An employment contract should be well prepared. It needs to be well drafted, with words and details carefully chosen and reviewed. It should also be reviewed with state and federal legislation in mind; and this should preferably be done by an expert to catch phrases and words that might lead to misunderstandings and might cause a suit to be filed in court and cause further legal headaches. The main goal, of course, is to make sure that the rights of both employee and employer are protected.
Here are some of the advantages of a well drafted employment contract:
1. A well written, expertly prepared contract of employment clarifies the employee’s job responsibilities. It gives a clear description of the job as well as what the company expects from the employee. Usually, this kind of an agreement also includes the job performance requirements and the organization’s requirement that the employees adhere to company policies.
2. If there are trade secrets that the company wants to remain confidential because they are critical to the business, a contract of employment can certainly help keep them confidential. This is done through a confidentiality clause or a non compete clause in the agreement. A non compete clause or a confidentiality clause would typically state that the employee cannot disclose information about the company and other details about the business to others, work for business competitors and solicit jobs from the company’s clients. Most of these clauses indicate a specific time or period that it would remain in effect; for example a particular number of years.
3. A well prepared contract or an agreement would leave no room for misunderstanding, legal disputes and headaches.
4. It can also help make sure that employees that are critical to the organization are retained or at least they don’t leave with the company totally unprepared. The agreement should state clearly that the employee must give a specific number of days of notice before they leave the organization. This helps the company find and train a new employee.
5. Both the employer and employees would be very clear on the conditions of employment if it is clearly stated and well written on the contract. This would typically include a discussion of a probationary period, if there is one, and the continuation or extension of employment if job performance requirements are met by the employee. This should also include the evaluation. As we know, an agreement like this would usually mention that continued employment is contingent on the employee’s compliance with company policies and on job performance.
6. A well prepared contract leaves no room for confusion over the employee’s salary. This should be stated in terms of payroll increments, not yearly terms to make sure there is no misunderstanding – yearly terms could lead the employee to expect at least a year’s employment. This could be a problem if the employer is not promising, expecting or thinking in terms of a full year of employment.
7. A well drafted employment contract would help both employer and employee have a better understanding of the employee’s status and the specific periods or dates covered, if applicable.