Contract of Employment

What does Contract of Employment mean?

A contract of employment is a written or oral contract, either express or implied, which outlines the conditions for employment, benefits offered, non-compete requirements, ownership of any work product generated, conflict resolution agreements, the salary or wage offered by the employer to carry out specific job duties or obligations, and the duration of the contract.

Under the contract of employment the employee will provide labor for fair compensation and the employer will agree to provide a safe work environment. The contract for employment will also outline the requirements to legally terminate the contractual agreement if either party fails to meet the terms of the contract.

Do I need a written contract?

Not all employees will be offered a written contract. In some cases, however, an employer may offer a contract to guarantee an employee will stay at the job for a particular amount of time, reducing the chance they will leave. If the employee does choose to leave, however, the contract will outline the penalties they may face.

Contracts may also be offered to eliminate the chance the employee will share confidential information with a competitor or to prevent an employee from leaving the company and going to work for a competitor.

Downsides of a written contract

A written contract may hinder both the employee and the employer. For instance, if an employee decides they no longer want to work at a company they may not be able to terminate the contract. But this is a two way street. Employers may also find a written contract too binding, especially if their business needs change and they cannot terminate the contract because the employee could bring a case against the them for breach of contract.

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