Importance Of Employment Contracts - Know Their Value

Importance Of Employment Contracts - Know Their Value

By Abhishek Agarwal

Anyone who works for an employer for a regular wage or salary automatically has a contract of employment, regardless of whether it is written or not. The majority of employees work under open-ended contracts of employment. In other words, the contract continues until such time as the employer or employee ends it.

Many other employees however, work under fixed-term or specified-purpose contracts which are contracts which end on a specified date or when a specific task is completed. The contract of employment will include some or all of the following elements (regardless of whether the employer and employee have specified them or not):

The terms that the courts say are in every contract of employment. Examples include the duty of every employer to provide a safe workplace and the duty of every employee to carry out the job to the best of his/her ability. This part of the contract is occasionally referred to as "common law".

Terms that must be part of the contract as a result of laws passed. Examples include the right to take maternity leave. Such terms are part of the contract of employment even if the employer and employee do not specifically include them and replace any agreement between the employer and employee not to apply the particular law. So, the statutory right to take maternity leave overrides any agreement between the employer and employee that the employee will not take maternity leave.

Terms and conditions states must be in every contract, for example, the right of an employee to join a trade union.

Collective agreements

Joint Labor Committee Regulations

In addition, custom and practice in a particular workplace may form part of a contract. An example would be a particular level of overtime pay for employees.

In the case of these items instead of giving each employee the details in writing, the employer may refer an employee to other documents, for example, a pension scheme booklet or a collective agreement, provided that the employee has easy access to such documents.

The statement of terms must indicate the reference period being used by the employer for the purposes of the calculation of the employee's entitlements under the Minimum Wage Act, 2000. (Under that Act the employer may calculate the employee's minimum wage entitlement over a reference period that is no less than one week and no greater than one month).

The statement of terms must also inform the employee that he/she has the right to ask the employer for a written statement of his/her average hourly rate of pay for any reference period (except the current reference period) in the 12 months prior to the date of the employee's request.

Note. Specific provisions in contract of employment

In recent times, some employers are adding in specific provisions in contract of employment that limit the ability of employees to work in a certain sector, with certain suppliers, clients, for a period following termination of employment. (For example, it may specifically state that the employee cannot work in a certain sector, with or for suppliers or clients of the former employer, etc.). There is nothing in employment law in that strictly forbids this, but there is no provision in employment law that allows this either.

Essentially, this is an issue of contract law - that is, the contract of employment signed and agreed between the employer and employee. If you have any concerns about this issue, you are strongly advised to seek legal advice from a competent legal professional in advance of signing this contract of employment. However, even if the contract of employment is signed, you are always free to seek such legal advice. Attorney fees can vary widely so shop around and obtain some quotes for legal advice before you proceed.

Note. Probationary period

The contract can include a probationary period and can allow for this period to be extended. The Unfair Dismissals Acts will not apply to the dismissal of an employee during a period at the beginning of employment when he/she is on probation or undergoing training provided that:

* the contract of employment is in writing

* the duration of probation or training is one year or less and is specified in the contract.

The above exclusion from the Acts will not apply if the dismissal results from trade union membership or activity, pregnancy related matters, or entitlements under the maternity protection, parental leave, adoptive leave and career's leave legislation.

Changes to your contract of employment.

Changes to your contract of employment can occur due to a change in the law, but otherwise, changes must be agreed between your employer and yourself. The requirement for both the employer's and the employee's consent to changes in the terms of the contract is part of contract law.

From the above information you will see that the contract of employment is a very important document to have. Whenever you get hired, ensure that your new employer offers you this kind of security. Be cautious of employers who don't give contract of employment.