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Free agreement template · Word

Fixed-Term Employment Agreement

A fixed-term employment agreement engages an employee directly for a set period that ends automatically on a stated date. Under the Labour Codes, fixed-term employees are entitled to the same hours, wages and benefits as permanent staff doing similar work, so the agreement should state parity clearly.

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[Highlighted] = fill in
[Company Logo][Company Name]

FIXED-TERM EMPLOYMENT AGREEMENT

Ref. No.:
[Reference Number]
Date:
[Date]

This Agreement is made on [Date] at [City] between [Company Name], [Company Address] (the "Employer") and [Employee Name], [Employee Address] (the "Employee").

1. Engagement and Term

1.1 The Employer engages the Employee as [Designation] for the purpose of [Project / Reason for Fixed Term].
1.2 The term starts on [Start Date] and ends automatically on [End Date] (the "Term") unless ended earlier under Clause 7 or extended under Clause 8.

2. Duties

The Employee shall perform the duties listed in Schedule A under the supervision of [Reporting Manager] at [Work Location].

3. Wages and Parity

3.1 The Employee shall be paid a monthly gross of ₹[Amount] as per Schedule B.
3.2 The Employee's working hours, wages, allowances and other benefits shall not be less than those of a permanent employee doing the same or similar work.

4. Statutory Benefits

PF, ESI (if eligible) and gratuity shall apply in line with the Labour Codes. Gratuity, where payable, will be calculated in proportion to the service rendered during the Term.

5. Leave

Leave will accrue on a pro-rata basis for the Term as per the leave policy. Unused earned leave at the end of the Term will be dealt with as per policy and law.

6. Confidentiality and Conduct

The Employee shall keep all project and business information confidential and follow the Employer's code of conduct and POSH policy.

7. Early Termination

7.1 Either party may end this Agreement before the end date by giving [Notice Period] written notice or wages in lieu.
7.2 The Employer may end it without notice for proven misconduct after a fair inquiry.

8. Expiry and Extension

8.1 Employment ends on the end date without further notice and without any claim to permanent employment.
8.2 Any extension must be agreed in writing before the end date.

9. Final Settlement

All dues will be settled within [F&F Days] days of the last working day after return of company property.

10. Governing Law

This Agreement is governed by Indian law and courts at [City] have jurisdiction.

For [Company Name]
[Authorised Signatory]
[Designation]
Employee
[Employee Name]
Signature: ____________
Date: [Date]

Witnesses:
1. [Witness 1 Name] ____________
2. [Witness 2 Name] ____________

What this template includes

  • Exact start and end dates so the term is not open-ended
  • Parity clause on wages, hours and benefits with comparable permanent staff
  • Gratuity treatment for fixed-term employees as per the Labour Codes
  • Automatic expiry with no notice required at end of term
  • Early termination clause for either side
  • Renewal only by written extension

When to use it

  • Project roles with a known end date, such as a client implementation
  • Seasonal peaks in retail, logistics or manufacturing
  • Maternity or long-leave cover
  • Funded programmes where the grant has a fixed duration

How to customise this template

  1. 1Enter the project or reason for the fixed term
  2. 2Benchmark pay against a permanent employee in the same role
  3. 3Confirm gratuity treatment with your payroll or legal adviser
  4. 4Set a reminder 30 days before the end date to decide on renewal

HR tips

  • Do not use repeated fixed terms to fill permanent roles; it can be challenged
  • Pay the same allowances as permanent staff in the same role
  • Issue an end-of-term letter and settle dues promptly
  • Mention clearly that the term ends automatically

This template is a starting point only, especially the fixed-term employment provisions of the Labour Codes and the rules notified for your state. Review it against applicable labour laws (including the Labour Codes in force from 21 November 2025 and the state rules being notified), your Shops & Establishments registration, standing orders and company policies, and take advice from a legal adviser where needed.

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Frequently asked questions

Are fixed-term employees entitled to gratuity?+

The Code on Social Security provides gratuity for fixed-term employees on a pro-rata basis without the five-year condition. Confirm the applicable rules with your adviser.

Is notice needed when a fixed-term contract ends?+

No notice is generally needed when the term expires on the agreed date. Early termination before that date should follow the notice clause.

Can a fixed-term agreement be extended?+

Yes, by a written extension signed before expiry. Repeated extensions for an ongoing role may suggest the job is really permanent.