4 Things to Watch Out for in an Employment Contract

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Contracts…terrifying binding legal agreements with fine print that could trick you into giving up your first child for free Wi-Fi. Luckily that was an experiment to prove that people are stupid when it comes to internet security, but when things get serious a lot more than your first born might be on the line. The rest of your career might be on the (dotted) line. Here are things you as an employee should look for in a contract.


1. Career Destroyer


Some provisions are reasonable, like what happens if you excrete on the boss’ desk…but some can be a bit more restrictive. For example, make sure to check the restrictive clauses which might include non-competition clause which forbids you under threat of legal action to work for a competitor, a clause which can seriously dampen your job prospects and career advancement.

Although not contractual Apple and Google’s employees (and some other high tech workers) sued their employers for agreeing not to poach employees from one another…and won. You need to be especially careful of this if you are a highly specialized professional working within a niche market, which could end your career for a predefined (by the non-compete clause) amount of time. In an extreme situation, your contract might take you out of the market long enough to make your knowledge dated forcing you to update your knowledge base costing even more time and money.

2. Relocation

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Another important clause you need to look out for is one that pertains to location. You might assume that you will be working where you are being interviewed, but if the company has a global presence, and if your contract has such a provision you might be forced to relocate. Sure this is great if you expect it but being surprised by your boss telling you “Well we’re sending to Qatar…it’s in your contract” might be a complete system shock. To add insult to injury, your contract might even state that the company won’t cover relocation fees.

3. Termination


This is like having a will; nobody really wants to talk about it, but it’s important to know what will happen in the event of your (jobs) untimely demise and the reasons for said demise. Watch out for the term “sole discretion” which basically means your employer can fire you at anytime, and more importantly without any notice.

On the opposite side of the coin, you need to know what your obligations are towards your employer in the case of resignation, how much notice you have to give or even the format of your resignation (hard copy, email, exit interview etc.).

4. Pay and Bonuses

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Usually, your offer letter and what is on your contract will complement each other, but sometimes, usually due to oversight, there might be a discrepancy.  Also, make sure bonuses, commissions and contribution to retirement funds are listed giving you grounds to debate during pay raises or promotions. A mistake in this section of your contract can financially cripple you, and you wouldn’t have a legal leg to stand on.

See Also: 4 Mistakes That Kill Employee Morale

Are there any other things you should look out for in a contract? Let us know in the comment section below.