Employment contract: what must it contain and what can it contain?

An employment contract is the basic document governing the relationship between an employee and an employer. This article explains the mandatory and optional particulars of an employment contract.

WRITTEN FORM AND INFORMATION ON WORKING CONDITIONS

A valid employment contract must be concluded in writing. Oral agreements are not enough. Before the contract is signed, the employer must inform the employee of their rights, obligations and working conditions. This information may form part of the employment contract or of other written documents of the employer.

MANDATORY PARTICULARS OF AN EMPLOYMENT CONTRACT

An employment contract must contain the following essential particulars:

1. Identification of the contracting parties: Details of the employee and the employer (first name, surname, date of birth, address, company name, company ID (IČO), registered office).
2. Type of work and its brief description: For example, “accountant” with the description “keeping the accounts”.
3. Place of work: A specific place (e.g. a municipality or part of a municipality). It is not permissible to state a wider area, such as a region.
4. Start date: This is the day on which the employment begins (e.g. 1 June 2024).
5. Wage conditions: The basic component of the wage and the variable components of the wage (bonuses, rewards).

OPTIONAL PARTICULARS

In addition to the mandatory particulars, an employment contract may also contain other working conditions and benefits, which may also be set out in other documents of the employer, such as internal rules or collective agreements.

PROBATIONARY PERIOD

A probationary period must be agreed in writing; otherwise, no probationary period applies. Its maximum length is three months, with the possibility of extending it by the duration of any obstacles to work.

FIXED-TERM EMPLOYMENT

If the employment contract does not specify the duration of the employment, the employment is for an indefinite period. Fixed-term employment can be agreed for a maximum of two years and extended no more than twice within that period.

ANNUAL LEAVE ENTITLEMENT AND OTHER CONDITIONS

The employer must inform the employee of:

• How the place of work is determined.
• The weekly working hours and how they are scheduled.
• The annual leave entitlement and how it is determined.
• When the wage is due and how it is paid, including the pay dates.
• The rules for terminating employment.
• The right to training provided by the employer.

WAGE CONDITIONS AND THE COLLECTIVE AGREEMENT

Wage conditions may be set out directly in the employment contract or in a collective agreement. Collective agreements often also contain other benefits, such as higher compensation for work at night or on public holidays.

PROTECTION OF THE BUSINESS AND THE NON-COMPETE CLAUSE

An employment contract may contain clauses protecting the business, such as a confidentiality obligation or a non-compete clause, which prohibits the employee from working for a competitor after the employment ends.

INVALID PROVISIONS

An employment contract may not contain provisions that would prohibit the employee from disclosing their working conditions or from performing other gainful activity outside working hours, with the exception of competing activity, which requires the employer’s consent.

CONCLUSION

An employment contract is a key document that defines the relationship between the employer and the employee. A correctly concluded contract contains the mandatory particulars and may contain other conditions and benefits that govern the employee’s working conditions.

For more detailed information and employment contract templates, we recommend consulting an employment law expert or an accountant.