Introduction

Human resources (HR) management and resolution of employee-related issues are central to the successful functioning of any organization in India’s often chaotic labour market. The scope of activities ranges from ensuring solid structured frameworks for the recruitment of suitable talents to compliance with myriad labour laws to managing employer-employee relations and navigating extensive regulations for management of their workforce, business requirements to ensure they are in compliance with applicable labour laws. This is where a retained external General Counsel (GC) can play a crucial role in the smooth functioning of an organisation. Navigating the complexity of Indian labour laws and addressing the growing need for efficient and cost-effective legal support, an outsourced GC offers essential assistance for HR departments in companies to managing legal risks and ensuring smooth functioning of their day-to-day operations.

What is a General Counsel Retainer?

A General Counsel retainer refers to an arrangement wherein an organisation engages an external law firm to provide ongoing, reliable legal advice to the organisation in accordance with a pre-determined payment term. Unlike in the case of hiring a full-time in-house legal counsel, a retainer model allows organisations to access expert legal guidance without the significant costs associated in the event of the engagement of an in-house counsel.

In the context of human resources and employment matters, a GC retainer ensures organisations have access to a specialist legal advisor for managing legal risks and providing advice on various aspects of Indian employment laws. The external GC can assist with a wide range of employment issues, from undertaking compliance as required under labour and employment legislations to managing employee disputes and ensuring legal compliance in the employment policies of a company.

Key labour laws in India include:

General Counsel supports risk mitigation in the following manner:

Employee Training and Education

Another important role that a General Counsel is often required to play in employment matters is in training employees and managers of a company on their rights and responsibilities under labour laws mainly pertaining to registration of establishments, hiring and termination of workforce, prevention of sexual harassment in the workplace, prevention of discrimination in hiring and management of personnel. General Counsels are often required to design and deliver employee training programs that help the organization stay compliant with laws and create a more conducive work environment while ensuring that the commercial goals of the employer are being met. One such examples is educating employees and management on the provisions and frameworks as provided under the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013 (“POSH Act”). General Counsels further work towards providing employers and employees an understanding on how to prevent, report, and address incidents of sexual harassment. Furthermore, a GC can help businesses create mandatory frameworks as required under labour laws such as the POSH Act for preventing and addressing sexual harassment in the workplace.

Cost-Effective Legal Support

For many small and medium-sized businesses in India, having a full-time legal team dedicated to HR and employment matters may not be financially viable. In such cases, engaging a General Counsel from a third-party law firm on retainer offers a cost-effective method of managing employment issues. An external GC on a retainer provides companies with regular legal support at a predictable cost, allowing companies to manage their employment and labour related issues more efficiently than if they were to hire an internal legal team or engage external lawyers on a case-by-case basis.

Moreover, a General Counsel’s ongoing advice aims to help businesses avoid costly litigation and fines from labour departments due to lapses and complaints made by stakeholders, which can significantly reduce overall legal expenses.

Conclusion

In the context of Indian laws, a General Counsel engaged from a law firm is an invaluable resource for companies, providing consistent legal advice and support on a range of employment-related issues. By ensuring compliance with labour laws, helping with risk mitigation, facilitating employee training, and guiding strategic decisions, a General Counsel helps companies and businesses manage their legal responsibilities while protecting them from costly disputes and penalties. With the landscape of Indian employment laws requiring a definitive mechanism to ensure oversight and compliance, having a trusted General Counsel on a retainer basis is a clear necessity for companies seeking to ensure legal compliance and smoother employment and labour management as part of optimum business operations.

Author: Ms. Khyati Bhatia, Senior Associate at Ahlawat & Associates