This article is about the contract of employment – features of employment contracts, benefits of having an employment contract and different types of employment contracts that exist.
Let’s start then.
Once the employee selection process is completed, which means that the business has successfully found and chose the most appropriate candidate for the job, this person must be formally appointed.
The suitable candidate shall be first contacted by phone or Email with the news that he or she is being offered the job. Then, the Human Resources (HR) department will send the official letter confirming the appointment.
What is contract of employment?
These days, in most of the countries around the world, the new recruit is entitled by law to receive either a signed contract of employment, or a written statement of the terms and conditions of their employment at the firm.
A contract of employment is a legally binding official document between the employer and the employee. It states out the terms and conditions governing a worker’s job at the business organization including main duties, rights and responsibilities, conditions of work, conditions of service and termination details.
As a legal document for new employees joining the business, or renewing current employment, it must be done in writing. All possible care needs to be taken to ensure that it obeys current employment laws in the state where the worker is employed.
Features of contract of employment
The specific terms of an employment contract will vary depending on the type of contract, the industry, and the location. It is important to read the contract carefully before signing it to make sure you understand all of the terms and conditions.
A typical employment contract will contain the following common features:
- Names of the employer and employee.
- The job title.
- Work responsibilities and the main tasks (duties) of the employee to be undertaken.
- Employment commencement date which is when the employment is to begin.
- Amount of money the employee will be paid and when payment will be made.
- Whether the contract is full-time, part-time, temporary or flexible.
- Working hours the employee is expected to work
- Holiday entitlement which is the number of days of holiday an employee receives.
- Notice period which is the period of time workers must give the employer in case of leaving their employment. Or the number of days’ notice the employer must give to make the worker redundant.
- Grievance and disciplinary procedures, and where employees can find more information, e.g. in employee handbook.
Benefits of having contract of employment in place
A contract of employment has several benefits to both employers and the employees.
- Outlines the expectations clearly. Having contract of employment imposes responsibilities on both the employer to provide the conditions of employment laid down as well as the employee to work the hours specified and to the standards expected in the contract. The contract removes any misunderstanding that could arise over issues such as daily duties, hours of work, rate of pay, holidays, etc.
- States the responsibilities of both parties. Having contract of employment guarantees that when either an employer or employee ignores any of the terms of the employment contract, each party could take legal actions against one another. For example, when the employer pays the worker less than the amount agreed in the contract or when a worker breaks any of the terms of the contract by refusing to work the specified number of hours.
- Serves as a legal protection. Having contract of employment gives the employee a legal protection. Therefore, it is illegal for an employer to employ workers without offering written employment contract. However, the precise legal requirements of employment contracts are likely to vary between different countries. In some countries, a verbal agreement between worker and employer can also be legally binding.
Different types of employment contracts
The specific terms and conditions of an employment contract will depend on the specific organization and its employees, but there are some general trends that can be observed.
There are many different types of employment contracts, but some of the most common ones include the following three:
- Full-time employment contract. Full-time employment contract is employment contract that is for the full working week of 40 hours per week and eight hours per day.
- Part-time employment contract. Part-time employment contract is employment contract that is for less than the full working week. For example, four hours per day.
- Flexible employment contract. Flexi-time employment contract is employment contract that allows workers to be called in to work at times that are the most convenient to employers and employees. For example, at the busies times of the day.
The main distinction between full-time contracts and part-time and temporary contracts is the number of hours per day that the worker is expected to work.
Additionally, there are a few more types of contract of employment depending on the length of service:
- Temporary employment contract. This contract is for a fixed period of time. For example, six months. Temporary contracts can be either full-time or part-time.
- Permanent employment contract. This contract is for an undetermined period of time, or non-fixed periods. It is the most common type and applies to employees who work regular hours and are paid a salary, or hourly rate. It does not have an end date and can be terminated by either party with notice.
- Casual employment contract. This contract is for employees who work on an as-needed basis. They do not have a set schedule or number of hours, and the employer is not required to offer any minimum amount of work. Casual employees are not typically entitled to the same benefits as permanent employees.
- Zero-hours employment contract. This contract is similar to casual contracts, but the employer is not even required to offer any work at all. Zero-hours employees are only paid for the hours they actually work.
- Internship contract. This contract is for students or recent graduates who are gaining work experience. It typically does not pay a salary, but may offer some other benefits, such as tuition reimbursement or housing assistance.
- Apprenticeship contract. This contract is for people who are learning a new trade or skill. It typically combines paid work with training, and may lead to a full-time job after the apprenticeship is completed.
Soft HRM and hard HRM can both be reflected in employment contracts.
A. Soft HRM contracts are more likely to include terms that emphasize employee well-being and development. For example, they may include provisions for flexible work arrangements, parental leave, and training and development opportunities. They may also include clauses that promote employee morale and engagement, such as a non-harassment policy or a commitment to diversity and inclusion.
B. Hard HRM contracts are more likely to include terms that emphasize efficiency and productivity. For example, they may include provisions for performance reviews, disciplinary procedures, and termination clauses. They may also include clauses that limit employee rights, such as a non-compete clause or a confidentiality clause.
In summary, the new job appointee is entitled to receive written contract of employment as a legally binding document confirming his or her employment at the business organization. Employment contracts typically include details regarding major duties, rights and responsibilities, working conditions as well as contract termination details.
