INDIA Law and Practice Contributed by: Anshul Prakash, Kruthi N Murthy and Deeksha Malik, Khaitan & Co
4. Foreign Workers 4.1 Limitations on Foreign Workers
“sensitive personal data or information” is defined in the SPDI Rules to mean personal information which consists of information relating to: • passwords; • physical, physiological and mental health condi - tions; • financial information, such as bank account details; • sexual orientation; If the requested information falls within the purview of the SPDI Rules, consent from the employee would be required before the data is collected. Typically, such consent is taken at the commencement of employ - ment itself (through a consent clause in the employ - ment contract/company policy); even so, it is advis - able for employers to procure consent at the time of the collection and/or transfer of such protected infor - mation, so that an employee has an effective opportu - nity to withdraw consent, which is an opportunity that must be given to the employee under the SPDI Rules. Employers are also required to implement reasonable security practices and procedures in relation to the storage of SPDI. • medical records; and • biometric information. It should be noted that India recently enacted the Digital Personal Data Protection Act 2023 (the “DPDP Act”). The DPDP Act received the assent of the Presi - dent of India on 11 August 2023, although the provi - sions therein state that it would come into force on such date as the central government would notify. The DPDP Act widens the ambit of the data protec - tion regime in India by not only covering SPDI but also including within its purview any data about an individual who is identifiable by such data. The DPDP Act provides that a person (which would include an employer) may process the personal data of a data principal (who would be an employee in the context of an employer-employee relationship) for a law - ful purpose for which the data principal has given their consent, or for certain “legitimate uses” (where express consent would not be needed). The expres - sion “legitimate uses” includes purposes associated with employment, and measures to secure the inter - ests of the employer.
Indian labour laws do not prescribe any limitations in respect of the engagement of foreign workers by Indi - an establishments. However, there are certain addi - tional compliance requirements from a social security standpoint that an employer will have to undertake, such as making employees’ provident fund contribu - tions if the foreign worker qualifies as a non-exempt “international worker” under the Employees’ Provi - dent Funds Scheme 1952. However, in a significant development, the Karnataka High Court in Stone Hill Education Foundation v Union of India & Others [W.P. No. 18486/2012] held that the provisions of the EPF Scheme that required different treatment of Indian employees working abroad and foreign employees working in India were discrimina - tory and violative of Article 14 of the Constitution of India. The court struck down the differential treat - ment regarding social security contributions for these two classes of workers. Following this decision, the Employees’ Provident Fund Organisation (EPFO) has acknowledged the ruling and is currently evaluating its next steps. These may include seeking a review or appeal before the Supreme Court of India. Until a conclusive decision is reached or further clarification is issued by the EPFO or the courts, the judgment introduces a degree of legal uncertainty regarding the continued enforceability of the existing contribution requirements for foreign nationals classified as inter - national workers. With respect to Overseas Citizens of India (OCI) spe - cifically, in 2021 the Ministry of Home Affairs of the Government of India prescribed various conditions/ requirements to be fulfilled by OCI cardholders before being engaged as an employee of an Indian entity. Pri - marily, all OCI cardholders are now permitted lifelong multiple entries to India for any purpose. However, OCI cardholders will have to seek special permission from a specified competent authority – the Foreigners Regional Registration Office (FRRO) or the relevant Indian mission – to be engaged as research scholars, in journalistic activities, or as interns or employees in foreign diplomatic missions/foreign government organisations in India (which is a special category).
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