A job contract is an official and professional document. It is mandatory for the employer to give a written particular of employment in form of contract to every employee. It is used for employee reference. The contract gives all the details about the job position offered. The contract consists of points like designation, job description, leave policies, probation period, rules for terminating the contract from both parties etc. All these particulars are printed on the letter head of the company and signed by the higher authority. Many times this contract is attached with the appointment letter. Employee can always go back to this contract if he or she has any doubts.
Clarity and authenticity are two points on which the contract has to be written. If there is any change in the contract, the management has to send a written notification in that respect to the employee promptly. The job contract can be used as a legal document if the company goes against the policies. An employee always goes through the contract i.e. the terms and conditions before accepting the offer. A contract is a medium through which the employer can assure transparency to the employees. A good contract of employment always creates a good image about the organization in the employee's mind.
Let's check the common components that are found in a contract:
- Contract Details : This is the beginning of the contract. It usually contains the full name of employer and employee and address. The designation of the employee as well as the place of work is mentioned in the introductory part. A brief description of the job profile is specified with the date of joining.
- Nature of Contract : This section mentions whether the contract is permanent or temporary. If the contract is temporary, then the date of termination has to be given. If the employee is permanent and he or she wants to terminate the contract then the duration of notice period that has to be given.
- Pay and Benefits : In this part details about the salary or compensation package is mentioned. If the overtime is paid, then the rate for an hour is specified. The payment method and the day by which salary is credited are given. Performance based incentives or other perks have to be mentioned. Health insurance cover, pension plans all these things have to be highlighted here.
- Leave Policy : The leave structure followed in the organization is specified here. Medical leave, casual leave and all other leaves that the employee is entitled to for a year is mentioned here. Leave encashment policies are also described in this section.
- Work Schedule : Number of working hours to be put in a week is given. Is there flexible working schedule in the company? Duration of overtime and compensatory offs, timings of lunch breaks and other breaks are the things mentioned in this section. Attendance policy is specified.
- Probation Period : The duration of probation period is mentioned. The benefits that will be added to the contract after successful completion of period of probation.
- Performance Evaluation : The schedule of appraisals and performance reviews that is practiced in the company. The criteria that are used to check the performance is specified.
- Disciplinary Procedure : This are gives details about the disciplinary procedure followed. The circumstances in which the employee's contract can be terminated.
- Acceptance Clause : The employee signs under the heading "I accept all the above mentioned terms and conditions" in the last section of contract.