Employment Contracts

Job satisfaction is the basic need of any employee and this is where an Employment Contract comes into picture. An Employment Contract is a signed agreement between the employee and employer. It states and defines the rights and responsibilities of both the worker and the company.

An employment contract specifies the relationship between the two parties and also includes compensations and expectations. It is necessary to have a contract when hiring an employee whether part time or permanent as it specifies the date of joining, salary, notice period etc.

What are the components of an Employment Contract?

The Employment Contract lays down the following agreements-

  • Salary or wages: Contracts will itemize the salary, wage, or commission that has been agreed upon.
  • Schedule:  In some cases, an employment contract will include the days and hours an employee is expected to work. 
  • Duration of employment:  An employment contract will specify the length of time the employee agrees to work for the company. In some cases, this might be an ongoing period of time. In other cases, it might be an agreement set for a specific duration. Other times, a minimum duration is laid out, with the possibility of extending that period.
  • General responsibilities:  Contracts can list the various duties and tasks a worker will be expected to fulfil while employed.
  • Confidentiality: Although you may have to sign a separate non-disclosure agreement, sometimes a contract might include a statement about confidentiality.
  • Communications: If an employee's role involves handling social media, websites or email, a contract might include a point that the company retains ownership and control over all communications.
  • Benefits: A contract should lay out all promised benefits, including, but not limited to, health insurance, 401k, vacation time, and any other perks that are part of the employment.
  • Future competition: Sometimes a contract will include a non-compete agreement (also known as an NCC). This is an agreement stating that, upon leaving the company, the employee will not enter into jobs that will put him or her in competition with the company. Often an employee will have to sign a separate NCC, but it also might be included in the employment contract.

Advantages of Employment Agreement-

  • Helps in negotiation
  • Written document act as an evidence
  • Employment agreement is important for fostering a positive relationship between employee and employer

How is an Employment Agreement made?

Drafting an employment agreement is a very easy process and can be done easily at the time of joining.

  • A well efficient lawyer from our team shall contact you, and explain you the total process, and will understand the need of Employment Agreement.
  • Once the objectives of the same are clear, the lawyer shall draft a sample Employment Agreement accordingly.
  • The draft Employment Agreement will be sent for your review.
  • The whole process takes around 3-4 working days.

FAQs :

1. What is an employment contract?

An employment contract or contract of employment is a kind of contract used in labour law to attribute rights and responsibilities between parties to a bargain. The contract is between an employee and an employer.

2. Are employment contracts legal?

All employment agreements are legally binding on the employer and, therefore, employers are best served by having them drafted and reviewed by an experienced employment law attorney.

3. Are employment contracts legally binding?

A contract of employment is a legally binding agreement between you and your employer.

4. Do every employee need a contract?

Most employment contracts do not need to be in writing to be legally valid, but it is better if they are.


5. Why is the employment contract important?

A contract of employment protects the employer as it regulates the behaviour of the employee in the workplace. This is important because all company policies as well as an employer's disciplinary code, should form part of the contract of employment.

6. When should I receive my employment contract?

All employees regardless of the number of hours they work per week, are entitled to receive a written statement from their employer within two months of starting work. The statement should describe the main terms of the contract of employment.

7. What are the different types of employment contracts?

a. Full-time and part-time contracts.

b. Fixed-term contracts.

c. Agency staff.

d. Freelancers, consultants, contractors.

e. Zero hour contracts.

8. What is the purpose of an employment contract?

The purpose of an employment contract is to ensure that both you and your employer have a clear understanding of what is expected during the term of employment. It will also serve to eliminate any disputes which may arise

9. Can an employer break a contract?

A breach of the contract happens when either you or your employer breaks one of the terms.

10. Can an employer change your contract?

Changes to employment contracts could be made by agreement between you and your employer.