Definition of Employment contract:
Employment contract is a formal, signed agreement between the new employee and the employer (or the labor union). It explains the rights, responsibilities, and obligations of both the employee and the employer.
What should your employment contract contain?
Also known as contract of employment, it usually contains all the terms of employment which includes:
- Remuneration: The salary, wage, or compensation that was discussed with the employee, along with commission percentages, if any.
- Work Schedule: The days and working hours of the employee.
- Employment period: How long is the employee going to work for the company. Would it be for a short period, or will the duration be extended based on the employee’s performance?
- Responsibilities of the employee: It includes all the responsibilities of the employee during the employment period.
- Confidentiality agreement: Although most jobs have it, some job roles require employees to sign a separate confidentiality agreement as well.
- Employee benefits: Should mention all the benefits the employee is entitled to receive.
- Terms on leaving the organization: Explains if the employee can join competitors on leaving the organization.
- Ownership agreement: Which states that the company owns the work related items created by the employee.