Drafting an employment contract: use the checklist!

Are you planning to hire new employees soon? If so, now is the time to take another look at your employment contract. It is important to look critically at the provisions that will eventually be signed for. Below you will find a checklist of 6 indispensable points when drafting or amending an employment contract.

1. CAO applicable?

It is important to check whether a collective bargaining agreement applies. If so, it is advisable to include it in the employment contract. Next, provisions in the employment contract should be aligned with the collective bargaining agreement provisions. If provisions in the employment contract conflict with the collective bargaining agreement, they are null and void.

2. Probation

The agreement of a probationary period must be in writing. Since the Work and Security Act, a probationary period may only be included in an employment contract that lasts longer than 6 months. In practice, an employment contract of 7 months is often entered into. The length of the probationary period depends on the period for which the employment contract is entered into. The probationary period may be a maximum of one month in the case of 1) a fixed-term employment contract of less than 2 years but longer than 6 months or 2) a fixed-term employment contract where the end is not fixed on a calendar date. The probationary period may not exceed two months in the case of 1) a fixed-term employment contract of 2 years or more or 2) an employment contract of indefinite duration. Note that the probationary period must be the same for the employer and the employee.

3. Competition and penalty clause

As of January 1, 2015, the basic principle is that a non-competition clause may no longer be included in a fixed-term employment contract. If you, as an employer, still consider this desirable, you must motivate in writing that there are substantial business interests that make the inclusion of a non-competition clause necessary. You can include a non-competition clause in an employment contract for an indefinite period of time, but this must also be justified. If a fixed-term employment contract is converted to an employment contract for an indefinite period of time, as an employer you should be careful to include a non-competition clause (again).

Incidentally, it is highly advisable to include a penalty clause, linked to the non-competition clause, in the employment contract. A penalty clause agreed to in writing means that if an employee violates the non-competition clause, you as an employer can claim an immediately payable penalty per violation and a penalty for each day that the violation continues.

4. Employment Conditions Regulations

Many employers have employment rules (also called regulations or protocols) that set forth their "house rules." Examples include rules on leave, sick leave, and drug and alcohol policy. It is advisable to declare the labor conditions regulations applicable in their entirety in the employment contract and to include the fact that the employee, by signing the employment contract, declares to agree with the contents of the labor conditions regulations.

5. Notice

The legal notice period for an employee is one month, regardless of the length of employment. The legal notice period for the employer depends on the length of employment:

• An employment contract of 5 years or less: one month;
• An employment contract between 5 and 10 years: two months;
• An employment contract between 10 and 15 years: three months;
• An employment contract of 15 years or more: four months.

The employment contract may stipulate that the employee must observe a notice period longer than one month. This is only allowed if the employer is subject to a double notice period.

6. Unilateral modification clause

An employment contract cannot be changed unilaterally. It happens quite often that employers want to change an employee's pay or place of employment, for example. In principle, this can only be done with the employee's consent. If the employee does not give his or her consent, then it is in principle only possible to make a change if a unilateral change clause is included in the employment contract. It is therefore advisable to include such a clause in the employment contract. However, if employers wish to invoke such a clause, it must still be demonstrated that it is necessary, within the framework of the company's interests, to amend the employment condition.

Do you want to know how you can reduce risks as an employer with an employment contract? Or would you like to have an employment contract drafted or reviewed? Then contact the lawyers at paraDIGMA groep.