The Probation Period With No Fixed End Date
Standard employment contracts in India often state a probation period of three to six months. What many don't state is the condition under which it ends. Some contracts include language like "probation may be extended at the discretion of management" with no cap on how many times that extension can apply. During probation, most employers are not legally required to follow the same termination procedures that apply to confirmed employees under the Industrial Disputes Act, 1947. A probation period without a defined maximum duration is not a trial period. It is indefinite at-will employment dressed in polite language.
The Moonlighting Clause That Bans Freelance Work Entirely
Many IT and services contracts include a clause prohibiting "any other employment or engagement" during the term of your contract. Read that carefully. Some versions of this clause do not limit the ban to competing businesses. They prohibit all paid work outside your primary job, including freelance graphic design, weekend tutoring, or a family business you help manage. Chanakya wrote in the Arthashastra that a man who does not know the terms of his agreement has already surrendered his position. The moonlighting clause is where that principle bites hardest. Violation can be grounds for immediate termination without notice pay.
The Notice Period That Only Runs One Way
A 90-day notice period looks symmetrical on paper. The company must give you 90 days. You must give the company 90 days. In practice, many contracts include a "garden leave" provision that allows the employer to waive your notice and pay you out, while your clause requires you to physically serve the full period or pay a penalty in lieu. That penalty is sometimes calculated at your gross monthly salary, not your basic pay. On a senior salary with allowances, the difference between gross and basic can be 40 to 60 percent. The clause looks equal. The financial exposure is not.
Intellectual Property Assigned Before You Walk In the Door
A standard IP assignment clause transfers ownership of any work you create "in connection with your employment" to your employer. Some contracts extend this to work created "using company resources", which, if your laptop connects to the office Wi-Fi even once, potentially includes personal projects developed at home. A narrower version of this clause is legitimate. The version that reads "any invention, design, or creative work produced during the term of employment" with no qualifier on relevance to the job is the one to push back on before signing. Once signed, the assignment is typically irrevocable.
The Non-Compete Clause With a Geographic Radius
Indian courts have historically been reluctant to enforce post-employment non-compete clauses, viewing them as restraints of trade under Section 27 of the Indian Contract Act, 1872. However, "historically reluctant" is not the same as "will not enforce." Courts have upheld non-competes where the employer can demonstrate that the clause protects a legitimate proprietary interest and is reasonable in scope. A clause that bars you from working in your field within a 50-kilometre radius of any city where your employer operates for 12 months post-resignation is not automatically void. It will cost you legal fees to challenge it, and your new employer may not want to hire someone with an active dispute in the background. The clause is a deterrent even when it is unenforceable.
Salary Structure That Shifts CTC Into Non-Cash Components
The Cost to Company figure in your offer letter is not your take-home salary. Most Indian professionals know this. What fewer read carefully is which components of the CTC are discretionary. Some contracts include performance bonuses, joining bonuses with a clawback clause, or meal and transport allowances that are paid only if you are physically present in the office on a qualifying number of days per month. A joining bonus with a clawback provision typically requires you to repay the full amount if you resign within 12 to 24 months. That repayment is often deducted from your full and final settlement, which means your last month's salary, leave encashment, and gratuity are all at risk. Read the clawback clause before you spend the bonus.
The Termination Clause With a Conduct Carve-Out
Most employment contracts in India include a clause that allows termination with notice or payment in lieu of notice. That is the standard. The clause to find is the one immediately below it: termination "for cause" or "for misconduct," which typically requires no notice and no payment. The definition of misconduct in many contracts is left deliberately wide. "Actions that bring the company into disrepute," "breach of company policy," and "conduct unbecoming of an employee" are phrases that can be applied to a critical LinkedIn post, a complaint raised internally that later becomes public, or a social media comment made on a personal account. Termination for misconduct also affects your gratuity eligibility under the Payment of Gratuity Act, 1972, if the misconduct resulted in damage or loss to the employer. The conduct carve-out is not a formality. It is the clause that makes every other protection in your contract conditional.
Every red flag in this list appears in contracts that lawyers have reviewed and HR teams have approved. They are not errors. They are choices. The professional who reads before signing is not being paranoid, they are doing the one thing the contract was drafted assuming they would not do.
