Contract of Employment

Create a Contract of Employment Online - Complete Guide

A Contract of Employment is a legally binding agreement between an employer and an employee. It sets out the terms of work - including duties, pay, working hours, benefits, and the rights and responsibilities of each party. Clear employment contracts reduce risk, prevent disputes, and ensure that both sides understand what is expected from the start.

This guide explains what a Contract of Employment includes, why it matters, how it works across different jurisdictions and how to create a fair, legally compliant employment agreement for any role or industry.

CONTENTS

What Is a Contract of Employment?

A Contract of Employment is a formal agreement that governs the working relationship between an employer and an employee.

It records the key terms of employment, such as:

• Job title and duties
• Pay and benefits
• Working hours and location
• Holiday and leave entitlements
• Probation periods
• Termination and notice rules
• Confidentiality and conduct expectations

Across most jurisdictions, employment contracts must meet minimum statutory rights (such as minimum wage, maximum working hours, safety protections and anti-discrimination rules). Beyond these standards, employers and employees are free to agree additional terms, provided they do not undermine mandatory employment laws.

Global context example:

• UK - Employment Rights Act 1996 and Working Time Regulations
• EU - Employment Contracts Directive & national labour codes
• US - Federal and State employment laws (e.g., FLSA, state labour codes)
• Australia / NZ - Fair Work Act / Employment Relations Act

Regardless of location, the purpose is the same: to define the working relationship clearly and legally.

What Should a Contract of Employment Include?

While every contract is different, most cover the same key elements to ensure legal compliance and clarity.

A typical employment contract should include:

• Names of employer and employee.
• Job title and description of duties.
• Start date and (if applicable) end date for fixed-term roles.
• Place of work and any mobility requirements.
• Pay and frequency of payment.
• Working hours and rest breaks.
• Holiday entitlement and rules for carrying over leave.
• Notice periods for termination.
• Sick pay and absence policies.
• Probationary period details.
• Pension scheme information.
• Confidentiality and data protection obligations.
• Disciplinary and grievance procedures.
• Non-compete or restrictive covenants (if applicable).
• Signatures of both parties.

Why Is a Contract of Employment Important?

A well-drafted contract protects both employer and employee by ensuring clarity and reducing misunderstandings.

Without a clear contract:

• Disputes over pay, hours, duties, or performance become more likely
• Termination decisions may be legally challenged
• Employees may lack clarity on rights and expectations
• Employers may breach local labour laws without realising

With a clear, compliant contract:

• Rights and obligations are transparent
• Performance expectations and duties are understood
• Pay and benefits are recorded accurately
• Termination and notice processes are clear and lawful
• The working relationship is built on trust and fairness

A Contract of Employment is not just administrative - it is the legal foundation of the working relationship.

Types of Employment Contract

Employment arrangements differ depending on the nature of the role and the degree of flexibility.

Common contract types include:

Permanent Employment
Ongoing employment with no fixed end date - full-time or part-time.

Fixed-Term Contracts
Employment for a set duration, project or season.

Casual or Temporary Employment
Short-term or as-needed work, often with variable hours.

Zero-Hours / On-Call Arrangements
No guaranteed hours; work provided only when available. (Regulated differently around the world.)

Shift-Based or Rotational Contracts
Used in industries requiring shift work, night work, or rotating schedules.

Freelance / Contractor Agreements
For self-employed individuals - not employment contracts and not covered by employee protections.

Understanding the correct category ensures compliance with labour laws and tax rules.

Legal Requirements for Employment Contracts

Employment law varies globally, but most jurisdictions require employment terms to meet minimum statutory rights relating to:

• Minimum wage
• Working time limits & rest breaks
• Health & safety
• Anti-discrimination protections
• Holiday/leave entitlements
• Notice periods
• Protection from unlawful dismissal

Jurisdiction snapshots (examples):

UK
Employees must receive core written particulars and statutory rights under ERA 1996.

EU
The EU Transparent & Predictable Working Conditions Directive sets minimum disclosure rights for employees.

US
Employment may be “at-will” in many states, but federal and state laws still govern wages, overtime, discrimination, and safety.

Australia / NZ
Fair Work Act / ERA require written terms and mandatory minimums.

Regardless of country, contracts cannot remove statutory protections - non-compliant clauses are usually void.

How to Create a Contract of Employment

Creating an effective employment contract involves combining legal compliance with practical clarity.

The standard process:

1. Define the role
Set out duties, reporting lines, job purpose and performance expectations.

2. Agree key commercial terms
Salary, working hours, benefits, location, remote-working rules and leave entitlements.

3. Add mandatory jurisdiction-specific requirements
Include statutory rights such as minimum holiday, rest breaks and notice periods.

4. Insert business policies
Refer to disciplinary procedures, conduct policies, data protection rules, and health & safety requirements.

5. Include confidentiality & IP clauses
Protect sensitive information and clarify ownership of work created by the employee.

6. Review, negotiate and sign
Both parties should understand and agree the terms before signing (electronic signatures usually acceptable).

7. Provide each party with a copy
Both employer and employee should retain signed versions.

A clear, legally aligned contract reduces risk and builds trust from day one.

How Much Does It Cost to Draft a Contract of Employment?

The cost depends on whether you use a solicitor, an HR service, or an online document tool - and how complex the terms are.

Typical options include:

• Solicitor drafted: £250–£800 depending on complexity and seniority of the role.
• HR consultants or specialists: £100–£400 for tailored agreements.
• Online Document Tool: £25–£100 for solicitor-verified documents.

Contract of Employment Template

The example below shows the structure of a typical employment contract.
It is not jurisdiction-specific and does not replace legal requirements in your location.

This Employment Contract is made on [date] between:

Employer:
Name: ____________________________
Address: __________________________

Employee:
Name: ____________________________
Address: __________________________

The Employer agrees to employ the Employee in the role of [Job Title] starting on [Start Date] at [Work Location].

The Employee will receive a salary of £[amount] per [month/year], paid [monthly/weekly], and will work [number] hours per week.

The Employee is entitled to [number] days of paid annual leave per year, in addition to public holidays.

This agreement is governed by the laws of [Country/State].

Employer Signature:
Signature: ________________________

Employee Signature:
Signature: __________

Robot Lawyer generates a solicitor-verified Contract of Employment, tailored to your role, industry and location. It covers pay, hours, duties, leave, policies, confidentiality, termination rules and statutory rights - ensuring clarity and legal reliability.

Create a professional Contract of Employment — with Robot Lawyer

Start the questionnaire to generate your document

Contract of Employment FAQs

Do all employees need a written contract?

Yes. In most jurisdictions employers must provide written terms. A full contract offers greater protection and clarity than a minimum statement.

Is a Contract of Employment legally binding?

Yes - once accepted and signed, it becomes a binding agreement governing rights and obligations.

Can an employment contract be changed later?

Yes, but usually only with mutual agreement. Any variations should be confirmed in writing.

Are zero-hours or casual contracts legal?

In many countries they are legal but regulated. Workers must still receive statutory rights such as pay, holiday entitlement and protection from discrimination.

What happens if there is no written contract?

Employment still exists, but disputes become harder to resolve. Courts will apply statutory rights and evidence of agreed verbal terms.

Are electronic signatures accepted?

Yes - e-signatures are legally recognised in many countries and widely used for employment contracts.

How does an employment contract differ from a freelance agreement?

Employees receive statutory protections (holiday, minimum wage, notice rights, etc.). Freelancers are self-employed and governed by commercial contracts, not employment law.

Create a Contract of Employment Online

Need an employment contract for your business? Robot Lawyer makes it fast and affordable to generate a professional, solicitor-verified Contract of Employment.

How it works:

1. Select Create Document ➝ below and start the questionnaire.
2. Answer a few quick questions about the role and company.
3. Receive a solicitor-verified employment contract instantly.
4. Save, sign, and share with your employee.

Contract of Employment

Start the questionnaire to generate your document