What Are The Key Clauses In An Employment Contract?

An employment contract contains many key clauses covering pay, work hours, holiday entitlement, pension, confidentiality, etc. Therefore, you need to be aware of all these terms and ask for clarification if anything needs to be covered.

In this Aniday's guide, you will understand all the key clauses in an employment contract and what you need to know.

What Is An Employment Contract?

An employment contract is a legal document between an employee and their employer that includes all the agreed-upon terms and conditions.

An employment contract's key provisions or clauses can be divided into three main categories. They are listed below:

• A descriptive clause: It explains the different components of the relationship between employer and employee.
• A protective clause: It explains the employer's interest as they consider hiring, training, and retaining the new employee.
• Incentive clauses: These clauses indicate the incentives the employee can have through this employment opportunity.

An employment contract doesn’t always have to be in writing, it can be verbal and may also include implied terms. Regardless of the format, certain key aspects must be agreed upon, such as:

• The number of hours an employee will work
• The payment structure and amount
• Any additional conditions related to the role

Implied terms, while not explicitly stated in the agreement, are just as important. These terms often reflect what the employer expects from the employee regarding conduct and performance, ensuring clarity in the working relationship.

What Should Be Included In Your Employment Contract?

The employee contract or entitlement should be agreed upon and issued on the first day of employment. This covers specific terms and conditions concerning your job, which are related to the below key scope:

• Scope of employment.
• Start date of your employment.
• The number of hours you will work or working hours.
• The amount the employee will be paid.
• Details about holiday entitlement.
• Information on the notice periods before you leave.
• Details about pension, EPF (Employees' Provident Fund), and ETF (Employee’s Trust Fund).
• Confidentiality clauses.
• Termination clauses.
• Restrictive covenants clauses.
• Enforcement of terms.

What Are The Key Clauses In Employment Agreement?

Scope Of Employment 

The scope of employment outlines the essential duties and responsibilities that you need to fulfill as an employee. It also includes if there are any travel requirements, how often you should travel, and if there is a need to relocate.

Hours Of Work

Your employment contract should clearly outline your working hours and other important details. The contract must include key clauses related to working time, such as:

• Include your working hours or working patterns.

• Include overtime details.

• The terms and conditions should adhere to the Working Time Regulations. Here are some common key points you need to consider under the Working Time Regulations (may differ based on your employment contract): 

  • Your working hours should be 48 hours, with an average of over 17 weeks.

  • Meet the right to a minimum daily rest period between each working day or shift (11 hours in 24 hours).

  • Meet the minimum weekly rest period (24 hours of uninterrupted time off work every week).

  • Be entitled to receive an unpaid rest of 20 minutes after working 6 hours or more.

Pay

Your pay details should be included in your employment contract. Generally, all pay-related terms and conditions are included transparently. Here are some key points you need to consider:

• Includes your salary details.
• Includes the date you will be paid if there's a specific date, the end of the month or the beginning of the following month.
• It consists of any information on pay deductions, such as when you owe money to your employer or pay deductions for excessive holidays.
• Includes any special bonus you may receive under specific criteria, or your employer may give it to you based on flexibility in terms and conditions.

Pension

The employment contract should also outline the rules and regulations associated with your pension. They may include the key points:

• Since all employers must comply with auto-enrolment for pensions, your contract also should outline its terms and conditions.
• Your contract should mention details about your pension scheme.
• Include the related pension and contribution rates.
• If additional documents are referenced, your contract should mention them.
• Ensure that the referenced papers are accessible, and please review them.

Confidentiality

Since the law provides fewer clauses on confidentiality-related terms and conditions, your employment contract will brief you about it. Typically, the contract may include clauses outlining your responsibilities to protect the company’s confidential information throughout your employment.

Holiday Entitlement

When you work for an employer, you have specific terms and conditions related to paid holiday. These may differ depending on where you work and the associated rules. They also may include the below critical points on holiday entitlement in your employment contract:

• The contract may outline the start and end dates of the holiday year in your contract.
• Outline if there are any restricted holidays, such as Christmas (applicable for hospitality workers).
• Confirm if public holidays are considered a part of your annual leave entitlement.
• Clarify if bank holidays are paid or treated as additional leave.

Termination

Termination clauses are the terms and conditions of the employment contract, including when it ends and why it may be terminated. 

Restrictive Covenants

The employment contract will also consist of restrictive covenant-related clauses. These clauses help the employer protect their business when leaving the company. Therefore, under restrictive covenants, the terms on what activities you are restricted to do are included here. However, here are the key types of restrictive clauses you may find:

• Non-compete clauses: Clauses that prevent you from joining competitors or beginning a competing business after leaving.
• Non-solicitation clauses: Clauses that restrict you from contacting former employer's clients and cause change in their dealings.
• Non-dealing clauses: Clauses prohibiting you from doing business with former employer clients.
• Non-poaching clauses: Clauses that stop you from hiring or poaching staff from your previous workplace.

Enforcement Of Terms

Enforcement terms include how to deal with an employee who doesn't follow the terms and conditions mentioned in the contract. They would cover different situations and how to handle them, including legal procedures.

Final Thoughts

In conclusion, the employment contract covers many vital clauses. You should be aware of how each clause is addressed, ensuring complete transparency. Therefore, it protects you from any disparity during employment.

We hope this guide helped you understand the critical clauses in employment contracts.