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Things you need to know about Probationary Employment Contract.


1. What is an Employment Contract? 

An Employment Contract (the “Contract”) is a written agreement between the employer and employee stating the terms of the latter’s employment.  The Contract contains stipulations regarding the employee’s (a) salary; (b) benefits & allowances; (c) job title; and (d) job responsibilities.

The Contract may also contain stipulations intended to protect the employer during and after the employment relationship such as (a) confidentiality of the employer’s proprietary information and trade secrets; (b) non-solicitation of the employer’s clients and employees; and (c) the employer’s ownership of intellectual property rights over the employee’s work.  

With Legal Tree you can easily create an Employment Contract with all the essential terms of the employment relationship. You may also add stipulations to further protect the employer (i.e. non-competition, non-solicitation) as discussed above. 


2. What does it mean when the employee is probationary?

A probationary employee is under observation for a certain period of time to determine if he is qualified for permanent employment. This gives the employer an opportunity to observe if the probationary employee is a good fit for the business.  This is different from regular employment which is permanent from the first day of his employment and for an indefinite period.

The Employment Contract indicates the period the employee will remain probationary starting from the first day of his employment. At the end of the probationary period the employer must decide whether to terminate the employee or make him regular.


3. When do you need an Employment Contract?

An Employment Contract is used when you are hiring another person as your employee and you want to clearly outline the terms of employment.


4. How can an Employment Contract protect you?

An Employment Contract protects both the employer and employee because it puts in writing their respective rights and obligations.

For the employee the Contract clearly states the salary and any benefits he is entitled to.  At the same time the Contract describes his job title & responsibilities and informs him exactly what kind of work product is expected from him.

On the other hand, the Contract gives the employer flexibility to hire an employee only after he has determined that the employee is a good fit for the business.  This reduces the risk that an employer will be hiring someone who is not the right fit for the position or maybe even prejudicial to the business.

The Contract may also contain stipulations to further protect his interest.  These include stipulations granting the employer ownership of the intellectual property rights over the employee’s work product.  Other stipulations require the employee to keep confidential the employer’s proprietary information & trade secrets and prohibits the employee from having any conflict of interest with the employer’s business.


5. What information do you need to create the Employment Contract?

To create your Employment Contract you’ll need the following minimum information:

  1. The name, address and nationality of the employee
  2. The type of employer (i.e. individual or business) as well as name.
  3. The duration of the probationary period.
  4. Basic terms of the employment namely: (a) salary & benefits; (b) job title & duties; (c) place of work; and (d) working hours.

Related Documents.

Activities that involve a Probationary Employment Contract sometimes use the following documents. You may be interested in them:

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