Check your employment contract for these before signing

You finally land that dream job. They’ve sent you an offer letter. All that remains now is for you to sign their employment contract (and may be a few secondary contracts).

In all the excitement, you simply sign and send it back to the employer. They have been so good throughout your recruitment process. What could go wrong?

After the first few exciting months, you are informed that you are being transferred to another branch of your company, in another city. When you protest, you’re reminded of the employment contract you signed that clearly mentioned the employer’s right to transfer you.

Needless to say, employment contracts must be carefully perused to have a clear understanding of what is expected during your term of employment.  

For a start, you must verify your details and those of the employer. Make sure your designation, job description, start date, location of your job and any information regarding changes to your job’s location are the same as were discussed during your interview process.

Thereafter, check your employment contract for these before signing it.

1) Probationary period

• Probation is a period of trial for an employee and its primary purpose is to find out whether the employee is suitable for the role. Employers typically hold the right to terminate the employee’s services during her probationary period if her performance is not found to be satisfactory.
• It is crucial to know whether you are required to be on probation in your new job, how long the probation will last and how it will affect your legal rights.

2) Working hours

• Ensure that the working hours are consistent with your expectations and designation.
• This clause can determine how well you will be able to balance the requirements of your new job with the demands of your personal life.
• Are your hours part-time or full-time?

3) Length of employment

• Does your employment contract expire after a fixed term?
• Your contract must clearly state the duration of your employment with your new employer.

4) Employment bond

• Typically, an employment bond requires that the employee work with the employer for a fixed term before she’s able to resign from her position.
• If the employee decides to resign before this period has expired, she needs to pay a certain pre-determined sum of money to the employer to comply with her obligations under this bond.

5) Remote working

• Does your new role give you the option of working remotely?
• How does it affect your legal rights?

6) Salary and bonus

• Your employment contract must provide a clear break-up of different elements of your remuneration package. Your new employer should have had a discussion with you regarding this during your interview process.
• Double-check that the salary package on your employment contract matches the one offered to you in your offer letter. And if there’s anything you are unsure about, you must speak to your employer and clarify your doubts.
• The difference between your cost-to-company (CTC) and in-hand salary must be clear to you.
• Check the bonuses or incentives that you are entitled to during the course of your employment. Are they guaranteed or do you need to earn them through your performance?
• This clause should also mention the dates when your salary will be paid to you.

7) Other benefits

• You should be aware of the benefits that are included in your compensation package, for you and your family.
• These can include medical insurance and other health benefits, company stock options, retirement plans, gratuity, etc.

8) Overtime rules

• It is common for private sector employees to work overtime, well past their working hours, in order to achieve their company’s targets.
• Make sure you have clarity on whether you will be eligible for any overtime remuneration if you work beyond your mandatory working hours.

9) Holidays and leave days

• Time-offs, leave days and holidays based on company policies and detailed information on paid leave days should be mentioned in this clause.
• What rights do you have to take time off in the case of illness or injury? Are you entitled to sick pay during your time off?
• What are their maternity and paternity leave policies? Do they cover adoption?
• Are you entitled to parental or childcare leave?

10) Intellectual property

• Who will own the work product you develop during the course of your employment?
• For instance, you may develop a code working as a software engineer at your new company. Who will the code belong to – you or your new employer?
• Go through this clause to prevent any ambiguities in the future.
• You may be asked to sign a separate contract covering issues relating to intellectual property rights.

11) Confidentiality and privacy

• What information will be considered sensitive and what will be the legal consequences for an employee who divulges such information?
• This may look like a standard clause in a contract, but a violation of this clause can have grave consequences for an employee.
• It is likely that there’s a separate contract on confidentiality.

12) Restrictive clauses

The following are examples of restrictive covenants, which are normally designed to protect the interests of the employer. These usually don’t apply during your term with the employer but only take effect after your contract terminates. Make sure these are applicable only for reasonable periods of time.

• Non-solicitation clause: This clause prevents an employee from poaching the company’s clients when she moves to a new company.
• Non-poaching clause: This is similar to the non-solicitation clause, except it refers to poaching ex-colleagues or employees of the previous company.
• Non-compete clause: This clause prevents an employee from working for a competitor of the employer (or in competition to the employer, like a leisure pursuit) either during or after the termination of her employment.

13) Termination and Resignation

• This is one of the most crucial clauses in your employment contract and must be read carefully.
• This clause will specify reasons for which an employee’s contract with the new employer may be terminated. Other than performance related terminations, the reasons can include misconduct by an employee or violation of a company rule, policy or regulation, or any general law of the land.
• It may also include provisions for severance packages. These are generally applicable where a contract is terminated due to reasons beyond the control of the employee, for instance a merger or closure of the company. Many employers pay compensation to their employees in these circumstances. Employees become entitled to receive these after the termination of their contract.
• This clause should also mention how much notice you will be required to give to your employer if you wish to resign from your position.

More often than not, employment contracts aren’t open to detailed negotiation. Even so, you must check that all your rights are protected under the contract. Do not hesitate to ask the employer to clarify doubts or have a contracts lawyer take a look at it.

Remember, other than the employment contract, your tenure with the new employer will also be subject to the company’s policies.

Finally, make sure you have a copy of your employment contract signed by both parties to the contract.

[Disclaimer: This post is an attempt to raise awareness of laws affecting Indian women. The post is only for general information and is not meant to substitute legal advice.]