The legal agreements between employers and employees that
outline the terms and conditions of the employment relationship are called
employment contracts. Such contracts crystalizes the rights and obligations of
both parties and provide clarity on various aspects of employment.
The following are the essential components of employment contract:
Job and Title Description
The contract should be clear with regards to employee’s job title and should also provide a detailed description of their responsibilities and duties.
Compensation and Benefits:
The contract should further clearly specify the employee’s salary or hourly wage, payout frequency and any additional compensation components and also outline benefits such as health insurance, retirement plans, and others.
Work schedule and location:
The contract should elucidate the essential working hours as well as expected working hours.
Probationary period:
The contract should provide duration of any probationary period during which the employees performance will be assessed.
Termination Conditions:
The contract should provide the conditions under which either party can terminate the employment relationship.
Confidentiality and Non-disclosure:
The contract should further have a clause specifying the employee's obligation to maintain the confidentiality of company information and not to disclose sensitive or proprietary information to third parties.
Intellectual Property Rights:
The contract should also provide for a clause regarding the ownership of any intellectual property created by the employee during the course of employment and address any pre-existing intellectual property.
Code of Conduct and policies:
The contract should give detail of the model code of conduct to be maintained during the course of employment.
Dispute Resolution:
The contract should also specify the procedures for resolving disputes between the employer and the employee, including whether disputes will be resolved through arbitration, mediation, or litigation.
Notice Periods:
The contract should define the notice period required for resignation or termination by either party. This period allows both the employer and the employee to plan for the transition.
