Human Resource(HR) Agreements: Employees
Build a strong foundation of company culture, shared effectiveness and stronger relationship with your Founders, Employees, Shareholders and related stakeholders.

Overview

In a fast-growing world, we’re seeing businesses grow at a rapid pace. Businesses grow when the people building it are stronger. It’s the team which helps a business grow from an idea to an enterprise and beyond. Therefore, it’s highly imperative to build strong foundations right from the founders to the last-mile connection of a shareholder with the company. These relationships, once documented in the form of agreements, help in identifying, mitigating any potential risk, and bringing transparency with these resources. They usually cover agreements among founders, employees, contractors, consultants, shareholders, or any similar stakeholder in the company, and protects both the company’s and stakeholders interests.

Employee Contracts

The agreement to define a relation between the Company and its Employees. It covers clauses like remuneration, working hours, perks and entitlements, and other clauses, according to the type of Employee:

Full-Time Employment Agreement

For permanent employees on company’s payroll, with all perks and full-time obligations. This agreement includes working hours, responsibilities, work profile, remuneration, perks, benefits and other terms.

Part-Time Employment Agreement

Usually very similar to Full-Time Employment agreement, but usually is restricted to employee’s working hours and related pay. Now-a-days, organisations even consider a milestone-based approach for such pay.

Zero hours Agreement

For employees and employees with no obligation on the minimum number of work hours. In this agreement, the employer and employee mutually agree on all terms with a condition that neither is obligated to provide or accept work.

Consultancy Agreement

Usually used when an organisation hires an individual, who will not be termed as an employee of the company.  These consultants are usually not given the usual perks of the company like pension, PF and related services.

Secondment Agreement

When an employee is employed by another organisation and is deployed or loaned to another organisation, it is called secondment agreement. Here, the employee remains employed with original employer but works for another company.

Founders’ Agreement

Covers the relationship among founders, covering responsibilities, ownership, investment, vesting and related terms. It’s advised to make this at the incorporation stage of the startup.

Volunteer Agreement

Volunteers offer their skills or labor to organisations in return for no pay. This is usually done in public or philanthropic initiatives. A volunteer agreement helps in establishing a difference between employee and volunteer.

Other contracts

HR Employees may be used in multiple places, to suit both the organisation and concerned person’s needs. These include having Term Engagements, Annualised Hours agreement, Work contract, Director’s Service contracts and other related agreements to suit the organisation’s needs.

FAQs
If I make a Zero hour contract, is this legally enforceable?

Yes. The Zero-hour agreement is legally applicable and binding, like all other agreements. However, with especially zero-hour agreement, the exclusivity clause isn’t valid. This agreement cannot bind the individual from pursuing other pursuits like other employment, higher education etc.

Why is it important to have an employment agreement?

An agreement gives a strong base for better relationships between employee and employer. With this, both parties have expectations and obligations towards each other. For employees, they will be entitled, and protected if the business does not pay accordingly in the court of law.

How do we assess whether someone is an employee or not?

To define and establish an employer-employee relationship,:

  1. the existence of a contract should be there;
  2. the work is done in person;
  3. the mutuality of obligation exists; and
  4. there should be control over the work that the individual is doing
How employment agreements are made?

Usually, these agreements have a set of terms, which needs to be molded to suit the organisation’s benefits and structure. Suitable to your industry and scale, a legal counsel is appointed who discusses and understand these requirements, build a personalised structure for your company and creates these agreements, as required.

Employment agreement isn’t mandatory. Why do I need to make it?

Although not a legal requirement, these agreements are an asset to set out the entire relationship for two main reasons:

  1. To avoid any misunderstandings and potential risk
  2. Managing expectation, setting terms of entitlements and responsibilities.
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