Employment
Illustrative articleUnderstanding Employment Contracts: Key Considerations for Employers
A well-prepared employment contract gives both employer and employee a shared understanding of the role. Here are the areas employers commonly need to think through.
Brian KiprotichSenior Associate (sample)2 min readIn summary
- The contract should reflect how the role actually works.
- Templates are a starting point, not a final answer.
- Contracts and workplace policies should be consistent with each other and reviewed periodically.
An employment contract is more than a formality at the start of a working relationship. It records the terms on which someone is employed and is often the first document consulted when questions arise later. For employers, a clear and accurate contract can reduce misunderstandings and support fair, consistent management.
This article highlights general considerations. Employment law sets minimum requirements that must be checked for each role, and specific advice should be sought before contracts are issued.
Describe the role accurately
The job title, duties, reporting lines, and place of work should reflect how the role will actually operate. Where flexibility is needed, for example to change duties or locations, the contract should say so in clear terms.
Pay and benefits
Set out remuneration, when and how it is paid, and any allowances or benefits. If bonuses or commissions are discretionary, the contract should make that clear, as should the basis on which they are calculated where they are not.
Working time and leave
Contracts should address working hours and leave entitlements. Employers should check that what the contract offers is at least consistent with the applicable legal minimums, and with how the business operates in practice.
Confidentiality and intellectual property
Where employees will have access to confidential information or create work for the business, the contract should address confidentiality and the ownership of work produced in the course of employment.
Ending employment
Notice periods, the circumstances in which employment may end, and any obligations that continue afterwards should be clearly stated. Any post-employment restrictions should be considered carefully, as their enforceability can depend on their scope and the circumstances.
Keep documents consistent
- Check that contracts and the staff handbook do not contradict each other.
- Review templates when roles, practices, or the law change.
- Record changes to terms in writing and with the employee's agreement where required.
- Keep signed copies securely and in line with your data protection obligations.