A look at key provisions of employment contracts

Traditionally, in India, few senior management employees had management contracts. Today, executing a bilateral employment agreement is highly recommended for all employees to outline the expectations and obligations on them during and after employment.

The contract can address many other aspects of the employment relationship, such as: duration of the job (fixed or indefinite); the employee’s responsibilities; what benefits the employee will receive (generally structured for tax efficiency); grounds for termination; limitations on the employee’s ability to compete post employment; protection of trade secrets and client lists; ownership of the employee’s work product; non-compete and non-solicitation of customers and suppliers.

A well drafted and enforceable employment contract makes sure that an employee’s hiring and firing doesn’t disrupt operations and functioning. With the increase in cross-border trade and an enhanced competitive climate in India, negative covenants are becoming increasingly necessary. This article highlights some important provisions in any employment contract and any limitations on their enforceability.

Anuradha Iyer is the founding partner of I&S Associates. The views expressed are the author’s views and are not a substitute for specific advice.