Employment contracts (or employment agreements) are essential documents as they ensure that both you the employer and your employees have a clear understanding of what is expected from both parties during employment.
In particular for the employer, employment contracts are important as they provide the security of knowing that a new employee is 100% aware of their obligations and terms of employment, which can ease the risk of taking on a new employee. Employment contracts also may provide you with the added security of protecting your clientele and intellectual property from employees who leave your business or your competitors.
In addition to this, employment contracts outline job specific requirements for your new employee, intellectual property, the location of work, confidentiality for employers, leave entitlements, pay rates and other employment. Good contracts are not limited to these items and in the case of a Newbi employment contract, include much more.
Many small business owners are playing with fire by failing to implement a contract. Often, it’s due to the belief that the correct documentation is too time consuming to implement, it’s not needed for a small business or it’s too expensive. This is actually far from the truth. Think about it: what might happen if a disagreement between both parties occurs and you don’t have an employment contract in place? How would you prove what was agreed between both parties at the commencement of employment and the conditions of employment without a written agreement? This is one very good reason why it is important to have employment contracts in place for all of your employees, regardless of their employment status or your business’ size.
Without a well-drafted contract in place, rights and obligations of both parties can be misunderstood which can potentially put your business at risk of false claims by employees in regard to pay and entitlements, and conditions of employment. That is why implementing employment contracts for all staff is a smart decision for any business.
Employment contracts are an investment in your business and a risk mitigating activity, much like your building insurance or public liability policy. Business owners should always consider the outlay to implement proper employment documentation as low cost, in comparison to the potential cost of legal fees and potential fines as a result of an employment related dispute which you cannot defend.