Work From Home: Understanding The Gaps In India’s Regulatory Framework

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Work From Home: Understanding The Gaps In India’s Regulatory Framework

May 18, 2021

Every economic shock leaves behind a legacy, and the Covid outbreak is not an exception to it. The Covid outbreak has provided the entire world with an opportunity to experiment globally with the concept of remote working and digital transformation. Traditional work-operations are slowly being replaced with automation and digitalization. Further, information and communication technologies (“ICTs”), and growing digital labour platforms have accelerated the uptake of non-traditional work arrangements. Interestingly, the work from home (“WFH”) phenomenon, causing many around the globe to make home their office, sped up this replacement, accelerating digital transformation. The International Labour Organization (“ILO”) has given its view that the pandemic has initiated an “unprecedented experiment in working from home”, predicting that results of the “great working from home experiment” would unfold in the coming years.

Understanding the current situation, where WFH is the future, developing a coherent regulatory framework on WFH is now crucial, since majority of the organizations rolled out WFH during the national lock down.

As the new trend of WFH dawns and evolves into more mature telecommuting models, India’s legacy Labour laws and proposed Labour Codes stay silent on the subject. These legal regimes do not recognize work from home as a viable work arrangement. Although this transition seems a viable arrangement for the short run, it is anticipated to cause serious issues for both the employer and the employee in the longer run.

I. Position of WFH under labour laws:

WFH is a very familiar concept in other developing countries and these developing countries have specific laws dealing with the rights and duties of employer and employees while working remotely. On the other hand, as far as Indian labour laws are concerned, although there have been some recent developments under labour codes under which an attempt has been made to endorse WFH and its definitions. however, they do not specifically recognize this ‘new normal’ as a legal setup to work. It is now a common knowledge that WFH is becoming a significant part of the labour sector and part of life and therefore, the Indian labour laws need significant amendments to recognize WFH and terms and conditions thereof.

A. The developments under the said labour codes are as follows:

1. Draft Model Standing Orders for Service Sector, 2020 (“DMSO”): This DMSA is applicable to the employer having more than 300 workers. This Draft model permits an employer to allow employees to work from home on the basis of condition discussed between both of them. However, even DMSO cannot be termed as having any enforcement capabilities as this does not define the WFH and the underlying regulations for it. Further, DMSO may cause a lot of problems in terms of implementations when it would interact with the different state laws having different labour codes.

2. Code on Social Security 2020 (“CSS”): CSS defines home-based work as the work which is carried out at the home of employees, and further permits the women availing maternity benefit to work from home , however, CSS does not encompass the definition of Work from home and therefore, it is important to define international accepted concepts such as “remote work”, “telework”, “work at home” and “information and communications technology” and bring more facets and terms with regard to WFH.

It may be noted that ILO defines “telework” as a subcategory of “remote work”, even though both are carried out outside the default workplace. Further, “Work at home”, while being independent of the default workplace, may overlap with “home-based work” defined under CSS, wherein work is carried out at the worker’s home. Then, the concept of “wage worker” under CSS includes “home-based worker”, both of which are subsets of “unorganized worker” under CSS. Such definitional overlaps are undesirable, more so because different social security schemes are available under CSS, depending on the particular category of worker.

3. Occupational Safety, Health and Working Conditions Code, 2020 (“OSH Code”): Earlier, the organizations were obligated to maintain registers under different labour codes in prescribed forms, however, it was silent with regard to the mode of maintenance of registers and organizations used to maintain such registers in physical forms, however, the OSH Code explicitly permits the organizations to maintain the said registers in electronic form .

However, it is very important to broaden the definition of “Establishment”. OSH Code defines “Establishment” as a place employing workers, connoting a physical space where work takes place. Any other place is not an establishment; hence questions of occupational safety and health of workers working outside a physical establishment arise. The definition of “Establishment”, with WFH becoming the new normal, the concept of “Establishment” may need broadening, to sufficiently accommodate occupational safety and health of workers working from home.

II. Challenges in Work from home:

1. Maintenance of Statutory Records: The various labour laws in India require numerous compliances and records which need to be maintained by the employer. But the problem with these laws is that these laws assume that work can be carried out only from the ‘establishment’ or from the ‘workplace’, and does not account for the WFH culture. Therefore, the labour laws need to be designed in a way that it simplifies the maintenance of employees records for statutory purposes.

2. Implementation of Wage Codes and other labour laws: Owing to WFH an employee may work even from a different state although the company is situated in a different state. However, the minimum wages and working hours differ from state to state. This is the crux of the problem, that in the absence of any central or state law which recognizes WFH, it would be highly challenging to identify as to the laws of which state would govern the employee: The state of the company or the state laws of employee? This question should be clearly answered through laws.

3. Health and Safety of workers at Home: The employer is liable to ensure the safety of its employees within the premises of the workplace. But what about the liability of the employer when an employee is working remotely from his/her home and is out of control of the employer? Whether the employer would be liable under POSH Act and Vishaka guideline, if a sexual offence is committed, even though the employee is at his/her home? The logical answer would be that the liabilities cannot be stretched too far as the employee is not in the space managed by the employer.

4. Facilities provided to the employee: Work from home brings a lot of financial burdens along with it. The cost includes buying equipment, internet connectivity, safety equipment, maintaining screen timing, etc. Most of the Companies are incurring the cost of all such equipment, but imposing such responsibility on companies would add huge financial losses to the overburdened financial status of the company due to the pandemic. The other possible approach could be cutting the transportation cost and other facilities cost and converting it to furnish the equipment to the employees.
While many more such possible challenges would arise with the advent of time, the lawmakers should ensure that such disputes are resolved and a quick solution is arrived at by enacting a law that encompasses WFH and its regulatory frameworks.

III. Internationally accepted WFH practices which may be adopted:

The Covid has led to change in the work structure of the employment sector, consequently, virtual workplaces are being embraced. ILO on January 2021, released a report titled Working from home: From invisibility to decent work, addressing the concerns related to working from home. This report emphasized the role of the Government in playing a major role in protecting the WFH workers. The report made strong recommendations of adopting policies into the national legislation as early as possible. The important feature of this report is that it recommends a gender-responsive legal framework that aims at providing equal treatment to all categories of WFH workers. The report called for better compliance, legal protection, occupational safety and social security for industrial home-based workers. Most importantly it recommends the ‘right to disconnect’ to a teleworker to ensure that he/she is not over-utilized without paying and it also ensures that a boundary is maintained between work life and personal life.

The internationally accepted term for the nature of WFH prevalent in India since March 2020, i.e., “Telework” is absent from guidelines or notifications etc. issued by the Government regarding WFH. Telework is broadly defined as the use of ICTs like smartphones, tablets and laptops/desktops, to perform work beyond the employer’s premises. One of its earliest legal references appears in Californian law from 1995 framed to encourage “telecommuting”, i.e., substituting commute to work with computers and telecommunication technology, by state employees. The EU, too, in 2002 introduced a Framework Agreement on Telework delineating a general framework balancing employer and employee interests as well as personal – professional life balance. Teleworking has been recognised vide ILO Convention No. 177 on “home-work” aimed at promoting equal treatment between home-workers and other workers. Teleworking as a permanent arrangement, whether full-time or part-time—and not alternating with office-based work was covered under “home-work” set out in the Convention. India, however, has not ratified this Convention.

In September 2020, Spain enforced legislation clearly defining ‘telework’ and ‘work from home’. Spain has clearly defined whom the law shall apply and the obligations of the employer and employees. Further, Finland has amended its laws clearly laying down the number of work hours and relevant arrangements. On the other hand, United Kingdom, Australia, and New Zealand have made an approach to flexible work is predicated on three main pillars viz. qualifying employees proposing changes in relation to hours, time and location of work; an employer’s duty to consider such application in a “reasonable manner” with refusal only on pre-specified grounds (such as additional costs and inability to re-organise work amongst existing employees); and escalation to employment tribunals by employees, in limited circumstances.

IV. Conclusion:

The outbreak of Covid has changed the dimension of the labour environment and the working style. While the technology has consummated the work environment altogether and replaced the physical officers with virtual offices, it is vital that the government comes up with clearly defined orders/legislations/amendments recognizing ‘work from home’ or ‘work from anywhere’ and associated terms and conditions such as flexible work timings, payment of wages, etc.

Author: Prashant Jain, Co-Founder & Partner and Abhishek Gupta, Senior Associate.

Disclaimer: The content of this article is intended to provide a general guide to the subject matter and that the same shall not be treated as legal advice. For any queries, the author can be reached at,

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