There are several issues that an employer needs an employee to understand once the company decides to take the latter under their wings. Employees must have a thorough knowledge of their role in the organization and what they should follow before they agree to take on the job offer. An employee contract does this best by providing a comprehensive, detailed outline of all employment-related policies. It also serves as a useful reference when reviewing rules and understanding an organization’s process of addressing different issues.
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What Is an Employment Contract?
An employee contract is a written agreement containing all the responsibilities and terms between an employer and an employee. It’s a legally binding document given to a candidate upon joining a company. It outlines all conditions, policies, and obligations the involved parties have to satisfy. It also provides details on what benefits an employee is entitled to receive and what prohibitions they should heed.
How to Make an Employment Contract
Among the reasons why employment contracts are important includes their role in providing solutions to workplace disputes. It provides methods for settling misunderstandings between involved parties instead of spending a dime on lawyers and courtroom sessions. It also ensures that an employer-employee relationship pans out smoothly, setting clear guidelines on termination, employment terms, and obligations.
Here are the basic steps on how to make an employment contract:
Step 1: Define the Job Details
One of the things employees inspect in their contracts is their job description. They must know what their company expects from them. It also helps them make sure that their employers ask them to do what their job title entails. This part of the contract should have a detailed account of a position’s functions, the department they’re part of, and the work schedule.
Step 2: Define the Employment Term
The contract term refers to the length of employment on whether the job is contractual, project-based, part-time, probationary, casual, or apprenticeship. Basically, this tells what kind of employee the hired candidate is going to be. It clarifies whether they’ll be working permanently or temporarily in a company. Include the start and end dates of the employment if it’s a fixed-term contract. If it’s a permanent job contract, indicate that the contract goes on until one of the parties decides to terminate it.
Step 3: Specify the Compensation Details
Besides the details about their roles and duties, employees would also want to look at their compensation details. This section should have thorough information on the salary schedule, total monthly payslip, overtime pay, insurance benefits, allowances, incentives, and bonuses. This helps avoid confusion and misunderstandings on the employee’s part when seeking to inquire about their pay.
Step 4: Apply Necessary Legal Clauses
If you want to safeguard your company’s interests and protect your internal affairs from exploitation, consider the importance of attaching legal clauses to your standard employment contract. This includes adding a non-compete agreement, non-disclosure agreement, and a confidentiality agreement, among agreements.
What are some disadvantages to using an employee contract?
Among the disadvantages of using an employee contract is it limits both the employer and employee flexibility. They both need to agree to the contract’s terms and conditions. There’s a need to negotiate and go through a process whenever one party wishes to change something in the document.
What elements should be in an employee contract to make it valid?
In any contract, the following should be valid to make it valid:
- Mutual assent
Do all contracts need a notarization?
Generally, contracts don’t need to be notarized to make it legal.
Building a good employer and employee bond within the bounds of professionalism contributes to their working relationship’s efficiency. An employment contract provides all guidelines they need to help them understand their tasks, rights, and responsibilities towards each other and the company. Our employee contract templates are ready for you. Download now!
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