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Contract of Employment: Definition, Example and Related Terms

What is a Contract of Employment ?

A Contract of Employment is a legally binding document that outlines the terms and conditions of emlpoyment between an employer and an employee. They are of critical importance in providing legal protection for both the employer and employee. Employment contracts can also be written or verbal.

Employment contracts must align with the overarching legal framework. Employers must ensure that an employment contract complies with all relevant legislation. This directly impacts the enforceability of that contract itself.


  • Key elements of an Employment Contract
    Key Element Description
    Job Description Description of the employee's role and responsibilities
    Duration of Employment Whether the employment is permanent, temporary, or for a fixed term.
    Compensation and Benefits Details regardnig the employee's salary or wages, including the amount, pay schedule and method of payment.
    Work Hours Expected work hours, including part-time or full-time status and any flexibility in scheduling.
    Location Details of the location of work
    Probationary Period Some contracts include a probationary period during which the employer can evaluate the employee's performance and fit within the company.
    Confidentiality Clauses that require the emlpoyee to protect the company's confidential information which is often paired with an NDA.
    Non-compete clause Some contracts can include a non-compete clause that restricts the employee from working with direct competitors or starting a similar business within a certain geographic area and time period after leaving the company.
    Termination Conditions The contract should outline how the employment relationship can be terminated by either party, including notice periods and any related severance pay.
    Dispute Resolutions Provisions for handling disputes that may arise from the employment relationship, which could include arbitration or mediation requirements.
    Applicable Law The jurisdiction which will govern the contract.

Related terms