Contract Employment Agreement – India

Employee agreements specify the terms and conditions of employment for an employee in the organization they work for. Contract Employee Agreements are that companies enter into when they hire new employees. Employers can use it for full-time and part-time employment, as well as for fixed-term or work contract agreements for workers.

There are many details in this Agreement, such as job duties, salary and benefits, work hours, confidentiality, annual leave, and other key terms.

As soon as an employer brings on a new employee, the parties usually want to get started as soon as possible. Hence, the employer may wish to first provide a letter that explains some of the key terms. Employers may wish to begin with a Letter of Offer for Employment, then follow that up with this Employment Agreement.

Contractors should not use Employment Agreements every time. Contractors should use a separate legal agreement named Service Agreements.

Employee agreements are important

Employment Agreements can be used by employers to hire employees, whether they are employed full-time, part-time, fixed-term, casual, etc.

A copy of the employment agreement should be kept by both the employer and the employee. The agreement should be printed on stamp paper.

A three-step process to get employee agreements from Best Lawyers of India.

  • Employee agreement in LegalDocs portal.
  • Share the basic details of the employer and employee, such as their names, addresses, and titles to help the customer understand the contract employee agreement. Our employee contracts are drafted by top employment lawyers. You will have the chance to review and approve them. We will be able to help you by modifying the draft if any changes are required according to business needs.
  • Once the Employment agreement is completed by the Lawyer, you will get a copy of the agreement, and both parties, Employer and Employee, will be able to sign in with ease using AADHAR. A physical signature or a stamp on the company letterhead can also be used.


Agreements can be printed on letterhead, plain paper, or stamp paper. Do you have a properly stamped agreement? The process varies by state.

During the execution of any instrument chargeable with duty in India, any instrument must be stamped before or at the time of execution, as required by Section 17 of the Indian Stamp Act, 1899, while Section 2(14) defines a document as “any document that creates, transfers, limits, extends, extinguishes, or records any right or liability”. From the Indian Stamp Act, 1899 it can be concluded that it will be legally beneficial to pay the Stamp Duty, which varies from state to state, on the Employee Agreement so that it remains valid.

Employee Contract Laws:

Depending on the nature of the activity carried out by the employer, the employee may be subject to the terms and conditions of the Shops and Establishments Act or the Factories Act. Work hours and overtime are governed by the Shops and Establishments Act in each state in India.

List the employment agreement’s clauses?

Employer and employee responsibilities

Each employee’s duties and responsibilities must be spelled out in the employment contract. Additionally, the employer’s responsibility is mentioned in the contract.

Leaves and working hours

In the employee agreement format, India must describe the employee’s normal days and working hours. Obtaining and holding employment permits are necessary. Security and safety of employees are ensured by establishment and shop laws. When drafting an employment contract, keep that in mind.

Compensation and Salary

Every employee cares about their salary. What the employee puts in terms of effort is the return value. For full-time employees, salaries are paid monthly in India. An employee agreement must specifically state salary structure and salary amount. A notice period should be included when the salary is changed.

Double Employment
Employers have an interest in preventing employees from taking multiple jobs at one time. In your employment contract, you should prohibit the employee from taking up any other employment.

Privacy and Confidentiality
The biggest concern for employers is confidentiality. For employees whose daily duties and responsibilities involve having to deal with sensitive information such as trade secrets, An employee must sign a nondisclosure agreement in order to protect the company’s intellectual property or confidential information. If the employee will be exposed to extensive confidential information, a non-disclosure agreement can be negotiated separately.

Ownership of intellectual property
Organizations invest a lot of effort to educate employees about trends. Employees constantly generate intellectual property. Employers ask for IP rights to protect IP created on their premises or using mobile devices, laptops, or other employer hardware from misuse or personal use. Employees must declare that all IP created or used by employers will be owned by employers solely.

Clause of non-competition 

Many employees begin competing against their employer by opening the same business and purchasing the existing customers.
For this reason, employers include clauses that prohibit employees from starting similar businesses and joining competitors.

Employment Termination

Any employment contract should have a termination clause. It must be clear why the employment contract can be terminated and on what terms.


Each party will approach a predefined arbitration authority in case of a breach of contract.

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