Permanent Employment Contract for India

Permanent Employment Contract Template for India

A comprehensive employment agreement governed by Indian labor laws that establishes a permanent employment relationship between an employer and employee. The contract outlines all essential terms and conditions of employment including designation, duties, compensation, benefits, working hours, leave entitlements, and other key terms in compliance with Indian federal and state labor regulations. It incorporates mandatory provisions required under various Indian employment laws while protecting both employer and employee interests through clearly defined rights, obligations, and termination procedures.

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What is a Permanent Employment Contract?

This Permanent Employment Contract is designed for use when establishing a formal, ongoing employment relationship in India. It serves as the primary document defining the employment relationship between organizations and their full-time employees, incorporating all mandatory requirements under Indian labor laws including the Industrial Employment (Standing Orders) Act, Payment of Wages Act, and other relevant legislation. The contract is suitable for both white-collar and blue-collar positions, providing comprehensive coverage of employment terms, statutory benefits, and workplace policies while ensuring compliance with federal and state-specific labor regulations. This document should be used when hiring permanent employees (as opposed to fixed-term or contract workers) and needs to be customized based on the specific role, industry requirements, and applicable state laws.

What sections should be included in a Permanent Employment Contract?

1. Parties: Identification of the employer company and the employee with full legal names and addresses

2. Background: Brief context about the employment offer and acceptance

3. Definitions: Key terms used throughout the agreement including Company, Confidential Information, Intellectual Property, etc.

4. Appointment and Term: Details of the position, designation, and employment term commencement

5. Duties and Responsibilities: Main responsibilities, reporting structure, and performance expectations

6. Place of Work: Primary work location and possibility of transfer/relocation

7. Working Hours: Standard working hours, breaks, and overtime provisions

8. Remuneration and Benefits: Salary structure, payment schedule, and statutory benefits

9. Leave Entitlement: Various types of leave including annual, sick, casual, and public holidays

10. Confidentiality: Obligations regarding company confidential information and trade secrets

11. Intellectual Property: Ownership of work created during employment and IP assignment

12. Non-Competition and Non-Solicitation: Restrictions on competing activities and soliciting employees/clients

13. Termination: Grounds for termination, notice periods, and procedures

14. Company Policies: Adherence to company policies, codes of conduct, and handbooks

15. Governing Law: Applicable Indian laws and jurisdiction for disputes

What sections are optional to include in a Permanent Employment Contract?

1. Probation Period: Include when the company wants to implement an initial probation period

2. Remote Work: Include for positions allowing work from home or remote working arrangements

3. International Travel: Include for roles requiring international travel and related terms

4. Performance Bonus: Include when offering variable pay components based on performance

5. Stock Options: Include when offering employee stock options or similar equity benefits

6. Training Requirements: Include for roles requiring specific training commitments

7. Post-Employment Obligations: Include detailed post-employment restrictions beyond standard non-compete

8. Flexible Benefits: Include when offering cafeteria-style benefit options

What schedules should be included in a Permanent Employment Contract?

1. Schedule 1 - Job Description: Detailed description of role, responsibilities, and key performance indicators

2. Schedule 2 - Compensation Structure: Detailed breakdown of salary components, allowances, and benefits

3. Schedule 3 - Company Policies: Key company policies that form part of the employment terms

4. Schedule 4 - Statutory Benefits: Details of statutory benefits like PF, ESI, gratuity calculations

5. Appendix A - Confidential Information: Specific types of confidential information covered under the agreement

6. Appendix B - Approved Outside Activities: List of pre-approved external professional activities, if any

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Information Technology

Manufacturing

Financial Services

Healthcare

Education

Retail

Telecommunications

Professional Services

Real Estate

Construction

Pharmaceuticals

Automotive

Energy

Media and Entertainment

E-commerce

Relevant Teams

Human Resources

Legal

Finance

Operations

Sales

Marketing

Information Technology

Research and Development

Customer Service

Administration

Production

Quality Assurance

Business Development

Corporate Communications

Supply Chain

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Senior Manager

Project Manager

Software Engineer

Sales Executive

Human Resources Manager

Marketing Director

Operations Manager

Research Analyst

Administrative Assistant

Customer Service Representative

Product Manager

Business Development Manager

Account Executive

Quality Assurance Engineer

Financial Analyst

Data Scientist

Legal Counsel

Production Supervisor

Industries
Industrial Employment (Standing Orders) Act, 1946: Defines terms and conditions of employment, including classification of workmen, hours of work, wage rates, leave rules, and disciplinary procedures
Payment of Wages Act, 1936: Regulates payment of wages, including time and mode of payment, permissible deductions, and penalties for non-compliance
Minimum Wages Act, 1948: Sets minimum wage requirements and payment intervals for different categories of employment
Employees' Provident Funds and Miscellaneous Provisions Act, 1952: Mandates retirement benefit schemes including provident fund, pension scheme, and insurance for employees
Payment of Gratuity Act, 1972: Provides for payment of gratuity to employees after rendering continuous service of 5 years or more
Equal Remuneration Act, 1976: Ensures equal pay for equal work regardless of gender and prevents discrimination in recruitment and service conditions
Maternity Benefit Act, 1961: Regulates employment of women during maternity and provides for maternity benefits
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013: Provides protection against sexual harassment at workplace and mechanisms for redressal of complaints
Shops and Establishments Act: State-specific laws governing working conditions, hours of work, leaves, and other employment terms for commercial establishments
Industrial Disputes Act, 1947: Provides framework for investigation and settlement of industrial disputes, including termination procedures
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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