After a long and
grueling recruitment process, reading through your employment contract might
not be the most exciting prospect.
If you’re just
starting out in the world of work, you may think it’s entirely unnecessary. If
you’ve never had much need to refer to a contract so far in your career, you
may think it’s just a waste of time.
But reading the fine
print of your employment contract is a must. (Even if you think you’ve already
reached an agreement with your employer on the key points.)
Understanding the
legal jargon contracts are written in will help bring clarity to your rights
and responsibilities – and any perks that come with the job.
Best case scenario,
your contract never need be consulted again. But chances are at some point you
will rely on it as the principle formal legal agreement between you and your
employer.
Here are the 10 most important things you need to check before putting pen to paper.
1) Job title
This may not seem like
something crucial, especially when first starting out, but it can prove to be.
Take care to ensure
your job title best reflects the work you’ll be doing. This is
important for representing yourself to external parties, your fellow
colleagues, and to future employers too (it might be on your CV for
the rest of your career).
Being given the wrong
job title can have further reaching consequences than might be suspected.
Negotiate this point if necessary, and be sure to know why you’re being given
the title you’re offered.
2) Job description
Not all contracts
contain a summary of the job description.
If your contract does
feature one, ensure it is not too limited nor too expansive. An
inaccurate job description might end up taking you down a path not agreed upon
at interview.
If your contract
doesn’t include a job description, make sure you are in no doubt as to the
expectations around your role before signing.
3) Remuneration (salary and bonuses)
The first thing to do
when checking this section is to make sure that the salary stated is
the one you negotiated. You should also know how and when you will be paid.
Your contract should
stipulate any additional incentives and perks such as paid bonuses, health
benefits, travel expenses, and other reimbursements. It might also include the
criteria where these will be given.
There are two types of
bonuses – guaranteed and discretionary. A discretionary bonus is one where
information about the bonus is not disclosed in advance.
4) Period of employment (start and end dates)
Both the start and end
dates need to be clearly stated, unless the contract is a permanent one.
Your contract may
stipulate a certain notice period you (and your employer) will have to give
upon declaring that it’s time for you to leave the job (which is likely to
change depending on how long you’ve been doing it).
If it doesn’t
stipulate this, then it should state that local legal regulations will cover
this issue. (You should always check the local employment law to ensure the
details of the contract are within its scope).
5) Termination (leaving the job)
You may not be
thinking about leaving yet, but that time will most likely come at some point.
Your contract should
prepare for an orderly parting of ways by clearly stating the conditions around
which the contract may be terminated by either party.
Read this section
carefully and ask the HR department for clarification if you don’t understand
the legal jargon. Before signing, make sure you know what the contract
dictates regarding either you or your employer deciding to terminate your
position before any given end date.
6) Working hours and place of work
Working hours should
be stated, and will be in the form of a daily time period or “office hours”
(say, 09:00-17:00), or a given number of hours per week you are expected to
spend working.
Where your work should typically take place will also
be stated.
Your contract may
detail any flexible working practices – such as the right to work from home –
that you are entitled to.
If your job is
likely to involve overtime or work outside of normal hours, the rules governing
this should be laid out, such
as the overtime rate or convertible hours you can use in a “time off in lieu”
system.
7) Holidays and sick leave
The points that should
be clearly stated about holidays are:
- How many days of vacation you are entitled
to
- When does the holiday year start
- When you are expected to take your ‘main
holiday’, or the bulk of your time off
- Whether you can carry any days over to the
next year (and how many)
While this is usually
regulated by local employment law, your company may offer additional holiday or
have some requirements regarding when your time off is used.
Sick leave may
impact other areas of your agreement, such as termination, working hours and
notice period. This is also
subject to local law, but the process of informing your employer about your
illness will often be stated in your contract too.
8) Pension
It is common for
companies to offer a pension to all their employees (though this may depend on
whether you are full-time and on a permanent deal).
Pension are
sometimes offered as standard as part of your contract, but they may also be
optional. Your contract should
be clear about this, and about whether your pension contributions are taken
directly from your salary (and how much this is). It should also clarify how
much your employer is liable to contribute, and what aspects of the pension contribution
are subject to tax.
9) Policies, restrictive clauses and rights (competition, confidentiality, and intellectual property)
Your company will most
likely have detailed certain policies around behaviour, rights and proper
conduct for you to consult and follow. Be sure to seek these policies
out and, if necessary, read them in advance of signing.
Restrictive clauses
often take effect after the termination of employment and are important for
employers because they protect the business, its clients, and other employees.
There are four types of these: non-competition, non-solicitation, non-dealing,
and non-poaching clauses.
Knowing these terms
and what they entail is important because they might restrict you when taking
jobs in future:
- Non-competition clauses may limit your ability to
work for a competitor of your former employer
- Non-solicitation clauses prevent you from poaching
clients and suppliers of your former employer
- Non-dealing clauses prevent former employees
from dealing with former customers and suppliers
- Non-poaching clauses prevent former employees
from poaching former colleagues
Your contract will
probably also address copyright issues, and may state who owns what you have
“created” during your time there – the intellectual property. Your contract
will ordinarily also put limits on what information can be shared by you with
others outside the company.
Be careful to follow
and take note of these rules once your contract takes effect.
10) Equipment
Depending on the
nature of your role, the company should commit to putting equipment at
your disposal to facilitate you in carrying out your tasks – such as a
computer, phone, or other devices and tools.
This commitment should
be stipulated in your contract. If it isn’t, seek assurances for what equipment
you are entitled to. Your responsibilties regarding this equipment should be
outlined in the agreement between you and your employer.