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Pros & Cons of Employment Contracts

Though Free Employment Contract Templates are available online, it is better to gain some more information regarding the same. This document defines the relationship between an employer and employee legally in written form.

Do you know? You may or may not have an Employment Contract signed by all the employees in your firm.

To your surprise, some employers consider it an exception rather than a rule. However, making the employee sign one is a safe-side for an employer who can take any legal action based on the same.

This legal document contains both the things: what the employee will do for the firm & what the firm will do for the employee?

10 Things Every Employment Contract Template Must Have

 Advantages of Using Employment Contracts

Employee’s Ability is controlled

Some employees are required to be trained and the costs are high for the firm. In such cases, having a written contract signed by the employee locks him for a specific term. The employee is agreed to not leave the firm without prior notice (at least 90 days) and he cannot leave before the specified duration ends.

However, nobody can be forced to stay and so there is a penalty to be suffered by the employee if they break the terms.

Confidential Information is preserved

Sometimes, the employer may use a free printable confidentiality agreement form to be signed by the employee besides the contract. It’s essential if the employee will be learning confidential and sensitive information about your business.

A better Deal on the Table

Hiring a highly-skilled employee who is working for your competition is difficult at times. With better offers for that particular candidate, you can approach with an Employment Contract specifying the deal he can think upon.


As mentioned above, the employment contract helps the employer gain better control over the employee. For instance, if the employee is not performing as per the expectations of the firm and is not improving regardless of repeated notice, he can be fired.

Disadvantages of using Employment Contracts

Most people are aware of the benefits of this legal document but there is a flip side too.

Two-way Binding

The flexibility gets limited for both the parties involved. It is realized when either of the party finds the contract terms troublesome at any later stage. The contract terms cannot be suddenly changed then without renegotiating it. In such a situation, the employer is hanged up as there is no guarantee that the employee will agree with the new terms.

Covenant of Good Faith & Fair Dealing

A special obligation to deal fairly with the employee is raised. If the employer doesn’t treat the employee as mentioned in the contract, they are legally responsible for violating the terms.

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