Why Do We Need Employment Contracts?

by Oct 9, 2021Human Resources, View All

Employment contracts are the backbone of healthy employer/employee relationships. They spell out the conditions of the job in a mutually binding agreement between you and your employees. They allow everyone to be clear about the terms of a job, and the expectations of both parties.

Employment contracts can be in writing or verbal. Written contracts are always best, however, as verbal agreements can be misinterpreted or misremembered. It’s easy to refer back to a written contract if and when a conflict arises.

Here are three benefits to having professionally-written employment contracts:

1. They help set the condition of work

A good employment contract spells out clearly how much the employee will be paid, what days and times they work and where, what leave they are entitled to, plus any additional benefits such as company car or phone, and overtime rates. Having these conditions clearly written out helps you and your employees know exactly what has been agreed to. This saves you time (and potentially money) in the future if there’s any conflict around these matters.

2. Employment contracts can protect your confidential and intellectual property

When an employee develops work for your business, who owns this work? Is it you, or its author/creator? There are certain laws that protect both the author/creator and the employer, and sorting this out clearly in the employment contract helps protect both parties. If there’s any dispute over who keeps the right to use that creative work when an employee leaves, the answer can be found in the employment contract.

3. They help protect your business and commercial interests.

Employment contracts are specific to individual businesses and employees, not a one-size-fits-all. Depending on your business, yours may include clauses relating to non-competing, restraint of trade, and non-solicitation, or other specifics to protect your business. Clauses such as these can be invaluable in protecting your business long-term, as well as protecting other employees and customers.

Employment contracts help you set out expectations, conditions and build in protection. They are legally binding agreements that both the employee and employer will be held accountable to, so it’s important to get them right each time.

Assurance HR Management is experienced in writing clear employment contracts that benefit both employers and employees. Contact us today about how we can help you with yours.

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