Clauses of an Employment Agreement in India
All businesses run on manpower. It is the employees who make a successful business and help achieve Company objectives. But, this can happen only when companies and employees work hand in hand. For this, the company has to provide all details of employment to the employee, which is in the form of a written document.
This written document is nothing but an employment agreement. This agreement binds the employer and employee to each other.
An employment agreement is a legally binding document, which defines conditions for working with a company during the course of his/her employment.
As soon as you join a new job, you have to get the duly signed employment agreement from your employer. The employment agreement will have all the terms and conditions of employment. This agreement will give a sense of security and protection to both employer and employee. It also serves as evidence, in case of any disputes between employer and employee.
See Also: Rights of Employees in India
The most important thing that must be included in the employment agreement is the details of the parties involved in the agreement. Like every other agreement, the employment agreement must have at least two parties. These two parties are employer and employee. The agreement must contain the details of the company as well as the name and address of the employee.
The employment agreement must mention the employee designation and the description of the job. This includes the responsibilities that have to be taken by the employee in the course of employment.
The agreement must mention the remuneration that will be paid to the employee for his services to the company. This consists of basic salary, PF deductions, health benefits, variable pay and so on. The agreement should also mention the date when the salary will be paid to the employee.
The employment agreement will mention the number of paid leaves provided to the employee in a particular time period. It should also mention if an employee can carry over any unused leaves to the next year or can encash on termination of employment.
The agreement must clearly mention if the employee is employed for a continuous period or for a set time period. This consists of information like the number of hours an employee is expected to work and other options like work from home.
The agreement must talk about the reimbursement that the employee would receive on spending out of his own pocket while discharging his duties. The agreement must clearly mention, which are the expenses, reimbursed by the employer.
The agreement must mention how the employer and employee can terminate the contract. It should also include the actions that can be taken by either party in case of breach of the agreement.
The agreement must mention the measures that can be taken to resolve the disputes between the employer and employee. It can also include the Alternative Dispute Resolution like Arbitration. Arbitration is a non-judicial method for the settlement of disputes, where an independent third party (arbitrator) makes a decision.