Employment Contracts
An employment contract is an agreement between an employer and an employee which specifies their employment rights, responsibilities, and duties. This sets forth the terms of the contract.
Most employment contracts are negotiable. Once the employment contract is signed, both the employee and employer are bound under the terms of the contract.
Contract for Services or Contract to Provide Services
A contract for services is a different form of an employment contract. A contract to provide services is usually an agreement between a person who need a particular services and another person to undertake the work for them. A person does not necessarily become an employee for this person; he or she just provides them with a service.
An Employment Contract Usually Includes:
- Job title, responsibilities and duties
- Salary or compensation, overtime pays, deductions
- Number of weekly work hours
- Healthcare, medical benefits, sick leave policies
- Other benefit options
- Length of employment
- Grounds for termination
- Standards for evaluation
Employment Contracts – Common Clauses
Arbitration Clause
This states that if a dispute arises between the employer and employee, they must go through arbitration rather than the court system.
Non-Compete Clause
This ensures that upon the severance or termination of the employee, he/she will not engage and/or is restricted from working in direct competition with their former employer. This clause may also place restrictions on geographic locations; the scope of type of work and skills, and the duration of the clause.
Confidentiality Clause
This clause may assign a serious penalty if certain business information is revealed. This specifies what business details the employee can converse or not once he/she leaves the job.
Choice of Law Clause
This refers to what law courts in a particular jurisdiction will use to determine the contract terms and resolve contract disputes.
Severance/Termination Clause
This specifies the terms of the employee’s termination, what the employee will receive if the employment comes to an end, whether and when employment is renewable.
Covenant of good faith and fair dealing
This is a principle that every contract includes an implied duty to act in good faith as to the performance and implementation of the contract. Although, not explicitly declared, both parties are required to treat the other party in good faith and deal fairly without breaking their word.