Got a job but don’t want to read the lengthy employment contract your employer sent to you? Well, you must read it. In case you don’t understand anything about the employment contract, you can contact us! But don’t sign it without first comprehending it.

The employment contract will govern your salary, working hours, working conditions, dispute redressal, and so on. It is never a wise choice to sign an employment contract without understanding it fully.

What is an employment contract?

An employment contract is a contract signed between an employer and employee before the employee joins the business of the employer. The employment contract governs all the terms and conditions of the employment of the employee including remuneration, holiday and leaves, confidential and privacy, termination, and so on.

Types of employment contracts

There are different types of employment contracts and some of them are as follows:

i) Full time contract,

ii) Part time contract,

iii) Zero-hour contract,

iv) Casual contract,

v) Freelance contract,

vi) Union contract,

vii) Fixed term contract,

viii) At-will contract,

ix) Consultancy Agreement, and

x) Secondment

Important Clauses

The clauses of an employment contract must elaborate on the following matters:

i) Job title and description

The employment contract must stipulate the job title in which the employer wants to place the employee. Along with the job title, a description of the job responsibilities should also be stated to provide a better clarity to the employee.  

ii) Remuneration

The employment contract must state the remuneration payable for the job role assigned to the employee. Further, the contract must stipulate the mode of payment of remuneration, structure of remuneration i.e., house rent allowance, dearness allowance, education fee, etc. In case of a freelance contract, it must state the remuneration payable per project.

iii) Working hours

The working hours of the job should be stated by the employment contract. It must also provide in what conditions the employee might be asked to work overtime and if there are any incentives for working overtime.

iv) Bonus and incentives

The contract should provide the terms of the bonus, and other incentives such as equity, commission, etc. that are payable to the employee.

v) Holiday and leaves

The employment contract should provide how much paid leaves an employee can seek during a month/year and how much deduction from the remuneration will be made if the leaves sought by the employee exceed the maximum number of paid leaves.

vi) Intellectual property

All employment contracts stipulate whether any invention, literary work, artistic work, etc. are the intellectual property of the business organization or of the employee. In most contracts, the employer retains the intellectual property rights with the business organization.

vii) Confidentiality and privacy

The employment contract must bind the employees to maintain the confidentiality of the information, data, content, etc. received in the course of employment and state consequences in case the employee fails to maintain the confidentiality of such information.

Amendments to an employment contract

An employment contract cannot be amended unilaterally by the employer or the employee. It was a contract signed by both employer and employee and therefore, can be amended only when both employer and employee consent to an amendment to it.

Conclusion

An employment contract is a contract signed between an employer and an employee which provides the terms and conditions of the employment. An employment contract can be of different kinds such as full-time contract, part time contract, freelance contract, casual contract, zero-hours contract, and so on. It should stipulate matters like job title and description, remuneration, working hours, bonus and incentives, holidays and leaves, intellectual property, confidentiality and privacy. Lastly, an employment contract can be amended only when both employer and employee provide their consent to such amendment.

Please visit our website www.bestlegalservices.in, we can draft a proper employment contract based on your needs and instructions.