An employee is a person employed under a contract of services and is subject to

labour laws including the minimum wages. Instead, if a person is not an employee
under the labour laws, he is regarded as an independent contractor. So it is
important to identify the difference between a contract of service and contract for
service.
Alright the first point was, in Contract Of service there has an employer-employee
relationship and in Contract For service there Has a client-contractor type of
relationship. Ok means A contract of service is an agreement that is entered into by
the company with an individual for availing their services. So The individual here is
the employee of the company and is entitled to the benefits that the employees of
the company receive or are entitled to from time to time during the course of their
employment. So here The company control over the work created by the employee
and the employee is bound to follow the orders of his employer. That’s y we said
there is an relationship between the employee and employer in contract of service.
While A contract for service is an agreement that is entered into by the company with
a third-party for availing its services. The third-party is an independent service
provider, not an employee of the company. The third party is not entitled to the
benefits that the employees of the company receive or are entitled to from time to
time during the course of their employment. So here we u can understand why we
said contract for service has type of relationship between client and contractor.

Next, Contract Of service is Covered by the Employment Act and contract for service
not Covered by the Employment Act. Ok why. Because When it comes to
determining the terms and conditions of employment, there is no statutory minimum
for any benefit to speak of. It is for the employee to negotiate for their terms and
conditions of employment subject to their bargaining position and the existing
practices of the prospective employer. So, Once the terms and conditions are agreed
upon, they become a part of the Contract of Service which is Covered by the
Employment Act),

Ok next point was in Contract Of service, Employee does business for the employer
while in Contract Of service Contractor carries out business on their own account.
Ok means in terms of contract of service the employee is made to undertake the
promise to follow the company policies, timing, regulations and other codes of ethics
for the duration of time he is hired include the employee must worked for achieve the
company goals and target, while in contract for service, in basic terms, this contract
is a contract between two entities that binds them together for a definite period of
time, for specific goals or objectives. So this contract is as understood by both
parties, is for only temporary purpose. So the contractor or the particular person is
obviously not required to follow the policies, terms regulations of the organization.
Similarly we can say that the person is not functioning towards the greater objectives
of the organization. They are hired only to fulfil or complete a small segment or
portion of the business.
And the last one ofc in employer-employee relationship they including the terms and
conditions of employment. This contract must include key employment terms (KETs) and
essential divisions or parts, such as working hours, leave benefits, job scope and etc while
there is not apply Statutory benefits in contract for service.

Ok finally, Why is it important to differentiate between the two types of contracts? Because
It will determine the legal position of the worker. This legal position includes in terms of
liability, the law applicable and preparations for the parties.