Home / Tips for Making an Employment Contract

Tips for Making an Employment Contract

It's remarkable how often lawyers find weaknesses in the employment contracts drawn up by employers themselves. Drawing up an employment contract seems easier than you think. It pays to think more consciously about the provisions that matter in the event of a labor dispute. With the tips below you can make optimal use of the legal flexibility options. And you protect yourself with these recommendations for the most common contractual pitfalls.

That which you have laid down in the employment contract with your employees forms the basis for your legal position. These agreements also determine the strength of your starting position if negotiations are needed, for example in the event of a labor dispute or if agreements need to be adjusted. If legal certainty is dear to you, recording agreements in an employment contract is therefore not something you have to settle as quickly as formality. Think carefully about including the practical tips below in your employment contracts.

Tip 1: Choose consciously for an employment contract or not

The first question when entering into an employment relationship is whether it's actually the intention to enter into an employment relationship with each other. Situations are conceivable that neither employer nor employee have that intention. Consider freelance assignments, for example in journalism and photography, but also learn / work or internship agreements. Even though parties in such a situation don't want to enter into an employment contract with each other, judges can still regard the working relationship as an employment contract, as a result of which you'll still be bound by the legal protection against dismissal, the minimum wage and perhaps all kinds of collective labor agreement obligations. If you don't want an employment contract, we refer you to our article Tips for a good self-employed contract .

Tip 2: Clearly state the intention of the parties

During the last years the Supreme Court consistently follows the reasoning that's important "what they had in mind when concluding the agreement, also taking into account the way in which they actually implemented the agreement and thus gave substance to it. ... Not a single characteristic is decisive in that regard, but the various legal effects of the relationship between the parties must be considered in their mutual connection. " In other words, what the parties explicitly intended in drafting the agreement is of major importance, specially if other factors point in the same direction, including the manner and nature of rewarding.

Tip 3: Opt for optimum flexibility

When drawing up an employment contract, I assume that as an employer you want to build in as much flexibility as possible in the initial period. You can achieve this flexibility by thinking carefully about entering into on-call contracts, fixed-term employment contracts, determining the possibility of premature termination, determining a probationary period, arranging notice periods and the possibility of unilaterally changing the employment conditions in the event of a serious interest. to change. You should also consider whether incidental overtime is included in the monthly remuneration or will be reimbursed separately. The competition and relationship clause are often the barriers that are surrounded by pitfalls.

Tip 4: You can easily create a good calling contract!

The biggest pitfall with an on-call contract is that you fail to include the "deferred performance obligation" clause. If you don't stipulate in advance that the on-call worker is obliged to appear with every call, the court will judge each individual call as a newly concluded fixed-term employment contract, even if the duration of the assignment is several hours. With the fourth call you'll therefore be unintentionally bound to an employment contract for an indefinite period.

Another pitfall with an on-call contract is that the employee can, after a while, claim a minimum number of hours of work. The average number of hours of work performed during the previous three months is then considered. A call contract then quickly becomes an employment contract for an indefinite period, the termination of which isn't possible without a struggle. If all this isn't the intention, you build a safety net for yourself by also making explicit agreements about the duration of the call contract and any probationary period.

Tip 5: Make optimum use of the fixed-term employment contract

At first glance, a fixed-term employment contract appears to be the ideal solution for implementing an employment relationship whose extension isn't (yet) certain. For example, to first look at the cat from the tree. An employment contract can be concluded for a well-defined limited duration, such as a number of months. However, it can also be closed for the duration of a project or the duration of the absence of the employee being replaced. The condition is always that the expiration thereof can't be influenced in the interim by the parties themselves.

Please note that the probationary period clause must be entered into in writing on pain of nullity and may never be longer than a month for an employment contract of less than two years. Another pitfall is the tacit renewal after it has expired, so that the same employment conditions continue to apply and cancellation can become more difficult. A fixed-term employment contract is in any case legally converted into an employment contract for an indefinite period if an extension takes place after the expiry of a period of 24 months or as soon as the employment contract has been tacitly renewed for the fourth time during that period. Finally, it's often forgotten that a fixed-term employment contract can't be terminated prematurely if this hasn't been explicitly agreed in advance.

Tip 6: Extra points of attention for the employment contract for an indefinite period

As an employer, it's recommended that the nature of the work to be performed be broadly described, particularly in the case of a long-term employment contract. In the event of a reorganization, it's then easier to change the position of the employee. On the other hand, the employee has an interest in describing the work to be performed as detailed and accurate as possible. He will then have to settle less quickly for an alternative position.

Did you know that employer and employee can already make agreements in advance about the financial consequences in the event of the termination of the employment contract? This can be an ideal binder in particular for higher management positions and for the recruitment of scarce workforce. In this way, a possible dismissal procedure for the employer doesn't become an unpredictable financial fair. And as an employee, you also know better where you stand at the end of your employment.

Tip 7: Think about the apprenticeship agreement / internship agreement

From a legal point of view, it's important that you actually let the trainee carry out work with an emphasis on the learning objectives described in advance. If, on the other hand, productivity is emphasized when carrying out his work, the existence of a learning contract will not be readily accepted, but an employment contract will nevertheless be adopted. In addition, it's important that you offer the trainee serious guidance.

In addition, it's important that the remuneration that you grant the trainee is explicitly not intended as a salary, but as a cover for expenses and a small amount, based on reasonable remuneration, for services to be provided. Finally, it's important that the trainee, together with you, explicitly endorses the intention of the employment contract, namely learning under supervision. For the sake of certainty you can assign a predetermined duration to the contract to be concluded after which it will be automatically terminated.

Tip 8: Implement a work regulation / personnel handbook

The employment regulations are pre-eminently the place to lay down innocent house rules at first sight. Consider the way in which leave days are determined. The legal starting point is that you as an employer are bound by the employee's proposal to take up the hospital if you fail to respond in time in the event of a mistake. You can deviate from this system in the work regulations by making prior permission mandatory. Also consider the car scheme if you have made a company car available to your employee as part of the wage. The absence of such an arrangement and the continuation of the costs of this are particularly evident if your employee is absent for a longer period of time, for example in the event of illness or an employment dispute.

Tip 9: Avoid these most common mistakes in employment contracts

Many companies make essential mistakes when entering into employment contracts with their employees, both due to poorly chosen type of employment relationships and insufficient use of organizational flexibility in terms of employment conditions. As a result of these errors, employers are unnecessarily disadvantageous because unavoidable future reorganisations will be more difficult and labor disputes will have to be bought or settled. Think of:

  • careless job descriptions
  • invalid cancellation clauses
  • invalid probation clauses
  • invalid penalty clauses
  • risky competition clauses
  • the absence of unilateral change clauses
  • inaccurate sickness absence and leave arrangements
  • incorrect application of collective agreements
  • wrong sector classifications
  • deferred pension liabilities
  • fiscal inaccuracies
  • wrong self-employed constructions
  • errors and omissions when entering on-call contracts
  • misguided applications of fixed-term contracts
  • gaps in insurance coverage
  • insufficient response to risks under international law

Such latent risks, in turn, have a negative impact on negotiations on intended sale of the company and therefore have a negative impact on their value.

Checklist with clauses

When drawing up an employment contract, our specialized employment lawyers recommend the following checklist for the clauses to be included:

  • party indications
  • job description
  • performance requirements
  • secondment options
  • resolutive conditions
  • recording of information about the employment history
  • probation
  • basic salary
  • overtime allowance
  • pension plan
  • bonus scheme
  • leave arrangement
  • study costs scheme
  • sick leave scheme
  • non-competition clause
  • relationship clause
  • anti-recruitment clause
  • confidentiality clause
  • penalty clause
  • use company property
  • use social media
  • copyright and other intellectual property
  • exit arrangement
  • cancellation period
  • termination benefits
  • settlement of transition costs on the transition payment
  • unilateral change clauses
  • applicability of staff regulations
  • applicable (international) law

What is a good employment contract?

Most employers and employees casually put away the employment contract in a drawer after signing and appear to have forgotten that they have signed one for approval when problems arise. Suspected often the contracting parties involved don't know exactly what obligations they have entered into with each other. If the contract is then brought out, those involved sometimes place defects, such as nullities and carelessness, for new problems. Instead of the legal certainty that an employment contract ought to offer, it will then become imperfect in an unnecessary source of uncertainties that are often fought out in court. That's unnecessary if you properly handle the above instructions.

Employment contracts that are equipped with all possible trimmings and that also comply with the law are a gift for all involved, namely employer, employee, lawyers and judges. Not only does it create clarity for the contracting parties. You'll also be better prepared if it comes to an employment conflict. You thereby considerably increase the chance that you'll emerge from it with as few flaws as possible. In other words, a well-considered package of previously agreed employment conditions will pay for itself.

Limiting risks with good employment contracts

Do you want to know more about how you can limit risks in labor law with employment contracts? Then view our fact sheet: Limiting risks in labor law .

Have your employment contracts scanned

So let related legal lawyers review your employment contracts. An important reason for an employment law legal scan is also that substantial changes have taken place in the field of employment law. By means of a legal scan you as a company know where you're legally. More information about our employment law legal scan can be found in our article Assessing Employment Contracts . You can also immediately request, without obligation, through our legal webshop the frequently requested Legal Scan Employment Law developed by us . Or give us a call for a customized offer.

Have your employment contracts drawn up and assessed

Don't get started yourself when drawing up a good employment contract. Ask related legal's specialized employment law lawyers to prepare an employment contract tailored to your company. We use fixed and competitive prices for frequently requested legal products. We would like to bring you the following products about drafting and reviewing contracts :

Have an employment contract checked

  • Drawing up an employment contract for an indefinite period
  • Drawing up a fixed-term employment contract
  • Drawing up a model contract for the self-employed
  • Legal Scan Employment Law

See also:
Share on Facebook Share on Twitter Share on LinkedIn
Back to top

Home | About Us | Contact | Privacy Policy | Terms of Use

Copyright 2011 - 2020 - All Rights Reserved