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What is a Contract of Employment and Why is it Important

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The definition on Employment Contract: The employment contract is the agreement whereby one party, the employee, undertakes to work for a certain period of time in the service of the other party, the employer.

Five elements are mentioned in this definition.

  • The employee must perform work.
  • You must pay wages for this.
  • The work must be done for a certain time.
  • There must be a relationship of authority.
  • The employee must perform the work himself.

What is the importance of an employment contract?

Only if you have an employment contract are you fully protected by employment law. Furthermore, an employment contract is often a condition for being able to use all kinds of (employee) insurance policies. You can only speak of a real employment contract if, based on that contract, you're obliged to work for a certain period of time (in the service of an employer and for wages). Your employer is the boss in that relationship: he can exercise authority over you. If there is such a real employment contract, then the legal provisions of labor law apply to protect you. Only then is there a right to a minimum number of vacation days, your wages are paid on in the event of illness, and so on.

Requirements employment contract

The law states what is required to make an agreement into an employment contract. There must be at least three elements:

  • - one party (employee) must have agreed with the other party (employer) to perform work for a certain period of time;
  • - your employer has committed to pay wages in return for the work performed;
  • - the work is performed by you personally in the service of your employer.

That's an important criterion: there is a relationship of authority between employer and employee, the employer is the boss and in principle has control over the employment contract and can therefore give directions.

If these elements (authority relationship, personal work and wages) don't all occur in an employment relationship, then there is no question of an employment contract. In the case of homework contracts, this is often the reason that there is no employment contract. Even if you're free to decide whether or not to work or when you do your work, there is no employment contract.



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