When you hire a new employee, how important is it to have an employment contract in place? Having a proper employment contract is often essential to meeting these legal obligations, so it is important to understand how employment contracts fit into your business.

What Is An Employment Contract?

An Employment Contract is a legally binding agreement between you (the business) and the people you employ (your employees).

It generally sets out the rights and responsibilities of both parties. This is particularly important as you owe several obligations to your employees under certain laws, and these obligations may also differ depending on the type of employee they are classified as.

An Employment Contract will make these clear from the beginning of their employment with you, and can also serve to protect your business’ interests (for example, settling IP ownership when you hire employees).

Who Are Your Employees & What Are Your Obligations?

Your team of employees makes your business possible. Your obligations to your employees depend on their type of employment – whether casual, part-time, or full-time – as well as a range of employment regulations. Not only is protecting employee entitlements a legal requirement, it is also important for maintaining a positive and productive workplace.

When Do You Need An Employment Contract?

You should enter into an employment contract with each of your employees when you bring them on board.

What Should Be Included In A Contract Of Employment?

A good contract will cover the basics such as salary and leave, as well as other important matters such as probation periods, ownership of intellectual property, confidentiality and termination rights.

You may also want to include restraint and/or non-solicitation clauses, to restrict the ability of employees to leave and compete with your business by stealing your customers and staff. If you have any specific requirements, it’s worth getting a lawyer to draft your employment contracts.

Employment Contract Example (UK)

Let’s say you’re hiring a designer as part of your marketing firm. What are the key thing you’d need to include in your Employment Contract with them?

You’d need to include the basics, such as their salary, leave entitlements and responsibilities included in their role.

You also want to settle matters around IP. For example, if the designer produces new designs during their employment with you, will they own that IP? If you want to retain ownership of their work, you’ll need to clarify this in your contract.

In addition, it’s ideal to think about matters that may arise even after their employment ends, such as restricting their ability to work with a competitor. This is where you’d include Non-Compete Clauses, or Confidentiality Clauses to protect your inside information and other trade secrets.

Need Help With An Employment Contract?

Having properly drafted employment contracts is really important for your business – it will protect your company from exposing IP and confidential information, and it helps you comply with your legal obligations as an employer.

At Sprintlaw, we have a team of experienced lawyers who can assist you with drafting or reviewing an employment contract for your business. Get in contact with one of our consultants for a no-obligation chat on how we can help you put together an employment contract and help with any other legal issues your business may have.

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