Consultant Employement

Hi
I am working in an IT company. We have one employee on our payroll however we now want to take him as a consultant where we will not be paying him salary instead a fee will be paid to him on the basis of his performance (target based).
He will be attending office as regular and also will be provided all the infrastructure required. This is already informed to employee and he agrees to it.
Can you pls help me on the procedure to do this.
According to my knowledge i should first take his resignation and then appoint him as a consultant on contract.
Is there any other legality involved in this case?

Hello Mrunali,

Get his resignation letter & relieve this person after completing his Full & Final settlement. This implies that this person has quit the job.

If you have a specific job for him, then it's advisable to give him a service contract much like an agreement that you enter into with an consultant/Travel agency/Office AMC agency/Hotels/etc. Get in quotes from 2 or 3 other agencies/consultants who show their interest in doing similar kind of work for your company.

Kindly ensure that you do not specify the job location, working timings, leave/holiday details, anything which you would generally find a mention in a normal employment order/appointment letter. You must specify what your company wants in terms of service from this consultant and the total monthly remuneration you would pay to the consultant against the service delivered.

Payment to be made against invoice raised by the associate every month. Liability related to Income Tax, etc to be looked into by the associate.

Cheers, A.B.