Employment Contract: Everything You Need To Know
A signed agreement to provide employment to one of the contract’s parties—the employee—is known as an employment contract. The term “employer” refers to the person who assigns work to an employee. The terms and conditions, as well as the rights and obligations of the employer and employee, are all outlined in the employment contract. Under the Indian Contract Act of 1872, an employment contract is an agreement that is legally enforceable with the intention of hiring or providing work, while a contract is defined as an agreement that is enforceable by law.
An employment agreement significantly reduces the likelihood of future disputes and helps the parties understand all of the terms and conditions of the employment. A “Contract For Service” or “Contract Of Service” may be included in an employment contract. For independent contractors and freelancers, for example, a service contract is a form of employment where the employee is not required to follow all employer instructions regarding what work has to be done and how it needs to be done. However, under the terms of the employment contract, the worker is required to pay attention to all employer directives regarding the nature of the work and the methods required to do it, such as
Important Terms to be included in an agreement for employment
Information on salary and wages
The amount of consideration the employee will receive, the mode of payment, the date of payment, and any deductions that may be made in exchange for various acts on their part are the most important clauses or sections of information that should be included in an employment contract.
The working hours
For reasons of clarity, the work schedule, the amount of hours the employee must finish in a day, or the number of days they must work in a week, must also be stated.
Tenure
If the employment contract is for a certain duration, the time of employment must be included in the terms and conditions as this section specifies when the agreement will end on its own. If the agreement is for a continuous length of time, it can be terminated or kept in effect as is. These kinds of employment contracts may include a minimum term that must be met and may also be extended.
Duties and responsibilities
The employment contract outlines the duties and responsibilities that both the seller and the buyer must meet in great detail.
Intellectual property rights
Intellectual property rights (IPR) regulations are to be included in the employment contract as well. Generally speaking, employers own these rights, not employees.
Benefits and allowances
All benefits or allowances, including insurance, vacation time, and other things, that an employee will receive both during and after their job term should be included in an employment contract.
Confidentiality
An employment contract also includes a confidentiality provision, which is a stipulation about not disclosing information. An additional non-disclosure agreement may be executed in certain situations.
Future restrictions
Employers are free to add a confidentiality agreement or language that limits an employee’s ability to perform tasks which could put them in direct competition with the employer.
Dispute resolution
It is always preferable to include a dispute resolution clause in the agreement in advance to guarantee efficient handling of any disagreements and a prompt return to work.
In addition to some of these crucial elements of an employment contract, other clauses, such as a trial period clause, may be added based on the needs of both parties. Written and implicit employment contracts are two different forms of employment contracts.
Written Employment Contracts and Implied Employment Contracts
If the process is carefully carried out with the help of a legal expert, a written employment contract is the ideal method to begin the employment tenure as it makes all the rules, duties, and regulations crystal clear and provides no space for future disagreements. The employee should carefully study the contract, consider any potential terms, including the trial period and non-compete provision, and make an informed decision.
An implicit employment contract is one in which the employee’s actions, remarks, and other messages during the interview or promotion constitute an implicit contract of employment. Although an implied employment contract is binding on both parties, it is somewhat difficult to prove.
Advantages and disadvantages of an employment contract and should you have an Employee Agreement?
There are certain advantages and disadvantages of having an employment contract, but the advantages are certainly more.
An employment contract, which can be used for specifications as well, has a very explicit definition of the responsibilities and responsibilities. Both the employer and the employee benefit from this. By including provisions that benefit both parties—such as a non-compete agreement that favors the employer and job stability for the employee—an employment contract guarantees the protection of both sides. A written document provides stability because each responsibility is spelled out in advance. Since no one wants to suffer the repercussions if the terms of the contract are broken, all of the requirements are typically satisfied. After all, the contract is legally binding.
The legally binding character of the agreement, as well as the clearly defined roles, responsibilities, and benefits, draw in more workers since they provide them with job stability for an extended period of time.
In addition to these benefits, an employment contract has certain drawbacks as well. For example, it is not as flexible as it could be, its contractual character can occasionally be detrimental to both parties, and any changes to the terms of the agreement must be negotiated. With some caution beforehand, all of these negatives can be avoided.
It is usually a good idea to draft an employment contract with all the benefits included. This way, should there ever be a dispute, it will be simpler to defend your case against a written contract. If you are trying to hire a new employee and you want your anonymity maintained, it is advisable to sign an employment contract. It makes things easier for both parties.
Is it judicious to get your Employment Contract reviewed by a legal expert?
Having a legal expert by your side while you scrutinize the contract is the best decision you must make as you can get your contract reviewed by the lawyer which will throw light on many aspects that a lawyer can only point out, hence it is always better to review your contract with a legal expert.
In any case, if some changes are needed in the contract, the lawyers are good negotiators as well, and s/he can professionally put your contention before the employer or his/her lawyer and negotiate on your behalf.
Services Expertkhoj has to offer regarding Employment Contract
Expertkhoj as an online dispute resolution platform and a legal services firm has a complete panel of legal experts who have the expertise, the skill, and the experience to accomplish any task. They can help you irrespective that you are an employer or an employee as we provide services such as online legal consultation if there is a need to review the contract and agreement drafting services if a new employment contract is to be drafted. We also provide services relating to finding a lawyer online if there is some dispute regarding the employment contract.
