anand das (service) 08 June 2010

probation period for contract services ?

A company wants to utilize services of a person for a particular position say a manager/ public relation officer's position. But wants to first test the person and then execute a contract for 3-5 years only. How this can be practically done?

Is it ok if company issues an appointment letter with a probation period of 6 months treating his services on contract basis and then after the end of probationary period execute a contract agreement with the person for 3-5 years.

Note:- company wants to utilize the services only for 3-5 years and does not want to bind itself in employee and employer relationship.

Pls guide.

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2 Replies

Santanu Banerjee (abc) 04 August 2010

I have resigned from my previous job in a Limited Company and could not serve the required notice period due to some reason. As per my Agreement Letter the following was mentioned over there under Employment Head.

B. Employee will be on probation for a period of 6 months unless confirmed earlier. Upon satisfactory probation considering your work and conduct, may be confirmed in writing, in regular cadre of the company. The period of probation is extendible at sole discretion of the Management.

E. During probation at sole discretion of the company your services can be terminated without any notice whatsoever. You will be required to give 1 month notice in case you wish to leave the company. On confirmation either side will have to give 30 days notice, otherwise 1 months salary will be deducted subject to a maximum 3 months. For purpose of calculation of experience period in the organization the traineeship/ probation period will be taken into account. No leave shall be applicable during notice period. You are to get the clearance from the Director's, HR, Regional Manager and Accounts before leaving the company.

Now, my query is whether the above condition (condition E) is at all valid or not as during probation the company will not provide any notice period whereas the employee has to serve 1 month notice i.e., the clause is not same in either side.

Though I have completed around 8 months in the Organisation, the company has not serve any confirmation to me. Hence could this 8 months be taken as probation period as the company has not confirmed me in writing as per Condition B above.

I need expert's view and suggession on the above. Please Help.

sanjay kumar (BE/ LLM in Corporate Laws) 04 August 2010

Mr.Anand,

There can be various ways to meet the requirements but the only problem is that individuals cannot dictate their terms in the Service Contracts and the Contracts are generally written in favour of the companies/employers.

The simplest process can be that the company signs the contract with the person with the following conditions:-

1. Initial period of probation..say 06 months.

2. Primary Period of the contract thereafter..say three years.

3. Extended Period of the contract..say another 2 years.

But the problem is that such contracts are one sided and an individual doesnt have much say in terms and conditions.

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