Permanent Employment Contract

Overview of Permanent Employment Contract

Hiring is a critical process for any organisation, from finding the right person to completing the protocol of enrolling them into your organisation's ecosystem. It becomes essential for the human resource management team to follow the right procedure so they don’t miss any pointers.

One of the important aspects that they need to oblige is to have an employment contract. There are different kinds of employees in the organisation. They are

• Fixed term employees
• Permanent employees
• Casual workers

Permanent employment is the most common, but every organisation must have a contract for their employees. This standard employment contract covers all aspects of employment, such as the date of hire, designation, salary benefits, retirement, and so on.

Before we move further, different types of contract employee agreement and what exactly is an employment contract is explained below.

What Is an Employment Contract?

It is a contract between an employer and employees that contains all the rights, duties, responsibilities, employment conditions, etc., that make up the legal relationship between the employer and employee. It contains different terms and conditions which legally bind the employer and employees.

Key Features of Permanent Employment Contracts

The regular employment contract must cover all aspects mentioned in Section 1 of the Employment Rights Act 1996. It includes the following:

• Name of the employer and employee
• Date of start of the job
• Wages or salary details
• Hours of work
• Sick leave
• Retirement policy
• Notice period
• Place of work
• Job role and KRA
• Additional benefits like perks, special allowances, commission, etc.
• Post-termination restrictive covenants like poaching clients or staff, joining competitors, etc.

Benefits of Permanent Employment Contract

The benefits of a permanent employment contract are as follows.

• The employee gets job security and certainty
• The employment contract contains detailed information about the job role, designation, etc
• The permanent employee is subjected to benefits like insurance policies for health, accident, death, dental, life, etc
• Job advancement is also an assurance that comes with the permanent employment contract. A certain minimum increment is given to the employee, which is mentioned in the employment contract.

Checklist of Permanent Employment Contract

A permanent employment contract is not just an ethical requirement, but it’s a legal requirement that every organisation needs to fulfil when they are hiring permanent employees. Here’s a list of checklist that needs to be included in the permanent employment contract.

• Name of the employer and the employee
• Address of the employer
• Place of work of an employee
• Designation or title of the job along with job description, KRA, and designation
• Date of commencement of employment
• Information about salary and other benefits available to the employee:
• Salary or wage of the employee
• Overtime (if the applicable)

• Method of payment and wage calculation
• Additional benefits
• Pension scheme

• Type- Permanent
• Notice period in case the employee is terminated

• Number of hours of work per day
• Alternative work schedule
• Definition of overtime
• Staffing
• Meal and rest period
• Timekeeping and attendance requirements

• Annual leave entitlement
• Conditions related to taking leave
• Sick leave and other paid leaves

• Details of disciplinary procedures followed in the country
• Conditions under which the employer can terminate an employee

• Definition
• Employees' right to union representation
• Permanent employment contract contains the explanation of each step of the grievance procedure

• Responsibilities of employee and employer
• What safety measures are there in the organisation and what protocol the employee must follow

• Details of a confidentiality agreement
• Use and misuse of electronic communication and the internet

• Purpose and definition
• Benefits that employees will get as per the permanent term employment contract

• Criteria for evaluating performance
• Retirement Policy
• This part of the contract mentions the retirement policy followed by the employer

• Provision of uniform for employees

• The employee agrees to the pointers mentioned above and other conditions specified by the employee. Make sure that you read the terms and conditions of the contract thoroughly.

FAQs on Permanent Employment Contract

Why Vakilsearch?

With the help of experienced lawyers and chartered accountants, Vakilsearch can draft you the perfect permanent employment contract. It can be customised as per your organisation. Our pricing is reasonable compared to other legal service providers. With us, you won’t have to worry about the process since you can keep track of the status at every stage. We will be completely transparent throughout the entire process. If you have any queries, our customer support team will resolve your doubts.