When signing an employment contract, many employees focus on salary and job title while ignoring other crucial clauses that could significantly impact their careers.
Here are some key sections in employment contracts that many people overlook but are essential to understand.
1. Job description and scope of work
While your job title may seem straightforward, the scope of work outlined in your contract defines your responsibilities.
A vague or overly broad job description could lead to extra duties beyond what you expected.
Always ensure that your contract clearly defines your role to avoid exploitation or misunderstandings.
2. Probation period terms
Many employees overlook the probation clause, assuming it is just a formality.
However, probation terms determine how easily your employer can terminate your contract within a specified period.
Some contracts allow employers to end employment without notice or compensation during probation.
Be aware of how long the probation lasts and what conditions apply.
3. Non-compete and restrictive clauses
Some contracts contain non-compete and restrictive clauses that prevent you from working for a competitor or starting a similar business for a certain period after leaving the company.
Failing to understand this could limit your job opportunities or entrepreneurial ambitions in the future. Ensure you negotiate any unreasonable restrictions before signing.
4. Notice period for termination
Your notice period determines how long you must work after resigning or how much notice your employer must give before termination.
A long notice period may restrict your ability to move to a new job quickly, while a short one may leave you vulnerable to sudden job loss.
Always check this clause and negotiate if necessary.
5. Disciplinary and grievance procedures
Many employees ignore this section, yet it dictates how workplace disputes are handled.
Understand the procedures for raising complaints, appealing disciplinary actions, and the consequences of breaches. This knowledge can protect you in case of conflicts with your employer.
6. Bonuses and benefits clauses
Some contracts mention bonuses and benefits vaguely, making them discretionary rather than guaranteed.
Ensure any promises of bonuses, commissions, allowances, or other benefits are clearly outlined, including how they are calculated and when they are paid.
7. Intellectual property rights
If your job involves creating content, inventions, or software, check who retains ownership of intellectual property (IP).
Some contracts state that anything created during employment belongs to the company, even if developed outside work hours. If this affects you, negotiate clearer terms regarding IP ownership.
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8. Working hours and overtime policies
Some contracts have clauses that require employees to work beyond standard hours without extra pay.
Understanding your working hours, overtime policies, and compensation for additional work ensures you are fairly compensated for extra effort.
9. Severance pay and redundancy terms
In case of job loss, severance pay and redundancy terms determine what compensation you will receive.
Many employees ignore these clauses, assuming they won’t be relevant, only to face financial difficulties if laid off. Ensure your contract specifies severance benefits in case of termination.
10. Amendment and renewal clauses
Some contracts allow employers to change terms without your consent.
Always check for clauses stating how amendments can be made and whether you have the right to renegotiate or refuse changes that negatively impact you.