Starting a new job is exciting, but before you sign on the dotted line, you need to thoroughly review your employment contract. Many people skim through the document without fully understanding its implications, which can lead to misunderstandings, legal disputes, or unfavourable working conditions.
This article explores, the key elements of an employment contract, what to watch out for, and how to protect your rights before committing to a new job.
- Understanding the Basics of an Employment Contract
An employment contract is a legally binding agreement between an employer and an employee that outlines the terms and conditions of employment. This document governs your rights, responsibilities, and workplace expectations.
It’s crucial to read your contract carefully and clarify any vague or unfamiliar terms before signing. Here’s what you should pay special attention to:
- Job Title and Description: Are the Expectations Clear?
Your job title and description define your role, responsibilities, and expectations within the company. However, some contracts use vague or overly broad descriptions that can later be used to increase workload or change duties without additional pay.
What to check:
✅ Ensure the job title aligns with what was discussed during the hiring process.
✅ The job description should be specific and clear, not open-ended.
✅ Watch out for phrases like “and other duties as assigned”, which can lead to unexpected tasks.
If anything seems unclear, ask for clarification before signing.
- Salary, Bonuses, and Benefits: Get It in Writing
Your compensation package is one of the most important parts of the contract. Make sure everything you agreed on during negotiations is accurately reflected.
What to check:
✅ Base salary: Is it the same as what was offered in your interview?
✅ Bonuses & commissions: Are they guaranteed, or based on performance?
✅ Payment schedule: Will you be paid weekly, bi-weekly, or monthly?
✅ Overtime pay: If applicable, does the contract outline how extra hours are compensated?
Additionally, confirm details about health insurance, retirement plans, stock options, and other perks. If the employer verbally promised something, but it’s not in the contract, it doesn’t count legally.
- Work Hours and Overtime: Are There Hidden Expectations?
Some contracts specify work hours (e.g., Monday to Friday, 9 AM – 5 PM), while others are vague, stating that employees must work “as required by business needs.” This can lead to longer hours without extra pay.
What to check:
✅ Is there a clear schedule or flexibility in work hours?
✅ Are you expected to work overtime? If so, is it paid or unpaid?
✅ For remote roles, are there clear expectations about availability and response times?
If the contract mentions “unpaid overtime” or expects you to be available outside normal working hours, consider negotiating or asking for clarification.
- Probation Period: Are There Risks?
Many companies include a probationary period (typically 3 to 6 months) to assess new hires before confirming permanent employment. During this period, you might have fewer rights or lower benefits.
What to check:
✅ Length of the probation period (it shouldn’t be unreasonably long).
✅ Are you entitled to full salary and benefits during probation?
✅ What happens if you don’t pass probation—will you get a notice or severance?
If probation terms seem unfair or too risky, negotiate before signing.
- Termination Clause: What Happens If You or the Company Part Ways?
This is one of the most overlooked yet critical sections of any employment contract. It outlines how either party can end the employment relationship, and under what conditions.
What to check:
✅ Notice period: How much notice do you or your employer need to give before termination?
✅ Can the employer fire you without notice (e.g., in case of misconduct or layoffs)?
✅ Are you entitled to severance pay if you’re let go?
✅ Does the contract have a non-compete clause preventing you from working with competitors?
Unfair termination clauses can leave you jobless without compensation, so read this section carefully.
- Non-Compete and Confidentiality Clauses: Will It Limit Future Opportunities?
Many companies include non-compete and confidentiality agreements to protect their business, but these clauses can limit your future career options.
What to check:
✅ Non-compete agreement: Does it prevent you from working for competitors after leaving? If so, for how long?
✅ Confidentiality clause: Does it unreasonably restrict you from using your experience in future jobs?
✅ Are there geographical restrictions (e.g., you can’t work in the same city as a competitor)?
If these clauses are too restrictive, try negotiating a shorter time frame or narrower scope.
- Remote Work and Hybrid Policies: Are the Terms Clear?
With the rise of remote work, some contracts include clauses about work-from-home policies. Make sure the expectations are clear if you’re working remotely.
What to check:
✅ Does the contract allow full remote work or hybrid arrangements?
✅ Are there specific working hours or flexibility?
✅ Will the company cover home office expenses like internet, electricity, or equipment?
If remote work is essential for you, make sure it’s formally stated in the contract.
- Intellectual Property (IP) Rights: Who Owns Your Work?
If your job involves creating content, software, designs, or innovations, check who owns the intellectual property.
What to check:
✅ Does the contract state that all work you create belongs to the company?
✅ Are there exceptions if you work on personal projects outside office hours?
✅ If you’re in tech, does the contract claim rights to side projects or innovations?
If you plan to work on personal projects or startups, make sure they aren’t automatically owned by your employer.
- Dispute Resolution: How Are Workplace Issues Handled?
If you ever have conflicts with your employer, your contract may dictate how disputes are resolved.
What to check:
✅ Does the contract require mandatory arbitration instead of legal action?
✅ Are there clear procedures for raising grievances?
✅ Do you have the right to legal representation in disputes?
Contracts that heavily favour the employer in dispute resolution can make it difficult to seek justice if issues arise.
Final Thoughts: Read, Ask, Negotiate!
An employment contract is a legally binding document, so never sign it without reading and understanding every clause. If something seems unclear or unfair:
📌 Ask questions—Seek clarification from HR or legal experts.
📌 Negotiate—If certain terms don’t work for you, try to modify them before signing.
📌 Get everything in writing—Verbal promises mean nothing if they’re not documented.
By carefully reviewing your contract, you can protect your rights, avoid hidden pitfalls, and ensure a fair and rewarding work experience.
Before you sign, make sure the contract works for you! ✅