Can We Hire A Candidate On Contractual Basis?

Dear seniors,
I had a small clarification in employing a candidate on contractual basis. Can you all please help me on the following questions?
1) Can we hire an employee on contractual basis? Specially planning to hire an freelancer as a contract employee.
2) If yes, what type of letters can be given to those candidates?
Is it similar kind of appointment letters or a different formats? Please help me with that formats?
3) Please confirm all the above based on legal and labour laws
Guide me to proceed further as its an immediate need.
Awaiting for your reply
Gayathri

There is nothing wrong in appointing an employee on a fixed term contract basis, say for one year or even for three years at a time. This is open especially in the case of such employees or employees of a particular grade who are not expected to stay back for long years. The letter of appointment shall be the same but with a specific mention that "your appointment is purely for a Fixed Term of one year/ two years/ three years from (date) AND AS SUCH YOUR EMPLOYMENT WILL BE TERMINATED ON (date)
But having employed on FTC does not mean that the employee will not be eligible for any benefits that others enjoy, like EPF/ESI, leave etc.
Regards,
Madhu.T.K

Dear Mr. Govind,
I have seen your response to the postings of Mr. Pankaj. Though it is useful, I would appreciate if you or anyone could elaborate on the followings.
1. As per my Company (Construction Nature) policy, the retirement age is 58.
2. We have selected a candidate who is nearing 60yrs, who earlier worked at our Dubai Operations to head the Safety Dept at our Chennai office.
Now, we will not be able to employ his as regular employee as he is not fit into our policy.
If we employee him as Consultant against lump sum fee, what will be the privileges like leave, gratuity etc enjoyed by others.
And what will be the service tax that he suppose to incur from the fee we pay to him.
Thank you for your attention,
Regards
Shankar Kumar
Manager HR, SIPL.

I don't think that the above post by Shankar kumar has any relevance to the question asked by Gayatri.
Madhu.T.K

Dear Ms.Gayatri
In case your establishment has a standing order certified under the Industrial Establishment Standing Orders Act it is advisable to incorporate "fixed term employees/workmen" as one of the categories under "classification of workmen". You would notice that there are no restrictions on the number of fixed term employees/workmen in an establishment. There may not be any problem if a couple of employees are employed on fixed term contract. But if a large number of employees are employed on fixed term contract, their engagement as fixed term employees itself could be challenged on the ground that the certified standing orders do not provide for such a classification. Whatever may be the outcome of the litigation, it will be of nuisance value to the employer.