India: Appointment Of Employees

Last Updated: 10 December 2013
Article by PSA


Overall, in the selection process of a suitable candidate for employment, CV/profile plays a crucial role in (i) creating the first impression about the person; (ii) screening the right person for the job and (iii) selecting the person who can be interviewed. Eligibility and suitability of a candidate for a specific post is identified after screening and interview. This process, though sounds simple, involves a lot of meticulous actions at every step and involves selection of only white collar employees. It is crucial to understand that the Indian laws make a distinction between an "employee" and a "workman." A workman is any person employed in an industrial premise where a manufacturing process is being carried on or in any kind of work that is connected with such manufacturing process and are not part of managerial or supervisory functions. Employees are the white collar involved in the managerial and supervisory functions and have a contractual basis of employment. The process of hiring an employee and a workman may be different and that solely depends on the skill sets and designation that the company is looking for.

This bulletin tries to explore the process involved in the appointment of employees, the crucial considerations that company should keep in mind while initiating the appointment process and finally, what crucial provisions should ideally be there in an appointment letter.

1. Modes of hiring

There are several modes by which companies hire employees. The most common is engaging head hunters who are given a mandate to provide the most suitable candidate for the vacant post in the company. The onus of verifying the credentials of the candidates is also on the head hunter firm before suggesting the candidate to the company. However, it is crucial that any such arrangement between the company and the head hunter firm should be on the basis of a written agreement. Such an agreement should specifically provide for, among other terms, the roles and responsibilities of the head hunter firm, the expectation of the company and consequences of the breach of the above expectations. Head hunting firms also offers the services of doing a complete verification of the information provided by the candidates. Though this would be useful for the company; however, it would always be prudent to cross examine the credentials at the time of interviews and retain copies of the qualification certificates, wherever necessary. Giving advertisements in newspapers is another classical way of hiring people. Currently, the companies are also engaging the services of job portals. While doing so, the scope of negotiating the agreement has become restricted and companies have to essentially enter into a clip wrap agreement to hire the services of the job portals. Irrespective of the mode opted by the company, it should keep the following points in considerations while recruiting employees:

(i) Providing precise job details – job description, key skill sets required, and responsibilities assigned to the said post;

(ii) Providing the exact qualifications and experience requisite for the said post;

(iii) Providing complete clarity on reporting requirements and place of work;

(iv) Highlighting the qualities that would suit the company;

(v) Doing a complete background check.

2. Recruitment

While recruiting employees, companies should ask them to fill a simple application form, which should consist of the following crucial ingredients for the purposes of screening:

(i) Details of education qualifications with specific scholastic performances;

(ii) Finding out the financial needs of the candidate by seeking information on dependents and responsibilities;

(iii) Medical examination would be conducted generally once the candidate signs the offer letter, but he/she can be asked to provide the medical condition;

(iv) Details of the experience of work;

(v) How active is the candidate on social networking sites and may be seeking the link for his professional networking site or any blog or personal website;

(vi) Seeking details of publications (depends on industry type);

(vii) Seeking references from the relevant field.

The second step would be conducting exhaustive interview both at the HR level as well as at the specific department level to confirm whether the candidate suits the profile and would be able to perform and do justice to the said post. The interview should be conducted after scrutinizing the profile/CV submitted by the candidate. The first thing to verify in the profile/CV is to confirm whether the applicant meets the minimum criteria in the specifications for qualifications and experience. It is also important to understand how the educational qualification and work experience of the candidate indicates achievements and progression. Gaps in job years and frequent hopping have been well covered or raise suspicion and whether it seems convincing. Finally, it is also vital to see how the candidate has presented the information, whether it is legible, correct in form and substance, misleading, coherent, verbose and careful and efficient drafting. This would suggest a lot about the personality traits of the candidate.

3. Appointment letters

An appointment letter sets out the terms and conditions of employment including designation, place of work, job profile, leave, termination, salary details, confidentiality, etc. A well drafted appointment letter is critical as it may contain elements to respond to the probable issues that may arise between employer and employee during the course of employment. The crucial elements of an appointment letter constitute the following:

i) Name and address of the employee, including the permanent address. This information can also be a part of the adult register maintained under the Factories Act;

(ii) Designation of the employee and place of work based on the organizational set up of the company and the classification prescribed in the standing order (which is certified by the relevant certifying authorities and such certified conditions prevail over the terms of contract of employment. So, conformity with the certified Standing Orders is critical while evaluating the conditions and terms of employment of the workmen). Transfer of employee should be clearly indicated as the right of the company;

(iii) Salary details with all allowances, bonus and benefits per the company policy and as statutorily available;

(iv) Probation period, its extension, confirmation and termination;

(v) Training period should also be mentioned with details regarding the nature of training to be provided;

(vi) Employment period with age of retirement;

(vii) Confidentiality clause restricting the employees not to divulge the confidential and proprietary information of the company to any third party, including the trade secrets, business plans, customer information and business or company information;

(viii) Termination clause setting out the various reasons for termination like, for breach of employment terms, indiscipline or non performance, etc;

(ix) Consequences of termination should clearly provide for the action steps to be completed immediately upon a termination/resignation of the employee, like handover of company property, etc;

(x) Medical examination by a registered medical practitioner is sometimes a prerequisite to confirming the employment in certain companies and that should be clearly provided for;

(xi) The appointment letter should prohibit double employment and also any personal practice or business;

(xii) IPR is an important clause and employer should ensure that there is a clause which assigns the IPR created/developed by the employee during the course of employment to the employer;

(xiii) The letter should also refer to the company policy document and the candidate should be made to agree to adhere to all the service conditions mentioned therein;

(xiv) The reference to the conduct of employee should be made and be clearly indicated that any misconduct/fraud during the course of employment would make the employee liable for suspension/dismissal;

(xv) The letter should put an obligation on the employee to inform the Company in case it has any conflict of interest in any area of operation or project and shall refrain from performing services for such conflicting area;

(xvi) The letter should also contain a clause asking employees to neither directly nor indirectly compete with the business of the company during the term of the employment.

The greatest resource of a company is its human resource. So, their selection process should be meticulously formulated and HR should be vigilant in scrutinizing every candidate vis-ŕ-vis the job profile for the said post. Recruiting candidates of the desired type and selecting the most suited candidate calls for intelligent planning and preparation. The above processes contain the optimum action steps and the considerations that the organization should keep in mind while offering employment to candidates. The recruitment should not be hurried and company should exercise sufficient patience and diligence in the process. The right candidate may also become an asset for the organization in the days to come.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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