A contract of employment is a contract of service as opposed to a contract for service. A person operating under a contract for service is not an employee of the company and is better (and normally) described as an independent contractor.
There are several different types of employment contract, including, for example:
Fixed-term/specified-purpose contracts; Contracts for Independent Contractors; Contracts for hourly-paid Employees; Contracts for part-time Employees; Contracts for Managerial/Clerical Staff.
As an employer you can form a contract of employment in three different ways
- written agreement
- oral agreement
- conduct of the parties: terms of the contract though not expressed can be held to exist because of the conduct of the parties and custom and practice.
WHAT IF I HAVEN’T ISSUED A CONTRACT OF EMPLOYMENT TO MY EMPLOYEES?
All employees work under a Contract of Employment. This is also called a Contract of Service. Many employees have no written contract and it is often said that such an employee ‘has no contract’ but this is not the case. The Law of Contract provides that once an offer is made by one party and accepted by another, a valid contract exists.
A contract may be in writing or agreed orally between the parties and one is just as enforceable as the other. The parties may not have formalised their relationship in writing but a contract is nevertheless in existence. It is sometimes argued by employers that an employee did not sign their contract and therefore there is no contract. This is not necessarily the case.
A contract can be accepted by actions as well as by words or in writing. Therefore if an offer of employment is made and the employee turns up and does the work, the employee has implicitly accepted the offer notwithstanding the fact that he/she may not have signed anything. However, it is always advisable to have a written contract since, in the event of a dispute and in the absence of a written document, a court will have to make a decision based on conflicting oral evidence.