The Importance of Employee Contract Agreements

Employment Contracts are Critical for Clarity, Compensation and Compliance

An employment contract is beneficial to both the employer and the employee. It helps set the terms of service, conditions and compensation that make it easier to avoid any problems down the line. The contract guarantees that employees will a job as long as they do not violate the terms of the contract. The contract also allows employers to dismiss workers at the end of a temporary contract or terminate them if their services are no longer required. Certain jurisdictions place restrictions on the ability of employers to fire their employees unless it is specifically noted in the contract at the beginning. The length service should be carefully negotiated. Employment contracts are legally binding documents. Unfair terminations or breach of duty can be challenged in court. This can cost both parties time and money. A typical contract should include the following information.

Terms of Service

The contract should identify whether the employment will be permanent or temporary in nature. Terms of temporary employment should be clearly identified and communicated to employees in advance. Most organizations take employees on a temporary, probationary period before confirming them as permanent employees and this information should be covered in the employment contract.


The contract should specify the conditions that will lead to termination of the employment before or at the completion of the contract period. This helps both parties understand the activities that are required and the ones that are forbidden. The employment laws regarding termination of the jurisdiction should be consulted to ensure compliance.

Duties and Disclosure

The employment contract should identify the job duties that employees are required to perform as well as the responsibilities of the employer towards their employees. The contract should also cover any essential disclosures such as disability accommodation and criminal records etc.

Compensation and Benefits

These include employee wages, paid leaves, medical insurance and any other benefits provided by the employer for the services. Any payments to be made in case of termination should also be included in the contract.

Non competition Covenants

If an employee has access to confidential information about the company or any of its clients, the employer may impose restrictions on the release of this information to third parties. Breach of this covenant allows the employer to terminate their employee and seek further legal actions against them.

Contract Enforcement

Written and signed contracts offer business organizations and employees a number of benefits. In case of breach of contract, the aggrieved party can take the matter to court and get a ruling in their favor. When the legal route is taken, the court will consider a number of factors. They first determine whether the contract was entered into freely by both sides and whether it was drafted in line with existing legislation. There are some cases where the courts found the contract was void to begin with, as employment laws were not followed by one or the other party.


Well drafted employment agreements and terms of engagement are essential for a good relationship between employer and employee. It can be helpful to get the employment contract drafted or reviewed by an attorney who is experienced in employment law. A legal professional can ensure that the contract is compliant and your interests are not affected in case of breach of contract by the other party.

Please follow and like us:

Related Post