Contracts are an essential part of the business world, legal agreements between various entities that outline what each party is responsible for. In this article, we take a look at the components of an employment contract, outlining important sections that should be included.
Different Types Of Employment Contracts
There are two ways in which an employer and employee can agree; either verbally, or a written agreement, with the latter being standard practice all over the world. A verbal contract might involve two parties with one agreeing to pay the other to relocate some equipment; if both know each other, a verbal agreement is all that is needed, whereas a company employing staff would demand a written contract of employment. If you are setting up a company, there are contract drafting lawyers in Saudi Arabia with many years of hands-on experience in drafting contracts of employment.
Key Components Of An Employment Contract
The key components include the following:
- Personal details of employee – Name, gender, age, home address and phone number.
- Employer details – Name of company, address CEO, email address, phone number.
- Job title – Complete with a full job description that includes responsibilities.
- Salary – Rate of pay, overtime rates.
- Hours of employment – Regular and OT.
- List of job benefits – This would typically include sick pay, annual leave and employer contributions.
- Probationary period – In some cases, there might be a period (3 months) called probationary, which means that either party can terminate the agreement at the end of the probationary period. This is typical with general labour hire when the employee would be assessed during the probation period.
- Notice period for employment termination – This would be in accordance with local laws.
- Duration of contract – In most cases, the duration is open-ended. Starting on the date recorded, with either party having the ability to terminate by giving the required notice. In some cases, the contract might be for a period of 1-3 years, with perhaps an option to extend.
The Importance Of Legal Advice
When setting up a business, one of the most important documents is your employment contract, which all your workers will adhere to. By hiring an employment law specialist to draft your employment contract, you can be sure that the contents fully comply with local employment laws. After an initial consultation, the lawyer would create a draft for your approval and subject to any minor changes, the draft would become the contract of employment used when hiring.
Additional Content
Some employers like to issue new employees with a handbook to help them familiarise themselves with the company and the workplace environment. It might be in the form of a presentation pack that includes a short DVD about the company and literature about staff training options. Again, using a professional business lawyer to draft this material is recommended; some companies wish to give new employees details about the company’s history along with long-term goals to help the employee feel part of an organisation with firm direction.
Non-Disclosure Agreement (NDA)
Some companies are concerned about confidential aspects, such as designs or processes they have developed and having all relevant employees sign an NDA, protects the organisation. Trade secrets are common and NDAs are a good way to ensure that confidential information remains within the perimeters of the company premises. The penalties for breaking an NDA would be substantial and might even lead to a prison sentence.
Aside from the contract of employment, many other legally binding documents need to be drafted by a business lawyer, who is the best person to draft important contracts.
