Essentials for an Employment Contract

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A contract of employment can be composed in many different ways, but there are a number of requirements in the legislation that must be complied with for the employment contract to be valid. We describe here how to make a good employment contract that meets the requirements of the law.

Certain essential information is a minimum requirement

Although an employment contract can be written in many different ways, there is a number of information that must be included in an employment contract for it to be valid under the law. The Employment Certificate Act describes a number of information that must be included in the employment contract, regardless of the type of employment involved. Therefore, you must ensure that the following information appears in your employment contract:

Particulars Information

Name and address of employer and employee.

Execution of the

work The location of the work place or in the absence thereof, where the work is mainly performed.

Field of Work

Description of the job or indication of the employee's title, rank, position or job category.

Accession The

beginning of the employment relationship.

Duration The

expected duration of the employment relationship in the case of fixed-term employment.

Vacation

Employee's rights with regard to paid vacation, including whether pay is paid during holidays.

Termination notice The

duration of the employee's and employer's notice of termination, or the rules thereon.

Salary and allowance

The current or agreed salary, which the employee is entitled to at the start of the employment relationship, as well as the salary payment terms. In addition, description of allowances and other salaries not included in the salary itself, e.g. pension contributions and any food and lodging.

Working hours

The normal daily or weekly working hours.

Agreements and rules

Specify which collective agreements or agreements govern the working relationship.

Penalty for lack of information

If the employee receives an employment contract that doesn't contain the statutory information, or the employee doesn't receive an employment contract at all, this may result in a fine for the employer. In the case of a minor and excusable error in the employment contract, it may result in a fine as well. On the other hand, if the error is more significant to the employee, the fine can run up. In the case of serious cases, the fine can run up to X weeks salary.

Further information and conditions

In addition to the legal requirements, a contract of employment may also contain additional information, depending on the employment conditions of the individual employee. If employment conditions go beyond the statutory information, these must also be documented in writing and signed by both the employer and the employee, either as part of the employment contract or as a supplement to the existing employment contract.

Be aware of agreements

As an employer, you must be aware that the employee's employment contract must take into account the special conditions that may result from the agreement to which the employee may be subject. You must therefore always ensure that any special terms to which the employee is entitled under his agreement must be stated in the employment contract.

Changes to the terms of employment

It often happens that an employee's terms of employment change. It could be a pay rise, new job duties or the like. When an employee's terms of employment change, this must also be disclosed in writing. This will typically be done using a supplement to the employee's existing employment contract. The supplement to the employment contract thus describes the terms of the original employment contract that need to be changed, what the change includes and when the change will take effect.

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