Different Types Of Employment Contracts

There are four main different types of employment contracts that employers need to consider when hiring new employees. An employment contract is essentially a contract that consists of all the duties, responsibilities and right that make up a legal relationship between the employee and employer. It’s important for all employees to know the following main four types of contracts as all are essential for legalities and minimising disputes. Moreover, contracts also provide guidelines and outline clear expectations so that all parties can move forward with the best interest of the business at heart.

The main three different types of employment contract include –

• Employment Contracts
• Deduction Agreements
• Employee Handbooks

Employment Contract

Essentially, an employment contract is a legally binding agreement that is agreed and signed between the two parties – the employer and employee. Within an employment contract, the employer must provide a summary of main terms for the employee to adhere to which should include main working hours, salary and terms about any company equipment or apparatus that may be given to the employee so that they can fulfil their role to full potential whilst working for the company.

Within an employment contract, it should also state the general responsibilities, tasks and duties that that the employer expects the employee to undertake as part of their paid role. Confidentiality may also be mentioned amongst many industries as employers will be sharing client passwords and key information that should not leave the workplace. Furthermore, an employment contract may also include;-

• Communications.
• Perks.
• Future competition.
• And much more.

Deduction Agreements

Another type of legally binding contract that an employer may consider is deduction agreements. Deduction agreements have to be legally binding and agreed upfront with a new employer. Without this contract in place, employers can face prosecution and heavy fines for mistreatment and exploitation of employees. Employers can, however, make a deduction from employee’s pay if the contract specifically allows the deduction and was agreed in writing beforehand. Deduction agreements may also be in place and in writing if an employee has lost or broken company apparatus or equipment.

Employee Handbooks

An employee handbook is classified as an extension of the employment contract that goes into further detail regarding the company values, expectations, key responsibilities, main policies and more. Here at NORI HR, we always advise that every company has their own employee handbook to clearly outline company culture from the very start of proceedings with all new employees. Essentially, a handbook is a condensed introduction to your company that can be used within the induction process. Although employee handbooks are not legally binding or required, over 80% of SME’s have them and they can have a positive impact on your bottom line. One of the main benefits of employee handbooks is that it educates employees about what they can expect from your management and leadership. Other benefits may include;-

• Helps defend against employee claims.
• Showcases your main benefits.
• Communicates effectively with employees.
• Introduces employees to culture.

To find out more about bespoke documents and how NORi HR can help, contact NORI HR & Employment Law on 01254 947829 or use our online contact form and we’ll get back to you as soon as possible