Employment contract

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Employment contract

Employment contract is a contract that consists of all the responsibilities, duties, rights and employment conditions. That is used to keep the legal relationship between the employer and employee. It is a legal terms and condition which tie the employer and employee.

Two Types of Employment Contracts.

The two different types of employment contracts are permanent contracts and fixed term contracts. Permanent contracts are relevance to the employees who work regular hours and paid on an hourly salary basis. It can be considered as a permanent employee agreement. It is an active contract unless in the case if the employer terminates the employee or in the cure if employee resigns.

1. Permanent employment contracts

Permanent Employment contract is a document that wraps necessary terms of employment. It should include all the details lamented in section-1 of the Employment Rights Act 1996. It should include the employer and employees name, starting date of the job, salary details, work hours, sick leave, policy of requirement, period of notice, work place, job role besides extra benefits like special allowance, perks, commissions etc.

The main advantage of the permanent employment contract is the employee gets job securing benefits including insurance policies. It also provides the retirement benefits. The maximum time for the extension is within two months of employee appointment.

General points require to be included in the contract.

Listed below are the general details required to be included in the contract;


  1. Compulsory information

    • Employer and employees name, employees address, work place, tittle or designation of the job along with the KRA and job description and employment commencement date.
  2. Information regarding.

    • Salary and other benefits.
    • Employees salary or age.
    • Extra schedule if applicable.
    • Eligibility of any other payment.
    • Payment method and calculation of the wage.
    • Extra benefits and scheme of pension.
  3. Kind of contract.

    • Type of contract is permanent.
    • In case if the employee is terminated then the notice period.
  4. Hours of working.

    • Work hours per day.
    • Work schedule.
    • Definition of extra schedule.
    • Staffing meal intervals
    • Attendance
  5. Leaves

    • Annual leave.
    • Circumstances for taking leave l.
    • Sick leave & paid leaves.
  6. Disciplinal procedures.

    • Information of disciplinary procedure.
    • Conditions of termination.
  7. Grievance handling.

    • Definition and employee's right to union representative.
    • Contract of permanent employment which includes the details of each step of grievance procedure.
  8. Safety and health.

    • Employee and employer duties.
    • Active safety measures in the company and guidelines the employee should follow.
  9. Period of probation

    • Definition and motive, advantages that employees will get according to the permanent term employment contract.
  10. Performance and Analysis.

    • Standard norms for performance analysis.
  11. Policy of retirement

    • Laments the retirement policy followed by the employer.
  12. Uniform provision.

  13. Assent

    • The employee's assent to the details lamented above and other conditions mentioned by the employee. Always cross check the terms and conditions of the contract in depth.

Recent Updates

New Inclusions For An Employment Agreement During The COVID19 Era

Oct 7 2020

1. Availment of Leave in case an employee has been affected by Covid19.
2. Payment of salary in case an employee has contracted Covid19 and cannot work.
3. Change in termination policy in case an employee has contracted Covid19 and cannot work.
4. Work from home policy, need for a comprehensive and long-term work from home policy, covering rules for work-timings, mode of communication, etc.

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