What to Look Out For In a Contract of Employment

Research shows that many workers have not properly read their employment contract, even though it governs their working conditions. This guide tells you why you should read it and what you should look for.

According to a recent survey by Which (published in Hrmagazine.co.uk), 1 in 4 workers admitted to only skim reading their employment contract, while 6% admitted that they had not actually even read the employment contract. This is a surprising finding, considering the significance of the document, and most likely reflects a widespread ignorance/lack of understanding of the purpose of such a document. It can also be a reflection of the fact that employment contracts are not that easy to digest as they are full of complex terminology and legal clauses which can be confusing and even intimidating.

In this article, we seek to demystify the employment contract, by explaining its overall purpose, the benefits and protections it provides to you, key terms to look out and what to do if the contract terms seem not to comply with employment law.

Why do I need an employment contract

An employment contract is more accurately termed an employment agreement, and its purpose is to clearly define the expectations and obligations between employee and employer. If something were to go wrong in the future, for example, a dispute relating to your entitlement to pay for example, then this dispute could easily be settled by referring to this signed employment agreement.

Also, if the employer were to experience a change of heart and suddenly decided that they wanted to remove some benefits or increase your working hours, they could not do this as they are bound by an employment contract. If they did try to change it without your consent it would be a breach of contract and you could take legal action.

Therefore, the employment contract is of benefit to you.

Quick Employment Contract Health Check

While employment contracts will differ between employer, there are a few terms that you expect to see in all good employment agreements and I have set these out below. If you do not see these terms, then you should query it.

Governing State: Your employment contract will be governed by the laws of the state stipulated under this term. This should always be included in a contract and if it does not appear it can suggest that the contract has not been prepared in a thorough manner.

Employer and Employee: You should expect to see at least the company name, address and telephone number referenced at the top of the contract. A credible company should have a geographical address mentioned in the contract.

Job Title and Job Description: This is a crucial part of the job description as it explains exactly what work the employer can require of you. It is important that you read and understand this section carefully, because if you sign up to this agreement and do not conform to your contractual job title/description you will be in breach of contract and could face disciplinary action or dismissal. However, this clause also provides you with a degree of protection, as the employer cannot substantially change your job without your consent.

Terms of Employment: Check this very carefully. It should say permanent or temporary depending on what you were offered, and if there is a probationary period, it should indicate what the length of it is.

Vacation: There are minimum vacation requirements for each jurisdiction. If the holiday entitlement is below the minimum, then you should query this.

Place of work: Often overlooked, but very important. A place of work, should be specified. If your employer changes office location and you do not have a specified place of work, it will be harder to negotiate relocation entitlements.

Notice Period: There are minimum notice entitlements required by law, so if the employer is offering less notice then the minimum you should query it. If you are made redundant or dismissed you will most likely need as much notice as possible.

Restrictive Covenants: Some employers will prevent you from working for their competitors for a period of time after you leave. This period of time can be from 6 months to a year. This may reduce your employment chances when you leave so always be aware and try and negotiate as short a time as possible.

So the next time you have to sign an employment contract, why not check out this employment agreement health check to help ensure you enter the agreement with open eyes.