How to Avoid Contract Disputes with Your Employees

Saving time and money is important in any business. You probably already know how to cut costs and minimize the use of resources and labor hours in the back end of your business.

However, you might not have given much thought to the expenses associated with employee disputes. If your employee is unhappy with something in the workplace, they might choose to take legal action against you.

Legal disputes can take several months to resolve and could cost you thousands of dollars in lawyer fees. Major disputes can negatively impact your reputation, which may cause you to lose your current clients or customers and struggle to bring new people to your business in the future.

One of the most common causes of workplace disputes is disagreements in contract terms. Below, we’ve covered what an employment contract is and how you can avoid contract disputes.

 

Employment Contracts

When you hire a new employee, you will both sign a contract that is legally binding. The employment contract states the terms and conditions of the employment, including the responsibilities and rights of both you and your employee.

Your contracts will contain statutory rights that protect the rights of you and your employees. Usually, this includes the start and end dates of the employment, salary or hourly rate, holiday and maternity leave, and period of notice.

Employment contracts can also include additional details that are not statutory rights, such as perks and incentives. The contract can be written or verbal.

Avoiding Disputes in Employment Contracts

Employees can raise disputes over clauses in contracts or inconsistencies and errors in your contracts. Here are some top tips to avoid contract disputes with your employees.

Use Written Contracts

Verbal agreements cannot be used as evidence if your employee takes you to court. Writing everything down avoids misinterpretation or confusion over the terms of the contract.

Even if you have a trusting relationship with your employees, you should always use a written contract that gets signed by both parties.

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Make Everything Crystal Clear

Your contract should be as clear as possible to avoid misinterpretation. Both you and your employee should know exactly what is expected of them, including your rights and duties, when you sign the contract.

If you’re unsure how to write a clear and concise employment contract, consider hiring a contract lawyer who is an expert in employment law. They will either draft your contracts for you or review your existing contracts to ensure they are free of errors or loopholes.

Document Everything

If you and one of your employees have discussed any changes or adjustments in contracts, you must document everything. Write down the dates and times of the conversations that you’ve had (whether in person or over the phone) and exactly what was said during each one.

In some cases where major changes have been made to the terms of the contract, you might need to draft a completely new contract for your employee to sign.