Why Written Employment Contracts Are Important For Your Business

By Perminus Wainaina  

Did all your employees sign employment contracts?

An employment contract is a legally binding agreement between you as an employer or manager and an employee. It is designed to give both parties security and protection.

This is a very important aspect of the hiring process; a well-drafted employment contract can save your organization a lot of money.

Here are some reasons why employment contracts are a must-have for your business.

Provides a clear understanding of employee duties

A good employment contract will clearly state the duties and responsibilities of the employee.

Knowing exactly what is expected of an employee will ensure that there is no room for confusion and will also make it easier for you to monitor performance.

This will then protect your business when you have to let go of an employee for underperforming.

It is very difficult to deal with conduct or performance issues if the employee can argue that they were never informed of their duties.

For example, if an employee takes you to court for termination, in order for you to prove that they were fired because of not meeting expectations; you need to have a signed contract that clearly states what was expected of the employee and how they failed to meet those expectations.

Will help you avoid pay disputes

An employment contract usually has details on the pay for the employee you are hiring. It also includes details on how pay increases work in your organization as well as if they are entitled to any commissions.

All this information is important because having a written agreement with your employee on when they can get a salary increase as well as the percentage increase they are entitled to, will help prevent future confusion and dispute when it comes to salary.

It will offer you and your business protection

An employment contract can also protect your business as it regulates the behavior of the employee in the workplace.

Some employment contracts have a confidentiality clause or a non-compete clause that ensures that the employees don’t give out secret information concerning your business operation.

Key elements of a solid employee contract

1. Terms of Employment
2. Employee Responsibilities
3. Employee Benefits
4. Salary information
5. Termination

See here a detailed description of what every good employment contract should have.

In Conclusion,

You should never hire an employee without having them sign an employment contract. It is a sure way for you to protect your interest as an employer as well as the interest of the employee.

Keep in mind that every employment contract is different, and as an employer, you need to do what is best for you and your organization.

To add value to your growing business Corporate Staffing helps firms stay on top with the best HR practices. We offer HR outsourcing services to local and foreign companies, where we handle HR tasks such as issuing of employment contracts on behalf of your organization.

For more information on Human resource outsourcing, contact our Client Service Manager Muthoni Ndegwa at muthoni@corporatestaffing.co.ke and copy Perminus Wainaina at pwainaina@corporatestaffing.co.ke