What are internal regulations or internal rules of the enterprise? Why is an enterprise required to have internal regulations? What should be included in the internal regulations? What are the conditions stated in the law to recognize the effect of the internal regulations prepared by the employer? This article will answer to these questions.
1. What are the internal regulations of an enterprise, establishment or company?
Internal regulations refer to regulations or rules drawn up by the employer, who employs at least eight workers, for implementation in his or her enterprise, establishment or company. Drawing up internal regulations, on the one hand, is an obligation of employer as required by Article 22, and on the other hand is the right of employer who directs and manages his or her workers, enterprise, establishment or company as provided in Article 2 and Article 3 of the Labor Law.
Furthermore, from the view point that employer must seek opinion from workers’ representative (shop steward) on draft of internal regulations and that the worker must follow and implement these internal regulations, it can be said that these internal regulations play role of binding contract or agreement between the worker and the employer.
2. Why is an enterprise required to draw up internal regulations?
The reasons the law requires employers to prepare or establish internal regulations might be as follows:
- To ensure equality for all workers without discrimination: Internal regulations are general rules or regulations that apply to all workers working in an enterprise, establishment or company, or to a group of workers or a category of workers as determined in the internal regulations.
- To ease employer in direction and management of workers, enterprises, establishments or companies: Having separate or special rules for each worker is difficult for employer due to the time consuming, resource constrain, and inefficiency. Therefore, special or individual working conditions of each worker (for example, wages, benefit, duration of employment relationship and place of work, etc.) are defined in the individual employment contract while common or general working rules or conditions (working hours, leave, penalties and disciplinary action, etc.) are set out in the internal regulations of the enterprise, establishment or company.
3. What should be included in the internal regulations?
Pursuant to Article 23 of the Labor Law, the internal regulations may include the rules relating to the conditions under which the employer hires workers, calculation and payment of wages and perquisite, benefit in kind, working hours, breaks and holidays, notice periods of employment termination, health and safety measures for workers, obligations of workers and sanctions that can be imposed on workers. Employers may also set other rules in the internal regulations that are appropriate to the conditions and procedures of their enterprises, establishments or companies.
4. What are the requirement for internal regulations to be recognized by law?
In accordance with the Labor Law, there are some requirements as follows:
- Firstly, the content of the internal regulations must not limit or delete the rights of workers. Article 25 of the Labor Law stipulates that any provision of the internal regulations which limits the rights of worker set forth in the laws and regulations in effect, or in convention, or in collective agreement applicable to enterprise is void. The Labor Inspector must instruct the employer to include the provisions, required for implementation according to laws and regulations in effect, in these internal regulations.
- Secondly, the employer must consult with workers’ representatives regarding the content of the draft of internal regulations. Article 24 of the Labor Law stipulates that the internal regulations must be established by the manager of enterprises after consultation with workers’ representatives, within three months following the opening of the enterprise, or within three months after the promulgation of the Labor Law if the enterprise already exists. Pursuant to Article 284 of the Labor Law, workers’ representative refers to shop stewards who must be consulted and put forward a written opinion on the draft of internal regulations provided for in Article 24 of the Labor Law, or on draft of modification to these regulations. In addition, Article 41 of the Law on Trade Unions also stipulates that shop stewards must be consulted and provide written advice on the draft internal regulations set out in the Labor Law or on the draft of modification to these regulations.
- Thirdly, the employer must obtain a visa from the Labor Inspector. Article 24, paragraph 2 of the Labor Law stipulates that before becoming effective, the internal regulations must be visaed by the Labor Inspector. This visa must be issued within a period of sixty days.
- Fourthly, there must be publication of these internal regulations to the workers. Article 29 of the Labor Law stipulates that the internal regulations must be publicized and posted in an appropriate place easily accessible in the workplace and at the entrance of the place where worker is employed. These internal regulations must be kept in good condition and read clearly at all times.
In conclusion, internal regulations are rules of enterprise, establishment or company, which was drawn up by the employer in consultation with the shop steward and must obtain the visa from the labor inspector before they come into effect. Even though internal regulations was prepared at the initiative of employer, employer and worker must abide by these internal regulations.
Please feel free to make comment if I miss any points or requirements. Please note that this article is not legal opinion or legal advice.