants is the first question anyone will ask and the one most policies leave unanswered.
- State the process, the decision maker and the timeline. A policy that describes intent without saying who decides and by when is a statement of values.
- Write it in the language people read. A workforce that does not read English cannot be governed by an English handbook, and the translated version has to be the one that is circulated rather than one that exists on request.
- Keep it shorter than the temptation. A forty page handbook is read by nobody, and its length is often used to hide the absence of decisions.
- Date it and version it, and keep the superseded versions. Conduct is judged against the policy in force at the time, which means you must be able to produce that version.
- Say what happens on breach, and then apply it consistently. Selective enforcement is worse than no policy, because it establishes that the rule is negotiable.
Changing a policy
Policy changes are usually announced by email and treated as complete. Where the policy touches conditions of service, that is not enough.
- Identify whether the change reduces an existing entitlement. Adding a process step is different from reducing leave, changing notice periods or withdrawing an allowance.
- Where certified standing orders cover the subject, changing the position requires the modification process for standing orders rather than an internal circular.
- Where the change alters conditions of service for workers, notice requirements may apply before it takes effect, and these are not satisfied by an announcement.
- Do not apply changes retrospectively. A leave rule changed in October cannot govern leave already accrued under the previous rule without dealing with what has accrued.
- Record acknowledgement again. Acknowledgement of the previous version does not carry forward.
- Communicate the reason. Policy changes made without explanation are read as cost reduction, correctly often enough that silence does the damage anyway.
Any policy change that reduces an entitlement should wait until two things have been checked against the Industrial Relations Code, 2020: the notice requirements for a change in conditions of service, and the modification procedure for standing orders.
What the Industrial Relations Code, 2020 replaced
3 enactments stand repealed under s. 104, in force 21 November 2025.
- Trade Unions Act, 1926
- Industrial Employment (Standing Orders) Act, 1946
- Industrial Disputes Act, 1947
Across all four labour Codes, 29 enactments stand repealed. A policy or handbook that still cites one of them by name is describing rules that no longer exist.
Statutory reference
- Act
- Industrial Relations Code, 2020
- Section
- Industrial Relations Code, 2020: standing orders, including the establishments to which the provisions apply, certification, the effect of certified standing orders over inconsistent internal rules, the procedure for modification, and the twenty-one day notice requirement at section 40 before effecting a change in conditions of service in respect of a Third Schedule matter. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013: Section 4, constituting an Internal Committee, and at every administrative unit or office where these are at different places; Section 19, the duties of every employer with no size threshold, including displaying the penal consequences and the constitution order, running awareness workshops at regular intervals, and treating sexual harassment as misconduct under the service rules; and Sections 21 and 22, the annual report to the employer and the District Officer. Only the Committee obligation is relieved below ten workers, by implication from Section 6(1); the Section 19 duties are not. Code on Wages, 2019 and Code on Social Security, 2020: statutory floors for wages, leave and benefits, beneath which a policy cannot go. Occupational Safety, Health and Working Conditions Code, 2020 and state shops and establishments legislation: working hours, leave and workplace requirements. Codes in force 21 November 2025
- Key limits
- A policy cannot reduce a statutory entitlement, and where certified standing orders apply they prevail over an inconsistent internal policy. Reducing conditions of service may require notice before the change takes effect, and a benefit granted consistently can become a term by practice. Verify the standing orders applicability and modification procedure, the notice requirements for changes in conditions of service, and the internal committee obligations before issuing or amending policies. The statutory periods are three months to complain, extendable by three, ninety days to complete the inquiry, ten days for the report and sixty days for the employer to act.
Frequently asked questions
Which policies are compulsory in India?
A prevention of sexual harassment policy with a properly constituted internal committee is required for covered workplaces, and certified standing orders are required for establishments to which those provisions apply. Others, such as leave and disciplinary policies, are practically necessary because they are what a dispute is judged against.
Is a policy part of the employment contract?
Often, yes. A policy referenced in the appointment letter is generally incorporated, and a benefit granted consistently over time can become a term by practice even where the policy reserves discretion.
Can we change a policy whenever we want?
Not where it reduces an existing entitlement. Changes to conditions of service may require notice before taking effect, and where certified standing orders cover the subject the modification procedure applies rather than an internal circular.
Do employees have to acknowledge policies?
For the policy to be enforceable against them in practice, yes. Record who received which version and when, and take acknowledgement again after each revision, because acknowledgement of the earlier version does not carry forward.
What if the policy contradicts the appointment letter?
The appointment letter will usually prevail, which is why the two should be drafted to be read together. Most policy disputes start as a contradiction between a handbook written by HR and a letter issued years earlier.
How Engage distributes policy
Engage circulates policies to the people in scope and records who acknowledged which version and when, so a disciplinary process is not answered with a claim that the rule was never received. Superseded versions are retained with their effective dates, which is what conduct is judged against when the policy has changed since.
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