An employment contract serves as a legally valid agreement that lists all the terms and conditions of the employment. It also identifies and recognises the rights, duties, responsibilities expectations, and obligations of both parties. Hence, it serves as a bilateral agreement for a specified time interval, during which both parties must adhere to the guidelines mentioned in the contract. Visit here to know more: https://vakilsearch.com/employment-agreement

1. Employment Contract

2. What is an Employment Contract?
An employment contract serves as a legally valid agreement that
lists all the terms and conditions of the employment. It also
identifies and recognises the rights, duties, responsibilities
expectations, and obligations of both parties. Hence, it serves as a
bilateral agreement for a specified time interval, during which both
parties must adhere to the guidelines mentioned in the contract.
The labour laws in India require such contracts to follow certain
rules and regulations. As a result, such contracts require careful
and precise drafting to ensure legal compliance. Hence, most
employers turn to legal experts and advocates for drafting their
employment contracts. Read on to find out more about employment
contracts, why you need them and how VakilSearch can help you
draft one.

3. Important Clauses In an Employment Contract
While there is no rigid format for drafting an Employment Contract, the
following are the most widely included clauses;
1. Appointment
2. Term of employment
3. Responsibilities
4. Remuneration
5. Salary payment
6. Sickness and disability
7. Termination
8. Confidentiality
9. Indemnification
10. Notice
11. Restrictive obligations
12. Choice of law and jurisdiction

4. Nature of Employment Contracts
An employment contract lays the foundation for an
employer-employee relationship within any organisation.
While there is no law that states that it must be in a
written format, all companies follow such a process as
having it in writing makes it legally valid.
The contract essentially specifies rules, regulations,
guidelines, terms and conditions regarding the
employment opportunity. The contract comes into effect
when an employee accepts the offer and signs the
agreement, providing his or her assent to the proposal
offered. This converts the contract into a promise,
wherein modifications can be made only after approval
from both parties.

5. Confidentiality and Non-Disclosure Agreements
Most employment contracts nowadays feature a confidentiality
clause that essentially provides protection to a company’s data.
This clause prohibits the employee from disclosing sensitive
information, including client data, trade secrets and other financial
information to a third-party.
As a result, employees cannot disclose such information to any
other person, without prior permission from their employer. In
many cases, companies make their employees sign a Non-
Disclosure Agreement or NDA to clearly define and specify
confidentiality clauses. Both the Indian Penal Code and the IT Act,
2000 allows companies to press for criminal prosecution, leading
to imprisonment, fines or both if employees breach such
provisions.

6. Restrictive Clauses
Another key clause that is part of employment contracts are Restrictive
Clauses which help protect the interest of the employer and prevent unfair
competition. This clause restricts past employees from using their
knowledge of the business’ strategy, or client details to gain monetary
benefits from rival companies.
In essence, these protect employers from losing their competitive
advantage due to ex-employees jining competition companies. It usually
prevents such appointments for a specific time interval, after which the ex-
employee may join any company or business. Not only does this prevent
poaching of employees by competitors, but it also provides a much fairer
playing field to all businesses.

7. Main Laws and Acts Regarding Employment
Here’s a quick look at the various laws and regulations which help decide labour
laws in India;
1. Industrial Disputes Act 1947
2. Factories Act 1948
3. Shops and Commercial Establishments Act for individual States
4. Industrial Employment Act 1946
5. Contract Labour Act 1970
6. Maternity Benefit Act 1961
7. Payment of Wages Act 1936
8. Minimum Wages Act 1948
9. Payment of Bonus Act 1965
10. Equal Remuneration Act 1976
11. Employees’ Compensation Act 1923
12. Employees’ State Insurance Act 1948
13. Employees’ Provident Fund and Miscellaneous Provisions Act 1952
14. Payment of Gratuity Act 1972
15. Trade Unions Act 1926

8. Types of Contracts
1. Fixed-term Contracts: Used for short-term employment
when the business requires employees to fulfil a sudden
order or large project
2. Offer Letter: A brief introduction to the employee’s role,
without going into too much details regarding the
employment opportunity.
3. Service Agreement: Contracts make use of such
agreements as they mostly require workers till the
competition of a specific project.
4. Consultancy Agreement: Used when an organisation
hires a consultant or independent contractor for a
particular project.
5. Permanent employment contracts: Applicable to
regular employees who work standard hours and are a
part of the organisation’s pay rolls on a regular basis.

9. Benefits of an Employment Contract
1. Minimal liability for employees and employers
2. Removes unnecessary uncertainties regarding the
job
3. Gives assurance to both parties
4. Helps in developing a feeling of mutual trust and
respect
5. Clearly defines the roles, responsibilities and
obligations of both the employer and employee
6. Ensures that both parties are treated fairly
7. Provides legal validation for the employment
opportunity
8. Provides a sense of job security and certainty to the
employee
9. Helps in managing expectations

10. How VakilSearch Helps
1. Upon contact, we will receive your request for drafting an Employment
Contract
2. Soon after, our representative will get in touch with you to take your request
forward.
3. In case we need more information regarding your business, we will contact you
as and when required.
4. After we receive all the required details, our in-house lawyers and legal experts
will draft the perfect Employment Contract for you.
5. We will then send it across for verification within 2- 4 business days.
6. Our team will also provide two rounds of iteration free of cost.
7. After making the required changes, our team will send the contract across
once again for final verification.

11. Why Vakilsearch?
● We provide quality service at the most affordable prices
● Have over 4,00,000 satisfied clients and the number only grows
● Truly digital services that make things easy for both you and us
● We offer advice on how to apply, and handle all the paperwork
● Constant updates until the registration is complete
● Most cost-effective solution
● Trusted service provider with over 1200 positive reviews
● Access to reliable professionals from our team of experts
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