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Individual Employment Agreement - Meaning & Definition

Published by MBA Skool Team in Human Resources Terms Last Updated: May 29, 2023Read time:

What is Individual Employment Agreement ?

Individual Employment Agreement is the contract between an employer and an employee under which an employee agrees to work for the stated remuneration. This type of contract binds between those two parties only. Individual Employment Agreement is legally binding which means if one party doesn’t stick to the agreement then other party can legally enforce the agreement through Employment Relations Authority.

Some employment conditions like minimum leave of 4 weeks per year, a minimum wage and gender equality etc. do apply for all agreements irrespective of their types.


Usually, such agreements are written agreements and thus reduces the risk of misunderstandings. Written agreement reminds about the rights and obligations between both parties which is retained by employer and made available to the employee on request. If employer doesn’t have the copy of signed agreement then a labor inspector can issue a 7 days’ notice to employer to rectify the issue. If employer fails to do so then he/she is liable for fine upto $10,000 (According to Individual Employment Agreement).

An Individual Employment Agreement covers following common things:

  • Job Description
  • Name of employer as well as of employee
  • Nature of Agreement (Full time or Seasonal)
  • Rights and Obligations
  • Location and work hours
  • Number of Holidays

Note: Based on the type of employment, the individual employment agreement gets modified.



Consider recruitment of new marketing manager for Pepsico. in India. The employer, Pepsico. , makes an agreement with new marketing manager such that employee is made aware of his/her remuneration, work time, holidays and other work related matters. This agreement works in favor of both employer and employee where nobody can default as this agreement binds legally.


Hence, this concludes the definition of Individual Employment Agreement along with its overview.

This article has been researched & authored by the Business Concepts Team which comprises of MBA students, management professionals, and industry experts. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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