What is an Employment Contract?

An employment contract is a legal agreement used in labor law to establish the rights and responsibilities between an employee and an employer.

It is a formal document that outlines the terms of the relationship between the employee and employer, including compensation and expectations. Also referred to as a contract of employment, it defines the conditions governing the employment relationship.

Essential Features of an Employment Contract

Like any other contract, an employment agreement includes key features such as offer, acceptance, competent parties, a legal objective, and free consent.

Terms and Conditions of the Contract

The contract outlines the terms and conditions mutually agreed upon by the employer and employee for employment purposes. These terms typically cover the employee's job responsibilities, working hours, days off, earned leave, dress code, vacation, sick days, and compensation. Benefits such as insurance and retirement plans, if available, are also included.

Below is a list of common terms that should be part of an employment agreement:

• Appointment: Acceptance of employment, office location, and reporting hierarchy.
• Contract Duration: The length of the agreement between the employer and employee.
• Job Description: Primary responsibilities and role expectations.
• Remuneration: Base salary, bonuses, incentives, provident fund, and gratuity.
• Payment Terms: Frequency and method of payment.
• Deductions: Any deductions made from the salary.
• Termination: Conditions for termination, including without cause, resignation, or termination for cause.
• Death or Incapacity: Terms for handling death or incapacity during employment.
• Working Hours: The number of hours an employee is expected to work.
• Confidentiality: Requirements for maintaining confidentiality regarding company information.
• Return of Employer’s Property: Conditions for returning company property upon termination.
• Intellectual Property: Ownership of intellectual property created during employment.
• Indemnification: Protection against claims or damages.
• Notices: Requirements for giving notice by either party.
• Non-Compete and Non-Solicitation: Restrictions on the employee's actions after leaving the company.
• Governing Law: Jurisdiction and arbitration processes for disputes.

Stages of Disputes Related to Employment Contracts

Employment disputes often occur in the following stages:

• Pre-Hire Stage: Issues before the employee is officially hired.
• During Employment: Disagreements that arise while the employee is working.
• Termination Stage: Conflicts arising during or after the employee’s termination.
• Post-Termination: Issues that arise after the employee leaves the company.

Reasons for Termination

Termination can happen due to various reasons, including:

• Voluntary Termination: Employee retirement, resignation, failure to return from leave, or absence without notice.
• Involuntary Termination: Layoffs, disciplinary actions, or unsatisfactory performance.

Employment Agreement Procedure

• 2 working DAYS

  The contact will be delivered to you within approx. 2 working days after the information required for such is received from the client.

• 2 operating DAYS

  In case of several changes to the agreement, it will be carried and delivered within 2 working days.