Most employment contracts have provisions that outline the procedure of firing an employee and define what is permissible to do for the employer. They specify the terms and conditions of the job you are accepting. It is crucial to carefully review the terms before signing any document presented by the employer.
Generally, employment contracts are meant to restrict the employer’s ability to fire an employee at will. There are three different types of employment contracts which include written, oral and implied. Usually as soon as you sign the contract, it becomes your obligation to abide by the terms of the employment.
What Are The Different Types of Employment Contracts?
There are three types of employment contracts. First is the written contract which is the official document signed by both parties. The employer and the employee agree to the terms of employment. Furthermore, an employer can also establish an oral valid employment contract. If an employer promises an employee that they will not be fired without a good cause in the interview then this would be considered a valid oral agreement. Courts will uphold these brief conversations if they pass the valid contract test. Therefore, not every employment contract has to be in writing.
Another type of contract is implied contract, which is determined through implications by an employer to the employee rather than express terms. For example, if an employer states specific terms in the employment handbook regarding the job, it is implied that it applies to the current employer regardless of a contract existing between them. However, courts are reluctant to enforce implied contracts between employer and employee. But they may enforce them along with the oral contract in some cases.
When Can An Employer Legally Terminate An Employee With An Employment Contract?
Generally most employers need a good cause to fire the employee who has any sort of employment contract with the employer. Good cause is usually defined as a permissive reason to fire an employee. Below describe some circumstances which are considered meet the standards of firing an employee:
- Low productivity;
- Inadequate work performance;
- Failure to follow instructions;
- Violating company rules;
- Illegal acts;
- Engaging in dishonesty;
- Constantly are tardy;
- Endangering health and safety of their coworkers;
- Revealing company trade secrets and;
- Disrupting the work environment.
Additionally, the employer must be fair and deal with them in good faith. Courts can step in to ensure that an employer is dealing justly and not taking advantage of its employees.
What is The Purpose of Employment Contracts?
An employment contract limits the employer right to fire at will. For any employee to be rightfully fired there must be a showing of good cause for the termination. Otherwise, the termination will be considered a wrongful termination. The following reasons explain why some employers use employment contracts:
- To secure a highly skilled employee that will open up many opportunities for the company;
- To draft non-compete clauses that are created to ensure the employee does not work for a competing business during a period of time after leaving the company;
- Written employment contracts are easier to uphold in court because it is more clear on the agreements of the terms of an employment and;
- The employment contract protects the rights of both the employer and employee.
How Can An Employer Approach An Employee Regarding Termination?
For an employer it is generally difficult to decide how and when to terminate an employee. There is no easy way to fire someone. It is crucial to plan the meeting according to the company’s procedures to protect the employer from future liability from the employees. The following procedures may help in minimizing those liabilities:
- The employer can create a space for a private conservation to limit employee’s exposure and embarrassment;
- Having a human resources representative present in the meeting will be useful for future disputes and serve as a witness for information shared during that meeting;
- Be concise in providing the explanation for terminating the employee;
- Be professional and show the employee appreciation for their contributions made to the company thus far;
- Provide a detailed description about what happens after their termination in terms of wages and bonuses;
Generally, if you are mindful about these practices on firing an employee, then you may succeed in lowering your exposure to liability in future employee disputes.
When Do I Need to Contact An Employment Lawyer?
If you are either an employer or an employee, who thinks their rights have been violated in terms of an employment contract, you can seek out an contract lawyer to assist with possible claims. If an employer wrongly terminated an employee under an employment contract, the employer could be exposing themselves to liability. Therefore, it is important to seek a lawyer earlier in the process to minimize the liabilities on either side.