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Employment Agreement

An employment contract is a signed agreement between an individual employee and an employer. It establishes both the rights and responsibilities of the two parties: the worker and the company. The contract covers specific aspects of employment. These include wages, health insurance benefits, pension benefits, bonuses, promotions, and termination.

The employment relationship must be memorialized in a document signed by the employer and employee setting forth the terms and conditions of the relationship. Not only will this document be an important part of defending any future litigation, it may well prevent such problems by clarifying the expectations of both parties. These include wages, health insurance benefits, pension benefits, bonuses, promotions, and termination.

The parties can negotiate these provisions before employment begins. This allows the employment relationship to proceed without either party having to address issues later on. Having an agreement in place fosters cooperation going forward. This is because the terms of the agreement are binding and cannot be unilaterally revoked or changed.

Benefits For Employers

The main advantage of having contracts of employment in place is to reduce the risk of future claims by employees. By ensuring both parties (employer and employee) are in agreement to the terms and conditions, which are then signed, this binding contract serves to reduce the chance that one party will have grounds for legal action later down the line.

For roles which involve the handling of sensitive or confidential information, a contract of employment will further protect this. A confidentiality clause will ensure that the sensitive information, which could be valuable to competitors is not leaked. Furthermore, the employee will not be able to use this information should they wish to compete with you.

Employers may utilize employment contracts as a way to ensure that their most qualified talent is bound by the terms of a contract, which will be a deterrent to employees leaving the company and an advantage to the contract.

Employment contracts can also incentivize highly skilled employees to join your company. The prospect of having a contract can ensure greater stability for the highly skilled employee. These employees may have other job offers, and a contract with appealing turns could lure top talent to your company. Lastly, the presence of an employment agreement will provide the employer with greater control over the work being done by the employee subjected to the contract provisions.

Benefits For Employees

A contract limits the employer’s ability to terminate employment early or as per his sole discretion. An employer cannot make any changes in the agreement unless that has been duly agreed and stipulated in the contract by both parties. In the event of any change to be made in the agreement, the employer will have to renegotiate the contract and settle with the employee, or face financial penalties for breach of contract.

There may be cases where an employer may want to terminate his employee’s employment but the employee hasn’t met the grounds for termination specified in the contract, the employer will not be able to fire him or her without breaching the contract.

An employment agreement sets clear expectations regarding what is required of each party. The agreement’s “promotion” and “termination” provisions make clear what constitutes satisfactory and unsatisfactory performance. The agreement also makes clear what the employer must do, such as provide a bonus, in the event an employee exceeds expectations.

Frequently Asked Questions
Employment contract are drafted for which employees?

The employment contract id drafted for full time as well as half time employees

Are employment contracts the same for part-time employees?

Yes. Part-time employees have the same rights as and are entitled to be treated no less favourably than full-time employees. For example, they have rights to the same benefits and terms of employment (pro rata if necessary) as similar full-time employees, unless the failure to provide this benefit can be objectively justified.

At what point does an employment contract become binding?

Once an unconditional offer of employment has been accepted by a potential employee, a contract exists. This may occur before the employment commences.

What is the list of clauses that are covered under the employment contract?

The following list of clauses are included

  • Duties and responsibilities of Employers and Employees
  • Working Hours and Leaves
  • Salary and Remunerations
  • Dual Employment
  • Non-Disclosure and confidentiality
  • Intellectual Property Right
  • Non-compete Clause
  • Termination of Employment
  • Arbitration