Employment Agreement

An employment contract is necessary when hiring any employee or consultant, whether part-time of permanent. It is a comprehensive document that addresses all terms and conditions governing employment, as well as the rights, duties and responsibilities of each party with respect to the other. Common points would include breakdown of salary, date of joining, notice period and non-compete clause.

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Advantages of an Employment Agreement

Minimizes Risk

Employment contracts protect the rights of both employers and employees. A specific, well-drafted clause in an employment contract can go a long way in avoiding ambiguity and minimising legal risks.

Sets Expectations

As with many other legal documents, the key advantage is psychological. Once an employee and employer sign a contract, it creates a feeling of respect for the terms it contains. The contract defines the expectations and responsibilities of both parties, ensuring that neither party will be treated arbitrarily in case an event discussed in the contract occurs.

Procedure for Employment Contract:

The contract of employment should be distinguished from the statutory written statement of employment particulars which should generally be provided to all staff not later than two months following their start date. The written statement is not conclusive evidence of the contract of employment. The statement must include the following:

• the name of the employer and employee;
• the date when the employment began and the date when the period of continuous employment began;
• the scale or rate of pay or the method of calculating pay and the intervals at which remuneration is paid (i.e. weekly, monthly, or other specified intervals);
• hours of work (including any terms and conditions relating to normal working hours);
• any terms relating to entitlement to holidays, including public holidays and holiday pay and details as to how accrued holiday pay on termination is calculated;
• any terms relating to incapacity for work due to sickness or injury including any provision for sick pay;
• the length of notice which the employee is obliged to give and entitled to receive to terminate the contract of employment;
• the title of the job or a brief description of the work involved;
• where the employment is not intended to be permanent, the period for which it is expected to continue or, if it is for a fixed term, the date when it is to end;
• either the place of work or, where the employee is required or permitted to work at various places, an indication of that and of the address of the employer;
• any collective agreements which directly affect the terms and conditions of the employment including, where the employer is not a party, the persons by whom they were made;
• any disciplinary rules applying to the employee or where such details are to be found;
• any disciplinary or dismissal procedure applying to the employee or where such details are to be found;
• to whom and in what manner the employee may apply if dissatisfied with any disciplinary decision or if he has any other grievance;
• any further steps in the disciplinary or grievance procedures or where such details are to be found; and
• any terms relating to pensions and pension schemes and whether there is a contracting out certificate in force in respect of his employment for pension purposes.