6 Key Points Every Employment Contract Should Have
A friend of mine told me about an interview for a position which she succeeded and was offered the job. What was remaining was the contract she had to sign the next day. Talking about the contract, she said she made sure the company accepted the pay she thought is the best for such a job. To her, an employment contract is just about the money and nothing else.
Many people fall into this trap. An employment contract is not just about the money. Signing a contract just in the name of that may not be in your best interest especially if it is a long term contract. We should know that a contract is all about forming a relationship and hence we need to take time to make sure it is providing the contracting parties with what they want.
An employment contract describes what an employee has to do for the employer and what he/she is going is to receive from the employer. There are many other aspects that an employment contract can also address. Below are 6 key points every employment contract should have.
The Various Parties
An employment contract has to be made by at least two parties. This is usually set at the beginning of the employment contract. The people involved are the employer who can be a natural person or company and the employee who is the person that has to offer his/her service (responsible to the employer).
A detailed job description is necessary to thoroughly explain the role and responsibilities expected from the employee and their limitations. The job description comes along with your position clearly set out. Most job contracts that I have come across in Cameroon especially from small businesses rarely spell out the responsibilities. It only gives the job title. A job title is vague without responsibilities. A job title has to go alongside the responsibilities to ensure that it is what you actually wanted or can do.
For how long and how often will you offer your services
Is it a part-time or full-time contract? Is it a temporal, definite or long term (indefinite) contract? How many hours are you expected to work per day or week? Are weekends included? All these should be set out in the employment contract. Furthermore, it has to show whether you are allowed to offer your services to other employers or can engage in other forms of employment like being self-employed. Make sure the relationship does not conflict with your interests. It should not prevent you from carrying out your own interests at your free time. Your interests should be respected so long as it doesn’t conflict with that of your employer’s business.
Salary / wage is just one of the components of a compensation package. There are other things that make up this package and so this should be spelt out clearly in the employment contract. Some companies pay low wages but with many other benefits while others have high pay with limited benefits. The contract should spell out what you will receive in return for what you do as work. Are you working on an hourly wage, on commission or an annual salary? What about the other forms of the compensation package like bonus, health benefits, insurance, perks, vacation leave, disability leave, expense reimbursement? If a bonus is offered, be very clear you know how the bonus terms are and what you have to do in order to be eligible for it.
Grounds for termination of contract
There are three ways an employment relationship can come to an end. The employer can end a relationship for a “just cause”. This means a specific part of the contract might have been breached. It could be theft, violence, harassment, misconduct and others.
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It can also be done “without cause”. In this case, the relationship has ended not as a result of the employees actions. This could happen during a crisis when an employer is downsizing or when the relationship is not working.
“Resignation” is the third method where an employee/employer’s relationship can end. Obviously, the termination should have a reason, notices or warnings and the date.
After the employment contract ends
Other components of an employment contract can include limitations on the employee not compete with your business in case he/she leaves; protection of your business secrets and client lists with non-solitation clauses for a period of time; non-compete clauses that restrict the employee from taking another job in another company in the same industry.
It’s difficult to decipher at the beginning of a relationship what will happen at it’s end. So it is always good you make sure you understand everything in the contract by asking for answers where you have doubts. This could bring about a healthy employment relationship between the employer and employee.