Employment Contract : Offering Information on Employment Contracts

Employment Contract

An employment contract, which is also known as contract of employment or contract of services, is a type of an agreement or contract between two parties - the employee who is or hired for a specific work by an employer. The agreement or employment contract covers the responsibilities between the parties regarding their relations generally of social subordination and economic dependence.

What happens when a party does not comply with the clause under the employment contract?

Aside from the parties' responsibilities, the employment contract is also used to define what to and what not to do. Thus, the employment contract is also an agreement defining the obligations of both the employer and the employee. The employment contract can also serve as a protection or job security for a set term.

In the legal sense of bargaining, an employment contract is conceptualized as a force to counteract the imbalance or inequality of negotiating power that is inherent and must naturally exist in employment relationships. An employment contract when used as a contract of service has been differentiated from the term "contract for services" with the alterations to imply the difference between an "employed" person and one who is "self-employed".

How is covered in an employment contract?

An employment contract usually puts in detail the terms and conditions to specific commitments of both the employer and the employee. The various items usually provided with clarity in the provisions of an employment contract include the job title as well as the responsibilities and duties, wage, salary or compensation, standards for performance evaluation, health and medical benefits, other benefits applicable such as stock options or retirement plan, the duration of employment and grounds or basis of termination.

What clauses are found in an employment contract?

The following details can usually be found in an employment contract:
* the arbitration clause
* non-compete clause
* confidentiality or confidential work products
* choice of law clause that indicates which state or level of law courts the terms of the employment contract
* severance, which stipulates what the employee must receive when the contract must end before the agreed upon period, or if fired, is laid off or resigns

In addition, the termination clause in an employment contract describes the procedure or how, why and when will the agreement be terminated. It can also state if the employment contract is renewable and even if prior notice is needed before the actual date of termination. As an act of goodness, both employer and employee are required to treat each other fairly even if not explicitly written in the employment contract.