Look for these 5 Important Items before Signing your Employment Contract

employment contract

The thrill of being employed, it can send your mind spiraling with excitement and anticipation.  However, remember that signing your name on the employment contract indicates a binding legal relationship. It’s important that you know exactly what you’re signing up for.

Here are five important items job seekers should look for before signing your name on the dotted line:

  1. Your Direct Report/Immediate Supervisor/Manager

The name of your immediate supervisor or manager should be indicated clearly because you will be working with that person initially and he/she will also be directly responsible for monitoring your performance.  You can do some research about your manager in advance. The best way to do this is to look them up through social media.  Check if you have friends in common and see if you can learn something about your future boss from them.  This will give you the advantage you need to manage and exceed their expectations about the quality of work expected of you.

  1. Your Job Title and Expected Job Functions

Your employment contract should also include your job title as well as the responsibilities expected of you.  It is important that you review these responsibilities to ensure it’s the same as what was discussed with you during the interview.

The contract should also clearly stipulate your remuneration package, whether it’s an hourly wage, a monthly salary, or commission-based salary. Additional monetary (or non-monetary) incentives that have been discussed during the interview such as sales bonus, health benefits, and vehicle or travel expense reimbursements should also be in the contract.

  1. Job Scope and Limitation, Exclusivity, and Termination of Service

The employment contract should include information on whether you will be working part-time or full-time and if you’re starting out as a probationary or a contractual employee. If the contract includes an exclusivity clause (whether you’re allowed to take on additional work on the side), this should be explained in details clearly. 

Termination of Service

The employment contract should also include details on how your service can be terminated. 

  • Just Cause –Termination due to “just cause” means that you have failed to deliver your end of the bargain or when you’ve broken specific and relevant contract rules (theft, inappropriate behavior or joining company-prohibited activities).
  • Without Cause – Your employment contract may end, but not necessarily because of your own action.  This normally happens when the company is downsizing. 
  • Resignation – The employment contract ends because you have decided to leave the company. Make sure you read about the notice period (how long you’re expected to stay with the company after your resignation). Most companies would require at least a month for this turnover.
  1. Leave Benefits (if applicable) and Quitclaim

Depending on the type of employment you’re offered, part of your contract should include details on your leave benefits and quit claims. This part can be confusing so it’s best that you write down your questions and discuss it with the HR Manager for clarifications. 

  1. Special Clauses

In the event that your contract with the company ends for any reason, these are special clauses you should be aware of:

  • Non-compete Clause
    A non-compete clause prevents you from joining any industry similar to your previous company for a period of time, normally around 2-3 years. 
  • Non-Solicitation Clause
    Most companies that require you to manage accounts of important clients may include non-solicitation clause within your employment contract.  This means that when you leave the company, you are legally obliged not to talk to your former company’s clients/customers or even employees. 

    Understanding what’s on your employment contract will help you make an informed decision and allow you to carefully weigh your options.  Don’t be afraid to ask about items you don’t really understand as it’s always best to make sure you are clear about what you’re entering into before signing the employment contract.



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