Seeking Guidance on Indian IT Employment Contracts: Legalities of 36-Month Terms and Resignation Restrictions

Hi all, I'm a Japanese HR consultant. Could anyone send me an employment agreement template for hiring Indian employees for an IT software company in India? Or, please give me some info or an outline of Indian Labour Law (IT industry). Especially, I would like to know whether it's legally valid to set an employment period of 36 months as a contract employee, or if it's legitimate to restrict a new employee from resigning within 3 years of the employment period at the company's discretion.

Thanks!

Location and Details Inquiry

Where are you located - India or Japan? Please mention a few more details so that the most appropriate suggestions can be given.

1. Any reason why you mentioned specific numbers [36 months, 3 years]?
2. Will the employees have to work in India, Japan, or both locations?
3. Will the employees be on your rolls or the company's?

In general, technically (meaning legally), such agreements have always been the bone of contention among various fora and the courts too. There have been court judgments that such agreements aren't legal. But there have also been judgments that 'in some circumstances' they are legal.

I suggest you use the research facility at the top of this page to lead you to the earlier threads/discussions regarding this topic - which has been discussed many times and at great length. Or you can go through the links on the right side of this page of earlier threads. You could get some more idea about this topic.

However, practically, many companies have typical agreements (or bonds, as some companies term this) similar to what you mentioned - though the period could vary - the basic idea of such efforts being to instill some amount of fear/hesitation into the employee before he/she quits before a specific period of time.

Not sure if I have answered your query - please give your feedback by way of elaboration so that your actual concerns can be addressed by all the members of this forum.

Regards,
TS

Thank you very much for your inquiries and helpful comments. I'm a Certified Social Insurance and Labor Specialist, a uniquely qualified professional consultant in Japan, specializing in labor laws, social security, and HR management. My client, a Japanese company, is setting up a company (limited by shares) doing business in software development in the State of Andhra Pradesh in India. They intend to hire a few Indian employees as local staff and will begin recruiting from October 2011. As an agent for preparing an employment agreement and providing advice, I would like to know the labor laws and regulations in India.

Regarding Your Queries

1. The reason why my client would like to ensure continuity of employees' services on a minimum 3-year basis.
2. The employees have to work in India except for a business trip to Japan for a short term.
3. The employees will be under the company (my client).

In Japan, all employment agreements are required to comply with the law, which contains special exemptions and detailed enforcement regulations. I can imagine that circumstances would be very different in India, but I would like to know the basic regulations and a certain scope of legislation, including, if they exist, some gray areas.

Many thanks for your kind suggestions about using the research facility. I'll do it soon!

Best regards,
Miyuki

Hello Miyuki, please send me a PM or email me at: [Email Removed For Privacy Reasons]. Which city in Andhra Pradesh is your client setting up? I stay in the same state. I have a clear picture now. Please check through the research option and let me know if you need anything further. There are many types of agreement templates in this forum, so you may need to go through quite a few of them. I can check with our legal team and get back to you if what you find here doesn't address your concern.

Regards,
TS