Subject to a social security agreement between India and other nations, Indian employment laws essentially cease to apply once an employee is deputed to a client’s site abroad. This also means that any agreement signed by the company and the respective employee becomes null and void the moment an employee leaves Indian shores. For this purpose, companies now-a–days, execute what is known as a contract of guarantee or guarantee contract. A guarantee contract or contract of guarantee is signed between the company and parents or blood relatives of the employee who is being transferred overseas, usually at company’s client’s site. What this does is that it immediately transfers the liability for fulfillment employee’s obligations towards the company to signatories of the guarantee contract. Should the employee be in breach of his employment agreement, the blood relatives are made liable for the said breach. One can view a sample guarantee contract hereunder and order one for your HR, business or personal needs. Guarantee contracts can also be used in other situations.
