A Comprehensive Guide to Employment Contracts

A written agreement between an employer and an employee that specifies the length, terms and other aspects of the employee’s employment is known as an employment contract. It can be implied, oral, or written, and usually requires the employee to sign a lengthy physical contract. The terms of the contract are determined by what was agreed upon when the employee expressed their willingness to work. It defines both the employee’s and the employer’s rights and responsibilities. It is recommended to have a signed copy between both employer and employee to avoid any issues

Purpose​

The primary purpose of an employment contract is to provide job security to the employee while also protecting employers from risks such as lower productivity, poor performance and ethical concerns. These contracts ensure that the parties involved will follow the organization’s rules and that an effective dispute-resolution process is adopted when the need arises.

Our Knowledge Center details everything you need to know about employment contracts that are usually used.

Type of Contracts​

There exist multiple employment contracts which can be utilized by employers as per their needs

Full-Time Contract​

The most common type of contact used. You can refer here for more details

Fixed-Term Contract​

Employees whom you wish to evaluate performance before hiring are generally hired under this contract. You can refer here for more details

Short-Term Contract​

Employers hired for specific projects or requirements are usually hired under this contract. You can refer here for more details.

Part-Time Contract​

These are provided to employees who work less than a full day. These employees are known as part-time employees and work fewer hours than full-time employees. Benefits and bonuses are typically excluded.

Zero-Hour Contract​

Employees who work intermittently or only when jobs are available are given zero-hour contracts. An employer commits to offering work when it becomes available, either in writing or verbally, in a zero-hour agreement, and an employee agrees to work such hours or be on call for availability reasons.

Casual Contract​

Casual contracts are typically offered to employees who work on a seasonal or temporary basis. Employers typically stipulate in casual contracts that employees will only be paid for completed work and that the company is under no obligation to provide a certain number of shifts or work hours. Furthermore, such contracts may state that employees are not required to accept any provided shifts or work hours.

Freelance contract​

These Contracts are similar to the Short-Term Contracts described above

At-will contract​

An at-will agreement is a type of employment contract that appears to be a contract but does not provide many benefits to employees. At-will agreements frequently cover the same ground as contracts, but they rarely specify the length of work or provide specific rights. As a result, at-will agreements allow employees to leave jobs whenever they want and employers to fire them for no reason, making such agreements difficult to enforce in the event of a disagreement.

Service or Consultancy Agreement​

A consultant agreement is typically used when an organization wants to hire someone who will not be working for them. A consultancy agreement is always required if a person is going to be self-employed (contract for services).

A contract for services is a common legal term that has no legal definition. In employment and tax regulations, a contract of service is referred to as an employment contract in similar terms to a Short-Term Contract

Secondment​

Under a secondment agreement, an employee is leased by his or her employer to another part of the same organization, another organization within the group, or an external organization. During the secondment period, the individual is still employed by the original employer. He or she is not transferred to the host company or department where he or she is currently working. The Employment terms of the agreement will be the same as what was agreed with the employer who has leased the employee.

Gig-Worker Agreement​

A gig worker is a similar contract to a services contract, wherein the employer will enter into a service agreement rather than an employment agreement. You can refer here for more details

Conclusion​

An Employer has the option to adopt any of these standard employment contracts based on their needs. Employees must understand the specific nature, advantages and issues with the contract before agreeing upon the same.

We at Knighthood have been working with over 100+ organisations for over 5 years. We focus on ensuring high service levels at affordable prices. You can read more about why our customers choose to work with us.