What Clauses Should Be In Every Employment Contract?

An employment contract is an agreement between an employer and employee and is the basis of a further employment relationship. A contract of employment regulates the terms and conditions of employment between employers and employees.

A good employment contract will, therefore, make it crystal clear what exactly the parameters of the role are and what an employer’s expectations are.

There are certain clauses that employment contracts should contain. They are:

1. Terms of Employment

Depending on the type of employment contract, it could either be an open-ended or fixed term. Many contracts of employment are open-ended and as such, an employee is hired for an indefinite period. However, under the fixed-term contract, employees are hired for a definite period. Under this, the contracts mention a definite end date.

2. Employee Responsibilities

A good employment contract should clearly define your employee’s role and responsibilities. These should be specific and should match the description for which the employee applied.

A contract that has other duties outside of what was agreed on during the interview, should therefore not be presented. If additional responsibilities come later, the employee will be required to sign another contract after you, as the employer, give them a new job description. 

3. Employee Benefits

Benefits range from company to company depending on how much you can offer your employees. Spell out what benefits are offered, including health, life, or disability insurance, or retirement accounts. 

4. Salary information

Beyond the salary, is there a policy when it comes to raises and bonuses? For example, do you review salaries annually? Is there a standard protocol for raises? Be sure to point out discretionary compensation based on performance.

Details of the salary should be included in the employment contract, along with the date that one will be paid. The contract may also include information relating to deductions from pay. This clause should outline the circumstances that may arise in which deductions may be made.

5. Termination

This part of an employment contract that indicates when a job may be terminated is perhaps the most important of all.

Employee contracts should state the reasons and grounds for termination, and should also point out any notice requirements. Keep in mind, however, that not every employee is required to give two weeks’ notice.

In Conclusion, 

 Each business has different needs, so it may be best to consult experienced experts to develop sound employment contracts that have you covered.

Would you like to get more information on employment contracts? Do you need assistance in drawing up and assessing a contract? Would you like to know whether a situation violates the agreed conditions of employment? Get a FREE Employment Contract Consultation here.