Different Contracts of Employment
Different contracts of employment are various ways that an employer and employee agree to certain terms during the employment process.3 min read
Different contracts of employment are various ways that an employer and employee agree to certain terms during the employment process. Such contracts can come in three main forms:
Regardless of the contract form, the terms depend on what the employer and employee have agreed to. In the case of an implied contract, each side expressed both actions and words.
Many employees in the United States have a presumption of working at-will. In other words, they may quit at any time, or they can be terminated for any reason, so long as the termination is legal. Illegal can be in the form of retribution or discrimination.
Montana has a different laws when it comes to hiring. For instance, a Montana employee that completes a probation period at work, or has worked for at least six months with no probation period, can be fired if the firing is within legal parameters. The employee no longer is working at-will due to the employer needing a good reason to terminate the employment of the individual. In most states, however, at-will employment is assumed unless an agreement stipulates an alternative arrangement.
Employment contracts don’t always mean a change in the at-will status of an employee. Employers and employees can agree to important aspects of the job without guaranteeing that an employee has job security.
Further, many employers tend to ask employees to sign an employment agreement acknowledging that they will only be employed at-will. For instance, if Fun Barn hires Jim, the human resources director can send a letter to him offering the job, which includes such information as:
- Job description
- Reporting relationship
- Work hours
In addition, the letter should clearly state that Jim works at-will. The director would sign and send two copies of the latter, asking Jim to sign and return once copy indicating that he accepted the position. At-will employment commences when the employer and employee have signed the agreement.
An at-will employee can be fired for any legal purpose, but the employee still has the right to enforce the terms of the agreement if an employer fails to do so.
For instance, you have an employee that signs an employment agreement including an at-will stipulation and a commission pay structure. If that employee is fired after a year, he cannot rely on the contract itself to contest the firing because that employee was only hired at-will. With that, the employee could still sue the company if the employer only paid him half of the earnings when he was hired for that year.
The two most common agreements that people use include:
- Written agreements
- Oral agreements
A written agreement is a document that details employment terms, and some contracts employ at-will employees. In addition, other contracts may curtail an employer’s leeway in firing an employee. For example, a high-level executive can be hired based on a written contract mandating he remain with the business for a certain period (ex. two or three years) and can be terminated if he violates the terms of the contract. Grounds for termination could include financial malfeasance or committing a crime.
On the other hand, an oral contract is an agreement is one that’s stated orally rather than being on paper. For instance, an employer may call an applicant over the phone and offer the job. The employer could mention such things as a start date, schedule and salary. A person who accepts the position enters a valid oral contract.
Even though oral contracts are just as valid as a written one, they can be harder to enforce in a court. If a dispute arises over an oral contract, it would be an employer’s word against the employee. An oral contract can also pertain to at-will employment, or it could limit an employer’s right to fire an employee.
For instance, an employer that says he needs a full-year commitment from a potential employee and will not fire that employee as long as he or she meets certain quotas can hold that employee accountable for a full year if that employee agrees to the oral arrangement. That employee can only be fired if he or she fails to meet the outlined quotas.
For more information on different contracts of employment, submit your legal inquiry to our UpCounsel marketplace. UpCounsel’s quality lawyers will assist you in drafting a comprehensive employer-employee contract that will safeguard all parties legally. In addition, our lawyers will assist you regarding potential legal disputes, or if contract disputes lead to the courtroom.