Employment Contract India

Employment Contract India

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Employment Contract India
Employment Contract India

Employer-employee relationship is dynamic in nature as it not in constant state and keep changing. As the nature of their relationship changes the chances of disputed also arises. That is why there are many laws which governs the relationship of employer and employee and helps in settling disputes and also avoiding it. In India the contract of employment is like any other form of contract which must have all the essentials of the contract like offer, acceptance, consideration, competent parties, legal object and free consent.

Meaning of contract of employment

In simple words Contract of employment is a bilateral contract between employer and employee to provide employment for certain remuneration for a certain period of time. it is a kind of social relationship or express social relationship of employer and employee which is also regulated by laws.

What an employment contract includes?
  1. Appointment- It includes offer or proposal to the employee by the employer, acceptance of such proposal by such person(employee), location of employment, reporting etc.
  2. Confidentiality clause- under this clause employee is not allowed to disclose any information to third person without the permission of the employer. These are the information like trade secret, confidential information or any other information related to that organisation etc. if a person has done breach of this clause then it can also be punishable under IT Act and IPC.
  3. Non-Compete Clause- under this clause parties agree not to start a similar business or trade in competition of other party or not permitted to work in competing organisation. Restriction from trade is generally prohibited under the Indian constitution as it is a fundamental right bur it has certain exception and not absolute so this clause is valid by law.
  4. Non-soliciting clause- under this clause employee after resigning from the organisation is not allowed to solicit the advice to former customer or to arrange new work for his former colleagues or advise them to leave the organisation etc.
  5. Training bonds- sometimes companies make a bond with the employee that he will continued his employment for a certain period of time and can’t resign before expiration of that period. This prevent increase in employee turnover rate.
  6. Contract of employment may also specify term, primary responsibility and job description, remuneration (base salary, incentives, bonus, provident fund, gratuity), payment terms, deduction, termination, death and disability, hours of work, governing law, jurisdiction, arbitration etc.
  7. Duties of the employee, including maintenance of professional licenses, ethical actions.
Disputes related to employment of contract can arise on-
Employment Contract  India
Employment Contract India
Hiring of a foreign nation person-

Employment of foreign nationals are not restricted in India and all the laws applicable for regulating employment relation in India is also applicable on hiring persons of foreign nations. Such foreigner employed in India will be considered as resident of India. For such purpose he can apply for employment visa which will be applicable for 5 years and can also be extended

  • Conduct od applicant during his stay
  • Production of necessary document of continuation of employment
  • Filing of income tax return.
  • No adverse security inputs

Thus, it is now clear that contract of employment ensures that all the terms and conditions of employment are specified so that confusion and dilemmas can be avoided.


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