FAQs
Employment Law
Frequently asked questions about employment law in India — answered by Corpus Juris Legal.
Post-employment non-compete clauses are generally not enforceable in India under Section 27 of the Indian Contract Act 1872, which voids agreements in restraint of trade. Courts have consistently held that a clause preventing an employee from working for a competitor after leaving employment is an unenforceable restraint on trade. However, reasonable garden leave clauses (where the employee is paid for the notice period but not required to work) and narrowly drawn non-solicitation of customers/employees clauses have a stronger chance of enforcement, depending on the specific facts and the courts' analysis of reasonableness.
The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 (POSH Act) applies to every employer with 10 or more employees. "Employer" includes any private enterprise, organisation, or establishment. The obligation to constitute an Internal Committee (IC), formulate a POSH policy, and conduct annual awareness training applies from the moment the company has 10 or more employees. Employers in every state and district must also be aware of the Local Complaints Committee (LCC) established by the District Officer for employers with fewer than 10 employees.
The notice period requirement depends on the employment contract, applicable Standing Orders, and labour legislation. Most employment contracts specify 1-3 months' notice for senior employees and 30-60 days for others. Since 21 November 2025, the Industrial Relations Code 2020 — which replaced the Industrial Disputes Act and the Industrial Employment (Standing Orders) Act — governs workers: standing orders (mandatory for establishments with 300 or more workers) may prescribe notice periods, retrenchment requires one month's notice or wages in lieu, and establishments with 300 or more workers need prior government permission to retrench (the threshold was 100 under the old law). For managerial and other employees outside the definition of "worker", the notice period is primarily governed by the employment contract.