The Importance of an Employment Contract

For both employees and employers, the needs and legalities vary enormously from country to country. Here is a hairdresser’s overview of considerations and definitions. Remember always to seek professional local advice.

What is an Employment Contract?
An employment contract is a legally binding agreement between two parties, the employer and the employee, and is designed to give both parties security and protection.

Why Have an Employment Contract?
For the employee a contract gives them the security that they are working for a professional business that has clearly defined its obligations and agreement on all terms of employment.

For the employer they have the security that the employee is fully aware of their obligations and has agreed to comply with the stated terms. For the employer the contract may also endeavour to protect the business clientele and intellectual property such as:

  • A radius restriction whereby the contract attempts to impose a geographical radius in which the employee cannot work for a predetermined time period. If either the radius restriction is too large in area or time period excessive, this will be deemed too restrictive
  • Theft or misuse of intellectual information whereby the employment contract is protecting the client details specifically service records and personal contact details
  • Poaching of clients whereby the clients are deemed the clients of the business and not the stylist
  • Poaching or soliciting of other staff members
  • Restrictions on advertising for a timeframe whereby one is prohibited from advertising where they are working. This prohibits them from attempting to solicit clients and staff from a place of employment for a specific period of time

Stay Out of the Court
Employment contracts vary enormously from country to country with their enforceability often under scrutiny. The employment law in many countries always favours the employee and any attempt by the employer to unduly restrict someone’s right to work will be deemed unfair and dismissed in a legal courtroom challenge.

Put it in Writing
As a matter of principle a contract of employment should always be in writing. Oral agreements are usually invalid and are difficult to prove in cases of doubt or if contested. Written contracts create clarity and evidence for both parties.

Provide Details of Collective Agreements
Contracts of employment do not take account of every detail. Often reference is made to terms and conditions in collective agreements, in-company rules or the law. In such a case the new employee should be given a copy of the collective agreement. Collective agreements and shop agreements may cover, among others, voluntary welfare payments, remunerations pursuant to the tariff, work hours, reimbursement of travel expenses and compensation for transfer to a new location.

Talk About it Together
Usually the contract of employment will be explained to the new employee. This gives him/her the chance for requests and to ask for amendments. Generally the employer expects the signing of the contract after a short period of consideration just to give the new employee the opportunity to examine the contract or to have it examined. Upon your signature you enter into a binding contract with your employee.

Whether you are an employee or employer there are numerous legal obligations that you need to live up to. Depending on the country you live and work in there can be many laws governing the employee employer relationship, having legally binding employment contracts avoids misunderstanding and gives both parties absolute clarity about both your rights and responsibilities. Don't let the formality of contracts be a headache, seek professional advice and value the peace of mind when everything is in place.