Best Practices for Employment Contracts

Marc Ramsbottom

September 06 2019

An employment contract is mutually beneficial to both the employer and employee; they provide clarity regarding the rights and responsibilities of both parties. Outlined below, is key information that employers should know about employment contracts.

Contracts play a crucial role in the creation and management of a successful working relationship between employer and employee. Key reasons they should be included in the on-boarding process of all employees are:

  • Resolving disputes: Good contracts include dispute resolution procedures that help avert long legal battles; and the time and costs associated with them.
  • Setting a term: An employment contract should specify a definite term of employment. This means, if the employee does not violate the terms of their employment, they have a job. Furthermore, at the conclusion of this term, the employer can release the employee.
  • Outlining responsibilities: Employment contracts detail employee job duties, salary, benefits and more. Ensuring the role of the employee is clearly outlined in a contract, prior to them starting their job, helps avoid future confusion or disagreements over their role.

Best practices for crafting employment contracts

Well-crafted employment contracts work to protect employers from certain risks as well as protect the employee’s job security. Here are best practices for generating employment contracts:

  • Provide the employee with adequate time to review the contract: Giving the employee several days to a week, for reviewing the contract, allows them to thoroughly review it and seek independent advice if the individual so chooses.
  • Have the contract signed prior to the first work day: The employee should agree to the terms of their employment before beginning work; to avoid discrepancies over the work agreement. Also, having a contract signed after the employee’s start date can result in any onerous terms within the contract, being unenforceable for lack of consideration.
  • Always use clear, detailed language: When a contract is written in such a way that is appears vague or leaves room for ambiguity, this always favors the employee.
  • Attach relevant documents to employment contract: If the employment contract refers to other documents (e.g., employment policies or Code of Conduct), these documents should be attached to the employment contract–for the employee’s reference.

Looking for additional information on employment contracts?

If you have further questions on employment contracts or need help creating these contracts in your organization, call us today: 1 (833) 247-3652.

Suggested Resources