Important details in an Employment Contract

Last updated on Jun 21, 2022

All contracts start with the description of who you are, your role in the organization and details of your job. This is an example of how the first term of your employment contract would look like:

“XYZ Future Ltd. (“XYZ”), is hiring Abhinav Chandra as “Lead Architect” for a period of 12 months with effect from 15 February, 2019.”

Your Name 

In an employment contract, your name has to be expressly written. The names of the parties involved will be the first and most important detail in your employment contract. In the example given above, it is clear that XYZ is hiring only Abhinav for the job.

Organization’s Name

The official and proper name of the organization has to be in the contract. It should be mentioned that you are being hired by such an organization. In the example given above, it is clearly given that XYZ Future Ltd (“XYZ”) is the organization hiring for the job.

Your Employer’s Name

If you are being hired by an organization, then the name of the party hiring you would be the organization itself. Either the head of the organization or the head of human resources department (HR) will sign your contract on behalf of the organization.

If you are being hired by an individual, your contract will specifically have your employer’s name and only your employer will sign your contract.

For example: “Dr. Raj Sharma, is hiring Abhinav Chandra as “Lead Architect” for a period of 12 months with effect from 15 February, 2019.”

Job Description

The employment contract will have the description of the position you are being hired for and what the terms of your employment are, i.e. what you are expected to do. In the example given above, the job description for Abhinav is “Lead Architect”. His contract will mention that he is being hired for that post and will also include what his work as a lead architect would entail.

Employment Period

Contracts are usually either for a specific period of time or for specific tasks. The employment contract will state the period of time you are being hired for. In the example given above, the period has been specified as 12 months with effect from 15 February, 2019.

In some cases, employers might even add a probation period. This means that once hired, you will be on probation for a specific period of time. After the probation period expires, your employer will assess your work and capabilities and decide whether to confirm your employment or not.

Salary and Other Allowances

The contract has to specify your salary amount in numerals as well as in words. If you do want to modify this amount, make sure you do this before signing the contract as you cannot negotiate your salary amount until the contract expires. Keep in mind that you can ask for a raise in your salary based on the competitive market rates for your job position, if you have previous work experience or if you hold any degrees or certificates in higher education.

Some other allowances that may be mentioned in the contract or in the HR policy are:

  • Relocation allowances, if you relocate to another city for the job provided by the employer.
  • Reimbursement for any work-related expenses.

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