employment contract

jumpingjamie

Hi, I work for a development agency based in UK. We have been contracting work to an independant consultant and wish to make this position more permanent. Applications have been lodged to set up an office in Chennai and I am in the process of drafting a contract of employment. We are a small charity and do not really have much funding for expensive contract lawyers so am looking for any help anyone could offer regarding this? What are the critical things to be included? What is 'normal' regarding holidays, bonuses and other entitlements?

Thanks in advance for any help you can offer.

Jamie

federica

Hi Jamie, maybe you can get in touch with Rob of http://www.childrenwalkingtall.com. He runs a charity in Goa.

Raghu.Kumar

Hi Jamie,

I assume the person getting the contract is a local person ( Indian ) If yes, then most of the issues like Employment Visa, Home Leave Travel. Overseas Medical Insurance etc would not arise.

India has a unusual number of holidays that comprises of festival and statutory holidays.

26th Jan ( Republic Day ) 1st May (May Day ), 15th Aug. ( Independence Day ) and 2nd October ( Gandhi Jayanthi ) The above four falls under statutory holidays. Usually companies allow 8 to 10 holidays in a year. Apart from the four statutory holidays, the company reserves the right to choose the remaining 4 or 6 festival holidays that is common to the particular state.

Apart from the above, an employee should be given a Previlege Leave or Earned Leave, say about 21 days in a Year. Casual Leave of about 5 to 7 days in a Year and Sick Leave in the same proportion. For long term sickness, the company can take a call based on the doctor's recommendation, to permit the employee to go on leave with pay.

A minimum of 8.33 % on the basic pay should be given as Bonus. Anything over and above is discretionary and can be termed as performance bonus and all bonuses are taxable.

Conveyance up to 800 INR is non taxable and can be given on getting a declaration from the employee.

Vehicle maintainance ( fuel and driver ) , Telephone Expenses ( mobile and landline, ) can be paid up to 60,000 Per annum on submission of bills, which would then become tax free.

Since, it would be only a one man show, no Provident Fund contribution is required. However you may consider adding 12% of the basic pay to the salary and pay the same each month, so that employee does not feel he is taken for a ride.

A Medical Insurance for the employee and his family for a coverage up to 3 lakhs would be considered reasonable.

I hope this helps.

Raghu

__________________
S.Raghu Kumar
sahana_kumar@yahoo.com

jumpingjamie

Thanks Federica, I will drop him an email today. And thanks so much Raghu for that comprehensive explanation of employment law, there were a few bits there which I was unclear on, so thanks. Yes, he is an Indian national which does make my life a 'little' easier.

Cheers

Jamie