Contracts in India

Overview by

Management of Human Resources



Method of Recruitment
Advertising, Employment Exchanges, Educational Institutions, Direct recruitment.
Recruitment Agencies
National Employment Exchanges (Public), Employment Agencies (Private), Labor Contractors (Private)
Recruitment Websites
The Directorate General of Employment and Training (DGET)
Central Employment Exchange, Delhi (a web-based private job site in India) (a web-based private job site in India) (a web-based private job site in India)
Careerjet (an employment search engine for India)

The Contract

Type of Contract
1. Permanent (more than 90%)
2. Temporary
3. Fixed-term
Breach of Contracts
  • Retirement
Several forms: general resignation, resignation for one’s own convenience, resignation by agreement, resignation by employee’s request, voluntary retirement, etc.
  • Dismissals
According to the Indian law, an employer has a right to terminate the services of an employee without giving a reason, though this position has been weakened through various court orders.

However, employees cannot be dismissed while they are on sickness leave or disablement leave or on maternity leave.

  • Other Possible Methods
Collective dismissals due to economic reasons, disciplinary dismissals, resignation as per the terms of contract.

Dispute Settlement


Conciliation Process

Cases of Dispute
Wages and allowance (21.5%), Personnel (9.4%), Indiscipline (41%), Bonus (3.5%), Retrenchment and lay-offs (0.6%), Charter of demands (7%), Work norms (1.1%).
  • Legal Framework
Under sec. 2(a) of the IESA, a worker dissatisfied with his or her termination of employment is entitled to raise the matter as a labor dispute with an officer from the conciliation department of the Ministry of Labor. The officer will attempt to conciliate the matter and must submit a report to the Government if conciliation fails, pending a decision from the governmental authority on whether the matter merits adjudication before the Labor Court or Tribunal
  • Procedure
The Industrial Employment (Standing Orders) Act (IESA), 1946, and the Industrial Disputes Act (IDA), 1947.

Judicial Structures

  • Legal Framework
  • Competent Legal Body
The Labor Court, Industrial Tribunal and National Tribunal.

Social Partners

Social Dialogue and Involvement of Social Partners
With some exceptions, India has company unions rather than trade unions. These are often affiliated with national labor organizations. Political parties promote various trade unions. The bargaining power of the unions is declining as the government pushes forward its reform agenda.
Unionization Rate
Although there are more than 7 million unionized workers, unions represent less than 25% of the workers in the organized sector (primarily in state-owned organizations), and less than 2% percent of the total work force.
Regulation Bodies
Ministry of Labor and Employment

Labor Bureau

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