5 Important Clauses for Your Employment Contract

 In Employment Law, News, Start Ups

We are frequently asked by employers if certain clauses are essential or not when drafting employment contracts.

Employment contract law means that as soon as an employee commences working, you automatically have a contract of employment with that employee. Employment Law also requires that employers provide a written statement to new employees within two months setting out certain prescribed information.

For example, the statement must include the following: –

  • The name of the employer and the employee
  • The address of the employer in the state
  • Details of where the employee is expected to carry out their duties
  • The title of the job or nature of the work
  • The date the employment starts. If temporary, the expected duration
  • The rate of pay or the method of calculation
  • Details of how it is paid
  • Details of any paid leave
  • Details in relation to overtime

The above list is a basic one and a statement including these must be signed and dated by or on behalf of the employer. Most employers realise that in order to protect their interests there are a number of other key clauses which ought to be included. What’s best to include will depend on the nature of the employer’s business and the employment relationship.

Below we have chosen 5 such clauses and discuss briefly their usefulness: –

·      Mobility Clause

The best contracts have a robust mobility clause allowing an employee to be reassigned or relocated in the course of the employment. Caution is always required when relying on such clauses, in particular, employers are required to act reasonably and responsibly towards their employees in doing so. The Court of Appeal has rejected a notion that such a clause is implied into a contract so a good mobility clause is crucial to maintain flexibility.

·      Probationary Period

Employers and employees can agree upon a period within which either can terminate the employment contract at the early stage of the employment relationship. Recent caselaw has reminded employers that if things are not working out, an employee should still receive fair procedures. It is most important that a short period of notice is included in such a clause so that an employer may invoke a shorter period of notice if a probationary dismissal is needed.

·      Restrictive Covenants

Restrictive Covenants can take the form of either non-compete or non-solicitation agreement. The latter prohibits an employee from competing with the employer during the employment as well as for a particular period of time after termination. Non-solicitation agreements are used to prevent an employee from soliciting customers while employed or for a particular period of time after termination. Regularly, such a clause would also be used to prohibit soliciting staff of the employer.

·      Gardening Leave

Gardening Leave is a useful contractual clause which can protect an employer within a key member or a senior management contract. The purpose of such a clause is to ensure that a departure of such individuals has a minimal impact on the business of the employer. Usually the intention is to keep the employee away from the business to protect confidential information and goodwill and goes hand in hand with restrictive covenant. However, it will also allow the employee’s successor to get a proper debriefing and to enable a smooth handover. In simple terms a Gardening Leave clause should add to the useful contractual clauses that help protect an organisation react to the fast-paced modern employment environment.

·      Data Protection/IT Acceptable Use Provisions

Some recent decisions of the WRC and Labour Court show the critical benefit to a business of having a Data Protection Policy and IT Acceptable Usage Policy. In a recent case where an employee compiled a log of confidential information for her own use, her employer’s data protection policy, contract and own professional code of conduct supported the employer’s disciplinary procedure and her unfair dismissal claim was unsuccessful. Furthermore, we would urge employers to review their current contracts as very often employment contracts can contain provisions providing for their data to be processed with their consent. It is generally considered that employees are not in a position to freely give, refuse or revoke consent. An employer should consider using other legal grounds for processing personal data.

All contractual terms may be subject to limitation and their enforceability in the particular circumstances will depend on the wording of the clause itself.

At Patrick F O’Reilly, our employment law legal team work with employers to ensure your employment contracts protect you adequately and to ensure you are compliant with key areas of employment law. For more information on employment contracts or any employment matter, please contact Patricia Heavey at patricia.heavey@pforeilly.ie.

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