Overview of a Statement of Terms of Employment

What is a Statement of Terms of Employment?

A Statement of Terms of Employment is a letter to state the terms under which a company would hire an employee.

When drafting a Statement of Terms of Employment, the employer should be aware of certain statutory provisions in determining the terms of employment. This includes entitlements to sick pay, holidays, and minimum notice periods for termination of employment.

What is the difference between a Written Statement and a Contract of Employment?

A Written Statement is a document that is given to the employee before starting the job. This is basically the employer’s view for the job that has been agreed on in a meeting or interview but is not signed by the employee; whereas a Contract of Employment is an official contract needed before hiring any employee and this is signed by both parties (employer and employee).

What is included in a Employment Terms Letter?

A Statement of Terms of Employment should be clear and well written. Various aspects of employment terms should be made clear such as employee’s salary, working hours, commission, annual leave entitlements, relocation provision, and career responsibilities.

The basic purpose of this letter is to make both parties (employer and employee) clear about the duties and responsibilities of employment. It will also help to minimize disputes that may arise in the future. These are the important things that should be included in all Statements of Terms of Employment.

· Name and address of both parties (employer and employee).
· Start and end date of employment (If applicable).
· Compensation, job description, and working hours.
· Entitlement to casual & sick leave policy.
· Notice period while termination.
· Non-disclosure agreement policy.

Why is Employment Terms Letter Important for a Business?

Every business needs to hire an employee according to their requirements. So, a properly drafted Statement of Terms of Employment helps them to make the new employee gain insight on how things work in an organization and what are the duties and responsibilities, and expectations of the employer.

Conclusion

A Statement of Terms of Employment helps an employer to state the terms in which an organization hires an employee. It is crucial to draft a well-written Statement of Terms of Employment to make new employees understand the culture of an organization, which ultimately leads to better retention of employees, increased productivity, and overall growth.

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