Hi, I work at a company that has a branch established in Bangalore, India. Our HR admin there has advised me on employment contracts as follows:
"According to Indian law, we cannot make employees work through a contract for a long time. A two-year contract that is made at the time of joining is completed. Furthermore, we cannot make them work under any such contract for a specified period, but they will remain our employee until they choose to resign."
This doesn't sound right to me. How can there not be a valid document while an employee works? How would you prove that an employee is working for you after the contract expires if not through the renewal of the contract?
Any help would be appreciated.
From Saudi Arabia, Riyadh
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"According to Indian law, we cannot make employees work through a contract for a long time. A two-year contract that is made at the time of joining is completed. Furthermore, we cannot make them work under any such contract for a specified period, but they will remain our employee until they choose to resign."
This doesn't sound right to me. How can there not be a valid document while an employee works? How would you prove that an employee is working for you after the contract expires if not through the renewal of the contract?
Any help would be appreciated.
From Saudi Arabia, Riyadh
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Hello,
I understand your concern about the continuity of the employment relationship after the expiration of the initial contract. However, it's important to note that the Indian labor law indeed does not mandate renewing a contract for a person to continue their employment.
Here's how it works:
1. 🔜 At the time of joining, an employment contract is formed for a specified period (in your case, two years). This contract is a legal document that outlines the terms and conditions of employment, including job responsibilities, compensation, benefits, work hours, and more.
2. ⬇️ Once the specified period ends, the employee doesn't automatically cease to be an employee. Instead, the employment relationship continues on an 'at-will' basis.
3. 🔑 The 'at-will' employment means that the employee can continue to work until either the employee decides to resign or the employer decides to terminate the employment relationship, in both cases with appropriate notice as per the terms initially agreed upon.
4. ⌛ While there may not be a renewed contract, the initial employment contract and the record of salary payments, attendance, and performance evaluations serve as evidence of the ongoing employment relationship.
However, to ensure clarity and avoid potential disputes, it's often a good idea to put an understanding in writing even in 'at-will' employment situations. This could be a simple letter stating that the initial contract terms continue to apply, except for the duration of the contract, which is now on an 'at-will' basis.
📜 Please note that different states in India may have slightly different labor laws, so it's always a good idea to consult with a local HR expert or a labor law attorney to understand the specifics that apply to your situation.
I hope this helps! If you have more questions, feel free to ask.
From India, Gurugram
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54I understand your concern about the continuity of the employment relationship after the expiration of the initial contract. However, it's important to note that the Indian labor law indeed does not mandate renewing a contract for a person to continue their employment.
Here's how it works:
1. 🔜 At the time of joining, an employment contract is formed for a specified period (in your case, two years). This contract is a legal document that outlines the terms and conditions of employment, including job responsibilities, compensation, benefits, work hours, and more.
2. ⬇️ Once the specified period ends, the employee doesn't automatically cease to be an employee. Instead, the employment relationship continues on an 'at-will' basis.
3. 🔑 The 'at-will' employment means that the employee can continue to work until either the employee decides to resign or the employer decides to terminate the employment relationship, in both cases with appropriate notice as per the terms initially agreed upon.
4. ⌛ While there may not be a renewed contract, the initial employment contract and the record of salary payments, attendance, and performance evaluations serve as evidence of the ongoing employment relationship.
However, to ensure clarity and avoid potential disputes, it's often a good idea to put an understanding in writing even in 'at-will' employment situations. This could be a simple letter stating that the initial contract terms continue to apply, except for the duration of the contract, which is now on an 'at-will' basis.
📜 Please note that different states in India may have slightly different labor laws, so it's always a good idea to consult with a local HR expert or a labor law attorney to understand the specifics that apply to your situation.
I hope this helps! If you have more questions, feel free to ask.
From India, Gurugram
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Kami Export - Negative Covenant in Contract of Employment.pdf (1).pdf