Employment Contract In Chennai

An agreement between an employer and employee and is the basis of the employment relationship

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Formally known as Madras, it is the capital of Tamil Nadu. It is the 36 largest Urban Area by its population in the whole world.  It attracts various tourist as they are having Chennai Central , Marina Beach , Madras High Court , TIDEL Park , Ripon Building , San Thome Basilica , Kapaleeshwarar Temple etc. It is having the Third largest expatriate population in India .It is also one of the largest municipal economies of the country. It is also selected to be one of the smart city under the smart city Mission

An Employment Contract is entered between the employer and employee; it vividly states the roles and responsibilities thatare expected from the employee, along with the payment structure for the same. This contract further establishes a relationship between the two parties, the employer, and employee, it is equally important for the employee as well, as it creates a clear picture for the employee to act in a specified manner and what all should he be expecting from his employer. An employee is expected to read each and every minuscule detail as mentioned in the contract, as the violation or acting in a manner against the contract would attract legal consequences which would be pleasant for the employee. It is important to note that the Employment Contract is bilateral in nature, and is thoroughly covered under the Indian Contract Act, and hence requires all the basic essentials which are required in any other contract. The employment contract is expected to contain: Roles, Responsibilities, Salary Structure, Duration of the job, nature of work, paid & unpaid holidays, and overtime pay etc., anything that is understood as an essential to the employee is required to be drafted and notified to the employee. An employment contract, however, doesn't come into force unless it has been signed and ratified by the other party.


Reasons to have an Employment Contract in Chennai

It is always beneficial to enter into an employment contract, because it serves as a strong foundation for the formation of a relationship between the employer and the employee, and ensures that the two parties share a healthy and happy bond. Other additional reasons to have an employment contract can be enumerated as the following:

  1. Defining roles and responsibilities – It serves the purpose of defining proper and accurate roles and responsibilities that are to be expected from the employee, and what his work would be in relation to the employee organization.
  2. Definite Wage & Salary Structure – This paints a very clear picture to the employees regarding how the wages and salary are to be received by the employees and provides for a structural formation of increments and bonuses.
  3. Duration of Employment – Sometimes the employment is offered for only a specific duration of time, and this is clearly mentioned in the contract if the employment is of such nature, hence it prescribes a timeline after which the employee’s services would be terminated, and hence it ensures a more organized form of employment.
  4. Establishment of a trustworthy relationship – A trustworthy relationship is really vital for any organization to be operational for a long term. Hence employment contracts help build a harmonious as well as a transparent relationship with the employers.


The Process of drafting an Employment Agreement Chennai

Drafting an employment contract has to be done with special consideration and with due notice to the details of all the terms and conditions, along with the basic and important provisions. An Employment Contract can be drafted by the employer himself, though it's still advisable to approach an attorney who is well familiar with the nuances of drafting a contract or approach a professional service like Company Vakil, provides services related to the drafting of employment contracts. The Process of drafting an employment Agreement Chennai can be understood as:

  • Mentioning the details of the contracting parties – First and foremost the contract shall mention the details of the parties who are contracting, which is the employer and the employee and it should contain all the relevant data in respect to Nationality, Place of Birth, everything.
  • Describing the nature of work, duration of employment and timings of work – The main components of the contract which properly and accurately defines the roles and responsibilities of the employee, and the work that is so expected from him, mentioning the duration of the work if the employment offered is not permanent in nature.
  • Defining the salary structure – The salary that would be drawn by the employee and at what intervals would it be drawn (daily, weekly or monthly).
  • Leave system (Paid or Unpaid) – Whether the employee can take leaves, and at what intervals. The contract has to prescribe provisions regarding paid and unpaid leaves along with the number of leaves.
  • Dispute Resolution – In case the employee is found acting against the provisions of the act or if the employer is found harassing or causing trouble to the employee, simply put if any of the parties are found in violation of the terms of the contract, the contract should mention about the dispute resolution mechanism.
  • Financial Provisions – This refers to the income tax, allowance, and insurance benefits, which are to be inserted into the employment contract.
  • Confidentiality –The information mentioned in the contract is usually very private and sensitive in nature, hence the confidentiality clause is mentioned so as to secure the terms of the contract from any third party.
  • Acceptance Approval from Employee – Lastly, when the employee has gone through, cleared his doubts and is fully satisfied with the provisions of the contract, and then only the contract comes in operation & becomes a legally binding document.

Minimum Requirements of an Employment Contract in Chennai

An employment contract has the same ingredients and essentials like any other contract which is covered under the Indian Contract Act, the basic requirements of an employment contract can be understood as follows:

  • Offer – The contract so in question, should be proposed from the employer to the employee, wherein the employer is offering the employment opportunity to the employee, to which the employee has to agree or can choose to disagree, hence the offer here plays the role of a proposal which is dealt with the employee
  • Acceptance- There should be consensual acceptance without any doubts in the mind of the employment contract, all the ambiguities which may arise in the mind of the employee have to be addressed and then the employee should accept the proposal put forward to him.
  • Consideration – Consideration is defined as something in return, hence it is something because of which the parties are entering into a contract. Hence it plays a very vital role in the employment contract, without which the contract stands void.
  • Capable Parties – The parties which are entering into the contract (both employer and employee) they should be competent to enter into the contract, and should be declared to be incapable under the eyes of the law or any act.
  • Legally Recognized Object – The contract which is being entered into should be legally recognized and not for any unlawful activities, if done so then it will attract dire legal consequences upon both the employer and the employee.
  • No Coercion/Free Will -The contract that has been so entered into should be free from any external coercion or force, and the employee should be entering into the contract without any pressure from an external force.


Advantages of Employment Contract in Chennai


An employment contract is extremely beneficial for the employers and employees, as it serves a lot of purposes, and it has even emerged to be the foundation of the relationship that the employees share with their employers. The advantages of the employment contract can be understood as the following.

  1. Transparency & Harmony amongst the parties – The employment contract creates a harmonious relationship between the employer and employee, as it sets out expectations and a clear picture to both the parties, who are aware with each and every minuscule provision mentioned in the contract.
  2. Legally Binding – In an instance of non-conformity to the provisions of the act, either of the parties can be subjected to the legal consequences, since a contract is a legally recognized document in the eyes of law.
  3. Clarity – The roles and responsibilities of the parties are laid down in description, hence the employees have a clear picture regarding what is expected from them and how are they supposed to operate in an organization, each employee is expected to do a different kind of work, hence the employment contract ensures that there is no overlapping of the duties and responsibilities, whatsoever.

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FAQ's Related to Employment Contract Chennai


Under which law is the Employment Contract governed?

The employment contracts in india are governed under the Indian Contract Act.


How are the terms classified in the Employment Contract?

The employment contract terms are classified into express and implied terms & conditions.


Can alteration be suggested to a particular Employment Agreement Chennai ?

Yes, alterations can be suggested to an Employment Agreement Chennai, if the employer doesn’t agree to the alterations so suggested then the contract can be terminated.


What is the period usually suggested in the termination clause, for notifying the employer about the termination of employment?

Though it might vary from case to case, it is usually prescribed to notify the employer in the timeline of 1 month for termination of employment.


What is known as the probation period?

Probation period refers to the trial period where the employer does a strict assessment of the work done and the performance of the employee.


What are the different leaves covered under the Employment Contract?

There are three kinds of leave that an employee can take which are: Annual Leaves (Fixed in number and are paid in nature), Maternity Leave (Only for women, who are expecting, can be both paid and partially paid in nature) and Gazette Holidays (which are prescribed to be holidays by the government of India).


What is usually the retirement age prescribed by the Employment Contract Chennai ?

Usually, the prescribed retirement age is fixed at 60 years, across most of the employee organizations.


What is the nature of the Employment Contract Chennai ?

It can be both oral and written in nature, though it’s preferred to be written since it can be logged into the records.


What are pre-hire disputes?

These are those disputes which may arise before the employee has been employed in the organization; they usually arise if the employee has certain due obligations to be attended by the previous employer.


Why is Employment Contract Chennai confidential in nature?

The Employment Contracts are confidential in nature since the information is private and sensitive in nature, and is to be safeguarded by the employer unless asked to be furnished in the court of law.