Employment Contract | Meaning and Definition

What is an employment contract? 

An employment contract is a signed agreement contract between an employee and an employer (or between a labor union).

In short, it is defined as the working relationship between two parties (i.e.) the relationship between an organization and an employee.

What is a contract job? – It is a signed agreement between the employee and the organization for short-term contract work. A work contract agreement/contract to hire agreement will be enforced in this scenario as well.

What is included in an employment contract letter?

  • Wages – The contract work agreement includes the agreed wages, salary, or commission between the two parties.
  • Time period – The employment contract includes the total number of days or hours that an employee has to work for the organization.
  • Time Duration – The length of the time (or the years’ duration) an employee agrees to work for the organization will also be included in the contract.
  • Responsibilities – Upon employment, what are the duties an employee has to fulfill for the organization, and that has to be included in the employment contract.
  • Confidentiality – Apart from a non-disclosure agreement, some employment contracts have a statement regarding the confidentiality in the employment contract.
  • NCC – Some employment agreements have a noncompete clause that states that when an employee leaves an organization and joins a new competitor organization, it is against the company’s legal policies and that has not to be done by any employees working in an organization.
  • Benefits – The contract employee agreement should include all the benefits offered by the organization, such as insurance benefits, perks, vacation leave, and much more.

What are the different types of employment contracts?

Written Employment Contracts – A written employment contract is an easy way to clearly define the roles and responsibilities, benefits, etc., in a neat form to prevent or avoid confusion.

Implied Employment Contract – During an interview or job promotion, there are certain things that will get inferred at this point of time and added to the contract, and this is called an implied employment contract.