Employment Agreement

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Employment Agreement

Drafting of Employment Agreement

An Employment Agreement is the sole legal document between the Employer and Employee, which lays out the rights, duties, and obligations of both parties during the employment period. An Employment Agreement is a crucial document in managing employees as it lays down the rights and obligations of both the Employer and the Employee. From junior-most level to the CEO, everyone is an Employee, and to manage the employees efficiently, one needs to have an Employment Agreement.

Elements of Employment Agreement

An Employment Agreement should clearly define the terms and conditions of employment. The most common elements discussed in the Employment Agreement are:

Job Description of the Employee
Term of the Employment
Employee benefits
Remuneration/compensation to the Employee
Leave Policy
Grounds for termination
Protection of Confidential information
Ownership of Intellectual Property
Dispute Resolution
Governing laws and jurisdiction
Any other provisions deemed to be relevant to the Employer.

In the case of individuals hired on contractual basis for a limited period of time such as candidates hired for specific projects Service Agreement is drafted instead of Employment Agreement.

Position in Law

Employment Agreement has not been mentioned anywhere in the Indian Contracts Act, 1972. Still, as per section 27 of the Act, an agreement, which restrains an individual from carrying on a lawful profession, trade, or business, is void to the extent it restrains them. The restraint has to be reasonable to be permitted by law. Employment policies such as leaves, maternity leaves, working hours, etc. are governed by the applicable Shops and Establishment Act. Other relevant laws that govern various aspects related to employment are Factories Act,1948, The Maternity Benefit Act, 1961, The Payment of Gratuity Act, 1972, etc.

Drafting of Employment Agreement is simple with LegalWiz.in as it has experienced lawyers who ensure highest customer satisfaction and timely delivery of services. Whole process is managed online, with regular communication and assistance by the professionals available throughout. We have clients in all major cities of India including Mumbai, Delhi, Bangalore, Pune, Ahmedabad, Hyderabad and more as well as our services have equally relevant reach within smaller cities and towns in the country.

Significance of Employment Agreement

Clarity upon terms of employment

An Employment Agreement provides clear and detailed information about the provisions like remuneration, working hours, job description, duties, and obligations of the Employee. An Employee would want to be clear about his compensation/remuneration, which is only possible if you have a well-drafted Employment Agreement.

Dispute Resolution

An Employment Agreement may include a clause relating to the resolution of disputes. Disputes can be resolved in several ways, and parties are free to choose any method. One of the popular methods is Arbitration, which is preferable over lengthy litigation. If the parties are clear about their dispute resolution, then there would be no conflicts upon the same later on.

Protection of trade secrets

Employment Agreements contain clause relating to the protection of confidential information from disclosure to a third party. This clause states that Employee shall not disclose the confidential information of the organization which he is exposed to during the term of employment to any third party. As the Employer has the right to own the Intellectual Property prepared and developed by the Employee during the term of the Agreement a clause related to ownership of Intellectual Property is also common in the Agreements.

Restrictive Covenants

The agreement may include restrictive covenants such as non-compete and non-solicitation clauses. It ensures that an Employee shall not join a competitor or start a business based on the same idea and solicit the organization’s other employees, clients, distributors or service providers to leave the organization and join him after terminating his employment with the Employer.

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1. Follow Quick Process

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2. Experts at LW are here to help

Assigned Relationship Manager
Consultation for apt clauses to safeguard your rights as an Employer

3. Start binding your Employees with the Agreement

All it takes is 3 working days*

*Subject to Government processing time

Procedure to get the legal drafting done

DAY 1 - Collection

Discussion and collection of basic Information

DAY 2 - Execution

Drafting of Document by Professionals

DAY 3 – Submission

The first draft shall be sent to you for your review.

*If you feel you require any changes then you can contact the Professional at LW and he/she shall make the changes.
*2 amendments/iteration are included in the original drafting charges.

Explore FAQs for Employment Agreement

Frequently Asked Questions

2020-07-27T09:09:04+05:30

Is Employment Agreement legally valid in India?

Employment Agreement is legally valid and binding if it has reasonable restrictions upon the Employee. Unreasonable clauses and restrictive covenants render that portion of the Agreement invalid.

2020-04-30T08:24:33+05:30

Is it mandatory to notarise the Employment Agreement?

An Employment Agreement needs not to be mandatorily notarized by a public notary, but stamp duty has to be paid on the same. Stamp duty rates can be checked in Schedule of the applicable Stamp Act as it differs from state to state.

2020-04-30T08:25:03+05:30

What is the difference between a contractor and an employee, and why is this important?

A contractor is hired for fixed-term projects, and the Agreement governing the relationship is Service Agreement. In contrast, an employee is hired for full time, and the Agreement governing the relationship is Employment Agreement. A contractor is paid fees for which he needs to raise invoices, whereas the employee is paid a fixed salary.

2020-07-27T09:08:50+05:30

Can I stop my employee from working for somebody else?

Yes, an Employer has the right to the services of the Employee on an exclusive basis. It can be clearly stated in the Agreement that the Employee cannot provide his services to someone else during the continuation of Agreement.

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