5 Reasons Why Employers Should Have Written Contract of Employment

                                          By legalyearwriter
employers,written contract of emloyment

Written contract of employment is not necessary in all employment relationships.

There are occasion where an employee is temporarily engage to render services that do not require much skills and will not tamper with the business secret of a company (for instance, an office cleaner, employed to clean and mob office floor).In occasions like these, there is no need for written contract of employment.

Admittedly, statute of fraud, which had been long domesticated by many countries, provided that every contract must be in writing for it to be binding on the parties, and for it to be enforceable in law.

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It is obvious that employment laws of most state favour employees more than the employers. If you're an employer, from these states, and you want maximize profit; you need to take advantage of having a written contract of employment.

Most employment contract that are written, can still be validly enter orally, and "written contract" does not necessarily mean officially written and registered contracts. It includes, contract entered through communication and correspondence wherein both parties agree to set out the terms and conditions of the contract. 

However, contracts that are indefinite in nature are best entered in writing.

Even if it's possible to enter into employment relationship orally- without the need for written agreement- it's beneficial and safer to have written contract of employment with your employee. 

Below are good reasons why every employer should prepare and sign written contract employee.

1) Written Contract of Employment Helps an Employer To Retain Experts And Skilled Employees.

The easiest and best way to retaining special employees in your business is to sign contract of employment with them. 

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Every employer likes employing expert and skill workers, but only a few knows how to keep and maintain good working relationship with them.  

Most employers get scared of asking an expert employee to sign contract of employment with them. They think that doing this will make them lose the expert employee. No serious minded  expert employee, eager to work, will refuse to sign a contract of employment with you, provided his welfare and benefits are protected in the contract.

The benefit is where an employee read and sign a contract of employment before his employment, he will not like to deviate or do anything that will jeopardize the terms of the contract.

2)  Written Contract of Employment Sets Standard And Put an Employer in Control

Having a written contract with an employee will set standard for your business.  

 Employees know their limit and the consequences of going beyond their express rights where the contract is in writing. 

Without a written contract of employment, it will hard to ascertain the exact measure of right of an employee when the employees begin to agitate for their rights.   

Where an employees rights are stated in the employment law, it favours the employee, leaving you (the employer) at the mercy of your employees.  

Where substantial part of employees needs are reflected in a written contract, it is impossible for them to deny it in future.

Written contract guides management while apportioning salaries, leave allowances, housing and traveling allowances etc. It makes their job easier, as they will always make reference to it while determining the entitlement of each employee, and employees rarely complain of "under payment" or over payment as the case may be

3) Written Contract of Employment Clears All Uncertainties 

When you engage an employee in your business, nothing should be left on assumption -- whether the contract is oral or in writing --, everything should be made clear. 

It is easy to enter into contract of employment full of uncertainties. This occur where the agreement does not specifically state duties and obligations of employer to his employees while in service and out of service and how to carter for them. 

Some common duties and obligations of employer to an employee are:
       1. Salary or wages (as the case may be).
·      2. Leave, Sick leave, maternity leave
·       3. Death  
·       4. Holidays
·       5. Insurance
·       6. Termination of employment
·       7. Dispute

Where the contract is written, you will know what to do at any time, and if there is any misconduct on the side of the employee, it will not be difficult for you to handle.

4)  Written Contract of Employment Protects Business Secret

Every employer always want certain part of his business strategies to be kept secret. Therefore, they go for employees that will undertake to keep these secrets.

Written Contract of employment guarantee maximum protection of business secret. Where protection of business secret is included as one of the clauses in the contract, it keeps the employees in check and helps to preserve the intellectual property of the employer such that they do not go about disclosing or sharing with his competitors the secret of his business.

Company business secret is one vital aspect of companies operation that need to be properly managed and protected so that your company does not lose customers and there is no other way of doing this than to include it as a clause in the contract for your employees to sign.

Keeping confidential information of a company does not only apply where the employee is gainfully employed, but also when an employee leaves the company. Failure to take care of this important issue at the outset, when the employee is about to enter the company, may be detrimental to the employer when the employee leaves the company.


One thing every employer would like to avoid is dispute. Where there is dispute, nothing functions. Progress is limited, vision ceases, and the company cannot thrive successfully throughout the duration of dispute.

There are certain disputes that are unavoidable (such as where an employee sues an employer for injury sustained in the course of his employment. However, there are dispute that is avoidable (like where an employee is complaining of non-payment of salary, short length of holiday etc). These foreseeable disputes can be avoided by reflecting them in the contract of employment. 

You have the liberty to determine how disputes are resolve where there is a clause in the written contract that provides for means of settlement of dispute between you and your employees.

If there are still other reasons, you know, why an employer should have written contract of employment, I'd love to hear them. Please comment below.