Businesses often engage employees without adequate written employment contracts. In a recent blog, Better HR identified that many businesses are lacking compliant contracts of employment. For such businesses, this is a common pitfall as disputes arise later in the employment relationship and lead to unnecessary litigious process. Would you enter into a contract to buy goods or services such as a vehicle without a contract setting out loan terms, and interest rates? The answer most likely will be no.
Three good reasons to have a properly drafted employment contract include:
1. Clarity
A written employment contract will clearly highlight an intention to create legal relations. This will allow clarity of the employment relationship and will be easily proven compared to oral agreements. It helps identify an employee’s status and whether they are an employee or contractor.
2. Evidence
A compliant employment contract will set out express terms and give specificity to the engagement of an employee. It creates evidence of duties and responsibilities an employee is assigned. Any underperformance of the defined terms will give grounds to an employer to take any reasonable actions against an employee. However, this will work reciprocally with employers acquiring duties such as a duty of care. Therefore, in the absence of a written employment contract, it will create uncertainty.
3. Protection
A written employment contract will ensure you are protecting your legitimate business interests. Employers may want to prevent employees from divulging any acquired confidential information during and after their employment is finished. If an employer suspects an employee is misusing their acquired confidential information, then a clearly written employment contract can give proof to an alleged breach of contract. Therefore, in the event of a dispute, the contract can be used as evidence and protect the business during employment and post-employment.
Ultimately, a compliant written employment contract will ease the pain in the event of the relationship going sour.
Need help to generate compliant written employment contracts?
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