5 Constituents of an Employment Contract


Transitioning from educational life and adjusting to professional life can get quite overwhelming for most of us. As we step into the blue oceans, not knowing what the future holds, we vigorously browse through the options to get access to some of the best options. Mostly, we secretly wish to land in an organization with the best employment opportunities.

While we may or may not achieve the best employment opportunities, there continue to exist some established business hubs around the globe that young international employees long to get into. For instance, the articles and policies constituting New Zealand, Australia, Switzerland, Dubai Labour Law, are known for maintaining high global rankings for employment preferences.

Nevertheless, it is not an easy process for organizational heads to acquire the top slot in the global rankings. Instead, immense effort from the HR departments and the country’s economic preferences goes into winning the position. With that being said, here is a look at some of the considerations that constitute a viable employment contract.

  • Scope of Employment

Details of the job description with responsibilities of the employee are important constituents of the employment contract. This section of the contract clarifies the entire set of roles and responsibilities given to the employee, before officially starting with their position. All the details relating to the goal completion, promotion/demotion, transference, or any increase/decrease are included in it. Many organizations tend to discuss the travel and relocation policies with the scope of employment too.

  • Compensation

This is the most crucial and fascinating aspect of the entire employment agreement. The compensation block appears in the first section of the contract and displays the wage figures that our keen eyes scrutinize. It includes all possible bonuses, pensions, health plans, insurances, add-ons, and so on, in addition to the base wage. It also extends to any situations in which compensation may be decreased or canceled. This can be a result of penalties, suspensions, or termination in adversarial cases.

  • Terms and Termination

We all are well aware of the fact that no single contract can last forever. Instead, it requires some changes over time to keep up with the organizational changes and the need for time. However, along with the additions, it is also able to help the organizations retain good employees, and renew their employment contracts while keeping the bad ones at bay.

While this is the case for those who are on a limited contractual basis, others hire employees on unlimited contracts. Although there isn’t a specific timeline for the employment duration, it can end if there is any breach of contract. It is also the cease if it causes any detrimental effects to the business or the organization in any way. Therefore, companies always attach a termination clause to keep their company safe from the possible breaches that can be caused by the employer.

  • Probation Period

The probation period varies across organizations. A general idea is that the companies can enforce this period as a trial to assist the capabilities of the employees. After that, they can decide if they can account to become a viable business resource. Therefore, employers make sure that the new employee will prove to be a valuable resource to the organization. Similarly, it is crucially important for the employee at the probation period to showcase some of their most valuable skill sets. They should follow the training guidelines, ace the assessment standards for selection process and land the desired employment position.

  • Non-competition

Employee turnover is quite common and certain. While there are ways to reduce it, it never is fully eliminated. With time, employees gain experience and jump on to the next opportunity that they can grab. And if they make the switch in the same industry, the relevant industry knowledge pays off. It gets them a good starting package and numerous employment benefits too.

However, with the inclusion of the ‘non-compete’ clause, any company can prevent its former employee from opting for a new position in their competitor’s industry. It applies for a certain period when making the switch. To ensure its applicability, the employees make sure that the clause is reasonable in terms of time and geographical scope, when making it binding on the employees to follow. For instance, some organizations tend to prohibit the competition in a five-mile radius or lock a time of 1-2 years before coming into the same industry.

  • Non-Solicitation

Just like the non-compete clause of the employment contract, the non-solicitation is the further extension of it. Inclusion of these components prevents the employee entering the contract from soliciting, accepting, or discussing the employment with any competing business to other employees. It prohibits the company from utilizing the company’s clients, resources, or any contacts for personal gains after leaving the company.

  • Assignment

This is an exceptionally essential provision, in which an individual innovation was created with business gear, funds, or time. An assignment is a trick for all provisions that adds to the work for employment conditions. It likewise shows that the employee consents to allocate any works produced by the representative that is not a piece of the work for recruit understanding.

  • Confidentiality

Workers will habitually be informed on secret material to execute their work. Under the conditions of a secrecy arrangement, the worker consents to never uncover this data to an outsider. It also plays it safe to keep away from inadvertent openness. Except if and until the actual information stops being confidential, this kind of arrangement often keeps going much past the actual gig.

  • Employee Benefits

Benefits make a proposition for employment engaging. Your benefits bundle is much of the time as critical as, if not more so than, your pay. A full-time worker’s standard advantages bundle will incorporate medical coverage, extra security, inability protection, and commitments to a retirement plan. Organizations might give investment opportunities or full possession to significant level representatives notwithstanding protection and annuities.

As a component of a brilliant bind, the stock might be given on vesting plan or as fixed-value choice. Most of the motivation plans incorporate a one-year bluff before the representative might begin to receive any significant rewards. Consider including a duty conveyance assuming you’re circulating value, to pay the worker’s additional duties because of getting the advantages.

  • Alternative Dispute Resolution

Managers oftentimes need intervention before either side might sue on the off chance that there is a conflict over the work arrangement. This empowers a transparent discourse outside of court and can set aside time and cash. Assuming intercession neglects to determine the issue, a few agreements specify that the conflict settles through restricting mediation. That too, to suit to accomplish a quicker and more financially effective end.

  • Employee Liability Protection

Enlarging the security of a restricted risk company to a representative calms strain on them when they need to settle on critical choices that have a business-wide effect. For a supervisor or chief to be compelling, they should have the option to settle on tough choices without risking their wellbeing. Official protection, just as ordinances that consider specialist repayment are parts of worker restricted obligation.

The Takeaway

Assuming you are thinking about utilizing your first employee, talk with a legal advisor about the things that should be included in an employment contract. Legal lawyers in Dubai help organizations in formulating the best business designs that benefit the two workers and proprietors.


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