Hiring Employees 101: Types of Employment Contract 2 years ago

There is no golden rule when writing an employment contract, but it shall provide everything an individual has to know regarding their employment. 

If it contains fewer terms and conditions than those mandated by labor laws, the employer may encounter legal and financial difficulties due to a vague or poorly written employment contract.

Your contract should explain the duration of the employment to manage any expectations that may arise by clarifying the type of employment you will offer to your employees. 

Here are the different types of employment to consider when writing a contract.

1. Probationary employment - Employees undergo a trial or training of six (6) months before transiting to a regular employee. During this period, employee's on probation are assessed on their ability to perform on the job
2. Project-based employment - An employee is employed for a particular project in which the duration will be predetermined, after which the employee's participation will either be completed or terminated. 
3. Seasonal employment  - Some jobs are seasonal, meaning they can only be done at certain seasons of the year. One example is around the holiday season when they generally serve as temporary or part-time employees to deal with the increased workload.
4. Fixed Term employment  - also known as contractual employees who only work for an agreed duration or pre-determined date of completion
5. Casual employment - Any employee whose work is neither regular, project-based, nor seasonal –An employee is hired to carry out a task unrelated to the employer's primary business. At the time, both parties must be informed of the specific duration of the job. 
6. Regular or Permanent employment - Those employed for a minimum of one (1) year are considered regular or permanent; otherwise, there is an agreement of a longer contract, and they cannot be terminated without valid, legal grounds established by law.

Once you have identified the type of employment you will provide, make sure to include Restrictive clauses, as it is important for your business.

1. Non-Disclosure - This prevents information and ideas from being stolen or disclosed to rivals or competitors, read What is a Non-Disclosure Agreement?
2. Non-Solicitation - Prohibits an employee from starting a rival firm for a certain amount of time after leaving their job or from directly or indirectly luring away, offering, or hiring any former employer's personnel.
3. Non-Compete - This indicates that for a specific amount of time, one party (usually the employee) is prohibited from competing against the other contracting party or its employer in a similar activity, both during and after employment.
    

Probationary Period

It is standard practice for employees to serve a six (6) month probationary period before beginning regular or permanent employment with the company. The employment contract must also provide clear instructions regarding the requirements for regularization. Following that, the employee will be made permanent unless a longer contract is agreed upon.

You can read more about the clauses you should include in an employment contract when you check Startup Guide: Employment Contracts

Need an ironclad employment contract? Reach out to our lawyers at Digest.ph!