EMPLOYMENT CONTRACT, POLICIES AND STOCK OPTIONS

We understand that it is challenging to keep pace with the employment laws and regulations, particularly for start ups and small and medium enterprises (SMEs). We assist employers to ensure that they have the right contractual provisions, policies and procedures in place to achieve their commercial goals and protect their business interests. Properly drafted employment contracts and staff handbooks are important from a human resource and risk management perspective. We don’t just hand over generic precedent documents; we provide tailored documents, prepared with our clients’ business and commercial needs firmly in mind. We guide our clients through the process of negotiating new contracts, varying existing contracts, and designing suitable policies and procedures for their employees.

We also represent senior executives and board directors to negotiate their respective employment contract/engagement letters with their prospective employers.

EMPLOYMENT DOCUMENTATION

Well drafted employment documentation helps an organization in minimizing the risk and cost of future disputes between employers and employees.

OFFER LETTER

An offer letter is the formal written document sent by an employer to a job candidate selected for employment. Companies may make job offers on email or in writing depending upon the policy of the organization. At Burgeon Law, we recommend that it is always a good idea to have a formal written confirmation to the offer so that both the employer and the employee are clear to the conditions of the employment. An offer letter typically includes details of employment including key responsibilities, designation for the position being offered, start date, compensation/benefits and equity incentive (if any).

EMPLOYMENT CONTRACT

An employment contract is an agreement between an employer and an employee that details out the rights and responsibilities of both the employer and the employee. Typically an employment agreement includes:

  • Work Schedule: This clause details the days and hours an employee is expected to work.
  • Duration of employment: Specifying the length of time the employee agrees to work for the company. Duration of employment might be an ongoing period of time to continue until terminated or it can be for specific duration.
  • Salary: Each employment contract should clearly spell out the salary offered and duly accepted by the employee.
  • General responsibilities:  This clause includes various duties and tasks an employee will be expected to fulfill while employed.
  • Confidentiality: This clause binds the employee to not disclose any information with respect to the company to any third party during and after the termination/resignation of the employee.
  • Benefits: This clause details all promised benefits, including, but not limited to, health insurance, vacation time, and any other perks that are part of the employment offering.
  • Non Compete: This clause binds the employee to not enter into jobs that will put him or her in competition with the company during and after a certain period of time of resignation/termination of the employee from the company.
  • Non-solicitation: Non solicitation puts a restriction on an employee of a company, to prevent him from soliciting the employees or customers of a company, during and post-termination of employment.
  • Intellectual Property: This clause provides that any and all intellectual property created during the course of the employment shall be owned by the employer.
  • Dispute Resolution:  Both the parties agree to a mode of resolution in case of a future dispute between the parties. Often an alternative mode of resolution for eg. arbitration or mediation is often included as a preferable mode of dispute resolution in employment contract.

HUMAN RESOURCE POLICY

At Burgeon Law, we understand that human resource (HR) policies and procedures are an important aspect of the workplace offering protection to employees, guidance to the management and ensuring due compliance with the government regulations and mandates. It is fundamental towards defining the work culture of any organization. A fair HR policy and framework has huge impact on employee, employer and the work culture of any organization. The human resources policy should be very broad so that it encompasses all of the major employment related concerns and further tailored to include those provisions that may be unique to the nature of the business involved.

Our services include:

  • To develop an easy to understand employee handbook customized to the requirement of the company and compliant with the applicable laws.
  • To address all current policies and practices of the company in the development/revision of the employee handbook.
  • To draft key company’s policies and procedures.

Proposed list of areas and topics to be included in the employee handbook includes : hiring practices, onboarding a new employee, terms of employment, appraisal and performance review, leaves and public holidays, benefits such as medical insurance, training and development, code of conduct, privacy, harassment and discrimination, grievance /complaint redressal mechanism etc.

  • GRANTING STOCK OPTIONS AND STRUCTURING EQUITY COMPENSATION PLANS

Burgeon Law has successfully designed Employee Stock Option Plans (ESOPs) for a number of companies at different stages.

ESOPs are perhaps the most important and effective tool for rewarding and incentivizing employees in addition to their salary compensation. ESOPs help in creating a culture fabric for the company where employees work with a sense of ownership enhancing their individual and group performances. Additionally, from an employer’s perspective (esp. for growth stage startups and SME’s) ESOPs allows them to attract good talent even though they can offer lower salary compensation.

ESOP is an employee benefit plan that gives the employee the right to purchase a certain number of shares in the company at a pre-determined price (typically face value or a discounted market price) after a pre-determined period. However, a company cannot just grant options by issuing a simple letter to its employees. We often see that many companies include ESOP’s as a part of the offer letter/employment agreement and do not structure and adopt a policy which leads to conflict with the employees at a later stage when they realise that no ESOPs were in fact granted to them under law.

A comprehensive Employee Stock Option Plan Scheme needs to be designed in compliance with applicable law that provides a detailed insight into the key terms and conditions related with ESOPs such as grant, vesting, exercise, transfer restrictions, taxation etc and adopted by the Board and shareholders of the company. Only pursuant to such adoption can the company grant ESOP’s to their employees.

At Burgeon Law, we can assist you to structure a customised ESOP plan for your employees. We typically brainstorm with our clients on important factors such as cliff period, treatment of vested shares on termination/resignation of employee, duration of exercise period, suitable vesting schedule etc. to design a policy that is in accordance with the requirements of your organization.