What should I include in employment contracts?

What should I include in employment contracts?


When employing staff, what are the key principles to be included in their contracts – i.e. apart from the standard terms and conditions is there anything that is sometimes not included that comes back to haunt business owners especially as they expand? 

It is important that the employment relationship is flexible enough to ensure that it can meet the changing needs of a business.

In this regard it is useful to include provisions in the employment contract that make it clear that the requirements of an employee’s position may change over time. This avoids the situation where employees try and argue that a particular task does not fall within their job description.

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The same applies in respect of relocation to other branches or even geographical areas. The agreement should also provide that the employee agrees to work overtime as and when required.

Where the employer has policies and procedures in place, it should also be recorded in the employment contract that these are subject to change at the discretion of the employer.

Without this flexibility it often happens that employers become the victims of their own unworkable policies and procedures which they cannot change without the consent of the employee.

The same flexible approach should be adopted when dealing with salary increases and bonuses. These should be at the discretion of the employer because as the business grows and more employees are recruited, they will expect similar benefits.

The end result is that what often started out as a well-intended gesture from an employer towards one or two employees, becomes an expensive obligation which can have an impact on cash flow and profitability.

With the necessary flexibility built into the contract employees can still be rewarded for their contribution, but in a manner that is sustainable for the business.

What are the contractual differences (even if only in time) and/or differences in obligation between casual and part-time employees? And, in turn, between casual/part-time and full-time employees? Is it a good strategy when expanding to rather employ casual/part-time staff? 

While the term ‘casual employee’ is commonly used, the term actually no longer has any basis in law. In practice, however, the term refers to temporary employees who are employed on an ad hoc basis.

A part time employee is an employee who is paid in relation to the time that he has worked and who works fewer hours than a full-time employee. A part-time employee can be employed on a fixed-term or permanent contract.

Our labour law has recently been amended with one of the main aims being to protect employees who are not employed on a full-time or permanent basis.

As a result a part-time employee may not be treated less favourably than a full-time employee doing the same or similar work, unless there is a justifiable reason for doing so.

It is not advisable to try and build a business using employees who are not employed on a permanent basis. These employees now have sufficient grounds to challenge the employer when it comes to remuneration and benefits and, in appropriate circumstances, to claim permanent employment.

Can employment contracts be watertight when it comes to confidentiality or is it difficult to truly protect my IP?

While an employer does have the right to protect its IP, there is no such thing as a watertight contract.

The effectiveness of the provisions dealing with confidentiality will depend on how it has been drafted and the facts of any specific breach.

In order to try and prevent and limit the disclosure of confidential information the company should make it clear in the employment contract that it reserves the right to monitor, intercept and review its employees’ use of the company’s IT resources and communication systems.

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What can I do contractually to protect my firm around theft/fraud?

This is not really something which is normally done through the employment contract. However, depending on the industry in which the employer operates, the contract may provide for random searches of employees or that background checks may be performed from time to time. Of course, all of this needs to take place without violating an employee’s right to privacy and dignity.

Outside of the employment contact, employers should ensure that they have appropriate systems in place to detect this type of behaviour and that employees are disciplined accordingly.

The normal sanction for such conduct is dismissal. The matter should also be reported to the police so that criminal proceedings can be instituted against the employees.

How do I protect my firm around social media and the use of it in direct relation to the firm – is this now standard in employment contracts?

Given the extent to which social media is now part of everyday life, employers are increasingly seeking to regulate its use in the workplace.

This can be done through a Social Media Policy which stipulates the circumstances in which social media can be used, if at all, and which at the same time ensures that the company’s IP and confidential information is protected.

The policy should also provide for disciplinary action to be taken in the event of a breach of the policy.

The company should also reserve the right in the policy, or employment contract, to monitor, intercept and review, without further notice, an employee’s use of the company’s IT resources and communications systems, including but not limited to social media postings and activities.