In every organization, whether it is public or private, small or large, everyone has rights and responsibilities. For example, the employer has a right to expect certain levels and standards of performance from employees, and employees have a right to expect certain conditions from employers. On the other hand, the employer is responsible for the successful running of the organization, while employees are responsible for assisting in its efficient and profitable running.
Under common law, an implied contract of employment exists between employers and employees. It may be either:
- Written – a formal agreement signed by both parties
- Verbal – an informal agreement
Human Resource Managers are aware of the benefits of having staff, particularly those in senior positions; enter into written contracts of employment. This dispels misunderstanding about obligations and duties, and ensures that employment requirements and benefits are covered. A properly drawn up contract should avoid disputes having to be settled by litigation.
Written contracts are explicit and should show more than the expected hours of work and rates of pay. Both parties have input to the terms of the contract, and details of all aspects of employment should be set out clearly.
Some essential factors to be considered in a contract of employment are:
- Salary and wages
- Hours of duty
- Duties and responsibilities
- Supervision, including reporting requirements
- Bonuses and overtime
- Work location
- Requirement to travel in the course of duty
- Policies and procedures for promotion and/or discipline
- Handling of confidential information.
Confidential information in here as confidential of commercially sensitive information is a priority issue for organizations. They may request employees, or other organization with which they are dealing, to sign a confidential deed.
Additional clauses may be added to show the conditions under which the contract will be terminated – for example – after specified period of time or as a result of redundancy, retirement, redeployment, retrenchment, misconduct or some other circumstances.