Reading your employment contract might be the last thing on your mind after that long-awaited phone call or email. But, sad as it is you need to stop your victory dance and keep your cool because there is one step left for you to do before sealing the deal.
Reading through the contract is an essential step. You should have a clear picture of what you’re getting into. Here are seven things you should look into before you jot down your signature. The information presented below can vary depending on the country of your residence.
1. Job title and description
Knowing the scope of your employment is important because it describes the role and duties the employer can ask you to do. This is reflected in the job title and description. These should be specific and should match the job description for which you applied. If it is not precise enough, you might find yourself doing things you can’t or don’t want to do. It can also mean that you will end up dealing with a heavier workload than anticipated.
2. Bonuses and salary
The first thing to do when checking this section is to make sure that the salary included is the one you negotiated. You should know how and when you will be paid. This section can include additional incentives like bonuses, health benefits, and travel expense reimbursements. It should be clearly stipulated how and in which cases you can receive these. You need to see the exact criteria based on which you receive a bonus.
There are two types of bonuses, guaranteed and discretionary. A discretionary bonus is one where information about the bonus is not disclosed in advance.
3. Cause of termination
The reasons the employer can give if they want to terminate the contract are reflected in terms of termination. Read this section carefully and ask the HR department for clarification if you don’t understand the legal jargon. The terms of termination need to be clear. Otherwise, you might end up agreeing to your termination at any time, without notice and worse, without any reason. This is termed ‘without cause’.
If the termination is because of ‘just cause’ it either means that you’ve broken some rules or that you have not delivered what you’ve promised. The cause of termination can also be your resignation. Here, make sure you read about the notice period.
You should also be careful if you find the term ‘sole discretion’ written in this section, in case, of the contract’s termination prior its end date. This term can mean that your employer can decide to fire you without talking to you first . This eliminates any possibility for discussion, notification or compromise. A friendlier alternative gives both the employee and the employer say in the matter.
4. Start/end date and notice period
The start and end date needs to be clearly stated. Having a stipulated notice period is important because it gives both parties some time to prepare their next step. This period might be anywhere between one week and three months, and in many cases depends on the length of your employment.
5. Holidays and sick leave
Both of these vary depending on the country you are working in, and there is strict legislation that stipulates the duration of your holiday and the terms for 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
- Whether you can take holidays at certain busy times of the year, like Christmas
- Whether you can carry any days over to the next year
In many countries paid sick leave is a statutory requirement, meaning that there are laws written about it. Most of Europe has legal requirements for sick leave. In the US, the state does not require employees to have paid sick days, but the government guarantees unpaid sick leave in case of serious illness. Make sure you know the law before you look at this section of the contract.
6. Working hours
Check whether you need to work the weekends or in the evenings and if so how will you be paid for this. In some cases instead of being paid for overtime, these hours can be converted into days off or holidays commonly called “time-in-lieu”. You need to be clear on company policy and be prepared to negotiate. A good work-life balance is a health requirement in the long run and boundaries need to be set. But again, the working culture is different for every country and company, so be sure to know in advance what you’re getting into.
7. Restrictive clauses
These 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 of these, the non-competition, non-solicitation, non-dealing, and non-poaching clauses. Knowing these terms and what they entail are important because they might restrict you taking future jobs.
- Non-competition clauses may limit you 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