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What is a Work Contract?

Terms of employment are established in a work contract.
High-level executive payment contracts use the term "remuneration" rather than salary to indicate that a total compensation package can consist of more than just wages.
A work contract may go into detail the requirements of the position.
Breaking a work contract is often grounds for immediate termination.
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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 15 November 2014
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Many types of employment require what is known as a job contract or a work contract. Essentially, a work contract is a document that helps to establish the basic terms of agreement as they relate to the employment of an individual by a company. Job contracts generally contain at least some specific information regarding the responsibilities of the employee, and the types of benefits that are extending by the company in exchange for the services of the employee. Here are some examples of information that is normally found within the text of a work contract.

Just about every work contract will include the starting date for the term of employment, as well as the job title for the position that will be held by the employee. This basic information may include a general description of the responsibilities and tasks that are related to the job position, and at least some information regarding the status of the position as full time or part time.

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Another common component of work contracts is a clause that has to do with the use of proprietary information in the even that the working relationship is severed, either by resignation or by termination of the employment by the employer. This is often referred to as a non-compete clause. Basically, the no compete clause addresses the fact that any and all company documents that are in the possession of the employee are to be returned at the time of termination. This includes client lists and other forms of documentation that contain facts and data that is important to the function of the company. A non-compete clause may also contain a period of time in which the former employee agrees to not engage in direct competition with the company, either as an employee of a competitor or by opening his or her own business and attempting to entice customers away from the corporation.

Contracts for work also often include an outline of the benefits that the company extends to all employees in good standing. This may include holiday pay, vacation pay, sick leave and other forms of paid leave. The work contract may also specify conditions for inclusion in profit sharing plans, retirement plans, health insurance plans and other benefits that are offered by the company along with salary or wages.

Many work contracts also include a provision for a probationary period. This is not unusual and usually relates to the first ninety days of active employment. During this time, the company reserves the right to terminate the employment without prior notice. A probationary clause allows the company to quickly end an employer/employee relationship that is obviously not going to work.

The basic work contract is designed so that the employee has written documentation of what is expected in the way of performance and job responsibilities, and what types of remuneration will be received as a result of competent performance. At the same time, the work contract also provides the employer with proper recourse in the event that the duties and responsibilities are not performed up to established standards.

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Discuss this Article

anon72607
Post 2

I am currently employed in a contract position. if there is a layoff and it is not at the end of the contract, does the employer have to pay out the employee till the end of the contract date.

nfigueroa9
Post 1

I work for a company that has us in an Agreement. Although it contains everything that a contract does they do not call it a Contract. We are required to sign it also every 3 years. Can they be held to the same standards legally even though it is called an "Agreement"? Thanks!!

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