Legal Advice on Employment Documentation and Human Resource (HR) Policies for Foreign Corporations-Clothing & Apparel Industry: Best FDI Attorney in India

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“Employment documents are very important document for any foreign investor or foreign corporation as the same decides the actual function of the people working in the corporation. Further, these documents should be carefully prepared while duly taking into consideration the employment laws of India or the labour laws of India. These documents need expert legal vetting and draftsmanship. “

Introduction
Foreign investors are more inclined to invest in nations with strong competitiveness metrics, including human resource competence, natural resource endowment, market possibilities, and per capita incomes. Because future high-growth industries, like information systems and biotechnology, will demand an increasingly competent workforce, governments must continue investing in their human resources. Some the measures taken to ensure the human resources in a company is by entering into contracts such as appointment letters, offer letter, letter of intent, indemnity bond etc.

Appointment Letter
An appointment letter serves as a type of documented proof of employment for employees, particularly those in the unregulated industry. There is currently no single legislation that mandates the issue of appointment letters. However, some jurisdictions have regulations requiring the job details to be included in the appointment letter. This would make it easier for individuals to assert their rights and receive the benefits they are entitled to. The employer would be forced to disclose facts such as pay, working time, number of leave given in a year, and so on in a regulated form in the appointment letter, according to the plan, which is part of the law.

Letter of Intent
A letter of intent typically reflects a party’s desire to engage into a contract with another party in the future, according to well-established legal principles. A letter of intent is just not meant to obligate either party to engage into a contract in the future. If a letter of intent and any other contractual instrument clearly states that no contractual responsibilities will be formed between the parties, it is assumed that no legal and binding contract will be formed.

Indemnity Bonds, Affidavits & other Allied Documents
Employers utilise a variety of strategies to protect themselves against harm caused by their workers’ actions. Employers commonly utilise tactics such as requiring an employee to sign an indemnification bond, include adverse restrictions in the employment agreement, and enforcing confidentiality agreements to safeguard against employee turnover. By signing the bond, the employee pledges to work for the company for a set period of time. By submitting his resignation, the employee may quit the employer’s employment sooner, but he must reimburse the company in the sum stated in the bond.

Compliances with respect to Industrial Dispute Act of 1947
Policies controlling dispute settlement are an important aspect of each country’s labour law system, regardless of its economic growth. This is because complaints and disagreements are unavoidable in any professional relationship, and the goal of policy is to provide means for efficiently and quickly resolving these issues. The Industrial Disputes Act of 1947 is the major piece of law in India that governs dispute settlement. It was passed to enable for the investigation and resolution of labour conflicts, to combat illegal strikes and lockdowns, and to offer redress to workers during layoffs, retrenchments, or unfair dismissals. It also includes systems for mediation, arbitration, and adjudication in order to promote actions that benefit both companies and employees.

Labour Cost and Productivity
One area of particular importance with respect to FDI is productivity and labour costs. Foreign investors will invariably select countries with low labour costs. FDI has resulted in a wholesale movement of labor-intensive product and export manufacturing from high-wage nations to low-wage ones. In terms of human resources, competitiveness will be determined by the level of current human capital investment, which will, in turn, supply the economy with a sufficient and adequately skilled workforce. As a result, in order for a country to develop quickly, it must boost both of its wage rate and productivity. It is true that competitiveness requires an economy to keep producing more commodities for global markets as wages rise and labour-intensive exercises are upgraded to generate higher products that yield higher value-added industries.

If the foreign investor or the foreign corporation fail to draft and execute proper employment documents then the same shall attract huge penalties as per the Indian laws. Further, proper advise should be taken from a corporate lawyer who works as an FDI attorney in India and the documents should be drafted, prepared and vetted.

Conclusion
Companies also rely heavily on host nations’ FDI policies to increase employment, improve employment quality, and build human resource skills, as well as to mitigate any negative consequences that FDI may have had in these areas. Human resources are a country’s most valuable asset, and all businesses require them. However, without expenditures in building the utilization to acquire skills, gain knowledge, and innovate, human resources will have a limited ability to attract commercial investment. Human resource development, in general, promotes civil rights, political stability, better population health, and decreased crime and corruption, all of which help to advance economic growth and attract inbound FDI.
Authored By: Adv. Anant Sharma & Afsana Khan