Employment contracts (sometimes called employment agreements) are not merely a legal necessity. Rather, they can provide extra protections towards your business and help your business get going. By securing your recruits through an employment contract, you can formalize the arrangements made with your employees. Such contracts can also contribute towards fostering a positive and professional working relationship between the management and the employees. In this blog, we will discuss everything you wanted to know about casual employment contracts.
What are casual employment and casual employment contract?
Casual employment is one kind of employment where the employment status and the working hours of the concerned employee can be changed by his employer at a moment’s notice. He may be required to work only when required or may have set working hours. Casual employment involves very little commitment either way, from the employee or the employer. The employee can be dismissed from service by the employer without even paying for his notice period. In a similar way, the employee can also resign from his duties without giving proper notice. As a result, there is no provision of probationary periods in casual employment. Also, a casual employee, at times, can receive a higher ‘rate per hour’ as compared to a full-time or ‘on roll’ employee. However, he will not quite enjoy the same leave or travel entitlements as compared to full-time employees.
These days, casual employment contracts have become a preferred choice for companies to hire casual employees. Companies enter into casual employment agreements with employees and while offering employment, document the terms of employment applicable to them. A casual worker contract includes terms related to the place of work, compensation, working hours and so on. They also contain the obligations and rights of both the employee and the employer and other important terms related to non-disclosure of trade secrets, confidentiality clause, timely payment and so on. A casual worker agreement helps companies to ensure clarity and avail a safeguard in case of a possible dispute in the future. The employment contract for a casual employees also provides an effective mechanism for resolution of disputes in the future.
What are the benefits of a casual employment contract?
Certain benefits of an employment contract for casual employee are mentioned below-
- A casual worker contract is suitable when you want someone to work for you but you are not sure of guaranteeing him a regular working pattern or how many ‘work-hours’ you can offer him in a given week. In such a case, you can specify a minimum working hour per week in the employment contract, with a mention that the working pattern and the working hour may fluctuate beyond the minimum working hour that is offered in the contract.
- An employment contract for casual employees provides administrative convenience to an employer. It puts him at less risk in case there is an unfair dismissal claim made by a casual employee in the future. In the absence of such an agreement, it will be tough for an employer to prove his legal standing, should there be a dispute tomorrow.
- A casual employment agreement contains in writing that the engagement with the casual employee is by a purely temporary pattern, to suit a particular business need. Even though the employee is working in regular working hours, along with other permanent employees, the contract indicates that he does not have a permanent right as other ‘on roll’ employees. Setting such employment conditions in clear terms would help the employer to avoid any disputes in the future.
- With all the terms and conditions of employment in written form, a casual worker contract helps to manage the expectations of the casual employees. They come to understand the boundaries of their responsibilities and entitlements well in advance and this, in turn, helps the management to manage the working relationship with these employees.
What should a casual employment contract include? ( A checklist)
In general, casual employment contracts should include the following things-
- Job title and position- The job title and position for which the casual employee is hired should be clearly mentioned in the contract
- Duties & responsibilities- The contract should define the duties & responsibilities of the employee in no uncertain terms.
- Working days & hours- The normal working days and hours pertaining to the casual employee must be mentioned in the contract. Usually, the working hours adhere to the Shops & Establishment Act
- Salary or wages- The salary/wage to be paid to the casual employee should be mentioned clearly in the agreement. It may contain the hourly rate on normal days and also on holidays, if there is any. The casual employee cannot be paid lower than the minimum wage specified by the concerned Indian Labour Laws from time to time.
- Termination of employment- It is important even for the casual employment contracts to have a termination clause. The terms and grounds on which the casual employee can be terminated should be mentioned clearly in the contract. Employee termination comes under the purview of several employment laws in India. Therefore, we would recommend you to consult a service lawyer while including this clause in the employment contract.
- Confidentiality and non-disclosure- If the responsibilities and the duties of the employee put him in such a position where he comes to be aware of certain confidential information and/or trade secrets, it’s important for the contract to have an appropriate confidentiality & non-disclosure clause. In the event of more specialized employment that involves extensive disclosure of highly confidential business information to the employee, he may be asked to sign a separate non-disclosure agreement as well.
- General terms & conditions- These may include the obligations and rights of both the employee and the employer, penalty conditions and other important terms and conditions for casual employees.
How to enter into a casual employment contract?
In most cases, the casual employees go into an agreement with the employer as soon as they start working for him, irrespective of whether the contract is in written form or not. Just because you have not entered into a contract with the casual employee, it does not mean that you can avoid paying him. However, it’s desirable that you enter into the agreement with your casual employees as soon as possible. It will provide them a much-needed written statement regarding the terms and conditions for casual employees at the very beginning of their employment with you.
Please consider the following points while entering into an employment contract with your casual employees-
- Casual employees are entitled to ESIC, PF, etc. as prescribed by the relevant Indian laws
- There will be limitations of engaging casual employees in certain manufacturing processes
- Casual employees can be engaged for certain specific time periods only
- You need to maintain complete records of your casual employees as well
- The casual employees, under no circumstances, can claim for any permanent employment.
Frequently Asked Questions
No, he is not. However, it is a good idea to have a written employment contract with casual employees. Such a contract helps the employer to ensure clarity and avail a safeguard in case of a possible dispute in the future.
Well, it depends. In most cases, it is better to engage contractual employees. As they are usually engaged through registered manpower agencies, they will be more reliable and their responsibility will be shared.
Yes. All casual employees are entitled to receive Provident Funds compensation, ESIC, and other benefits as determined by relevant Indian laws.
9.1 Customer Score
We make your interaction with the government as smooth as possible by doing all the paperwork for you. We will also give you absolute clarity on the process to set realistic expectations.
With a team of over 300 experienced business advisors and legal professionals, you are just a phone call away from the best in legal services.
Access To Experts
We provide access to reliable professionals and coordinate with them to fulfill all your legal requirements. You can also track the progress on our online platform, at all times.
By handling all the paperwork, we ensure a seamless interactive process with the government. We provide clarity on the incorporation process to set realistic expectations.