What belongs in an employment contract

Aug 29
3 min read

Updated: 4 days ago

Introduction

A small business downloads a contract template, changes the name and the salary, and issues it. It was written for a different country, a different size of business and a different kind of role, and nobody reads it again until there is a problem.

At that point the contract is the only thing that decides the argument. Some of its content is required by law and some of it is the terms that turn out to matter — notice, hours, place of work, what happens to customers and information when somebody leaves. A template addresses the first poorly and the second not at all.

1. What belongs in an employment contract starts with what is legally required

Establish the mandatory list first.

Most jurisdictions require a written statement covering specified particulars within a set period of starting, and the list is prescribed. Find out what yours requires rather than assuming a template covers it, because the requirements differ substantially.

2. Be precise about hours and pay

Where most disputes begin.

Contracted hours, how overtime is treated, when pay is made, and what happens with additional hours. Vague wording such as hours as required creates arguments about both pay and availability that could have been prevented in a sentence.

3. State the place of work properly

More important than it once was.

Whether the role is at premises, at home, hybrid or mobile, and whether you can require a change. Employers who assumed flexibility discovered during widespread homeworking that their contracts said something quite different.

4. Set notice periods on both sides

Protects the business and the employee.

Notice from the employee determines how much handover you get; notice from you determines cost. Statutory minimums usually apply and can be improved on, and a longer period for a critical role is worth agreeing at the outset.

5. Deal with confidentiality and information

Frequently the most valuable clause.

What is confidential, what happens to it on departure, and access to systems and records. Small businesses lose customer lists and pricing information regularly, and without a clause the position is far weaker.

6. Consider restrictions after employment carefully

Enforceable only when reasonable.

Clauses preventing somebody working for a competitor or approaching your customers are subject to strict tests in most jurisdictions, and an overreaching one is frequently unenforceable in whole. Narrow and specific beats broad and ambitious.

7. Say who owns what is created

Relevant to more businesses than expect it.

Designs, code, written material, photographs and processes created during employment. The default position varies, and where the work product is the business's main asset it should be addressed explicitly.

8. Reference policies rather than incorporating them

A practical distinction with real effect.

Keep disciplinary, grievance and absence procedures as separate policies referred to in the contract. Written into the contract itself, they become contractual terms you cannot update without agreement.

9. Issue it, get it signed, and keep it

The administrative half.

Provide it within the required period, have it signed, keep a copy, and record any subsequent change in writing. Contracts that were discussed but never issued, or varied verbally, are the common cause of an unwinnable dispute.

Get it checked by somebody who knows the employment law where you operate. Template contracts are a reasonable starting point and a poor finishing point, and the cost of a review is trivial against the cost of one contested departure.

Conclusion

Cover what the law requires and then the terms that actually decide later arguments.

Establish your jurisdiction's mandatory particulars rather than trusting a template, be precise about hours, overtime and pay dates, state the place of work and whether it can change, set notice periods on both sides, address confidentiality and the return of information, keep post-employment restrictions narrow enough to be enforceable, say who owns what is created, keep procedures as separate policies, and have it reviewed by somebody who knows the local law.