Employment Contract Types

Employment contracts are agreements that set forth the responsibilities and duties of both the employer and the employee. When drafted properly, these agreements provide a useful tool by which both parties can be equally and fairly protected. The employment contract can offer an employee security since the employee understands what the employer expects. At the same time, the employer retains the ability to terminate an employee who fails to abide by the terms of the agreement.

Employment contracts protect both the employer and employee.

Contents of Employment Contracts

Every employment contract should contain essential terms. These include basic information about the parties to the contract as well as the nature of the employment. Initially, the contract should include the names and addresses of the parties. Additionally, the agreement should describe the employee's position, salary and other compensation. It should also outline the hours to be worked, overtime and sick time. Furthermore, if there's a probation period, this should be mentioned in the agreement. Finally, the contract should include the method and basis for termination.

Fixed-Term Contracts

Under a fixed-term employment contract, an employee receives a position for a specific period of time. In other words, the contract contains a specified start date and termination date. Therefore, the employee and the employer are aware at the outset of the exact date when the employment will terminate. Usually, utilizing a fixed-term contract minimizes legal challenges based upon termination issues, since the termination is described in the contract. However, legal recourse may still be permitted for a wrongful termination.

Ongoing Contracts

An ongoing employment contract doesn't have any specific termination date. Thus, the employee's duration of employment is indefinite. An employee with an ongoing contract can make many more legal challenges because the contract doesn't clearly define how and why the employee may be terminated. Therefore, there's a higher risk that the employer and employee may interpret the issue of termination differently.

Consulting Contracts

Consulting work calls for a specific type of employment contract. Under a consulting contract, the employee performs a specific task on behalf of the employer. Generally, the agreement will include a prescribed task based upon the consultant's expertise. A consulting employment contract usually involves the production of an idea or development of a plan. Moreover, the agreement is usually task-oriented in that the employment will cease when the task is completed.

Non-Compete and Non-Disclosure Agreements

Some types of employment agreements contain provisions that include restrictions upon the employee's future employment. A non-compete provision can be included in employment agreements in most jurisdictions. This clause states that the employee will not seek to gain employment with a competitor for a specific period of time in a specific region. Additionally, a non-disclosure clause provides that the employee will not utilize any information gained as a result of working for the employer in future employment of the same or a similar nature.

References

• Employment Law Information Network