I run a labour hire company. What do I need in my employment contract?

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Table of Contents

• Terms of Engagement
• Non-Disclosure
• Non-Competition & Non-Solicitation
• Indemnification
• Conclusion

In today’s tumultuous business environment, it is more important than ever for companies to take proactive steps in minimising risks and costs. As a labour hire company, you may employ a dozen or hundreds of personnel whom you on-hire to an array of host businesses. As your staff work offsite, in a variety of settings and without your direct supervision, the potential for risk increases exponentially. Accordingly, in your line of work it is essential that employee’s obligations and responsibilities are clearly defined and understood. The easiest way to achieve this is to reduce them into writing under an employment contract. Now you may ask yourself, but what should a labour hire contract of employment entail?

Terms of Engagement

Any well-drafted employment contract should detail the terms under which the employee is hired. It should outline the rights and responsibilities of the employee, the duration of the engagement and the rights of termination.

Non-Disclosure

Labour hire staff occupy a unique position of privilege, in that their work allows them to come into possession of a myriad of confidential, proprietary, technical, financial, marketing, manufacturing, distribution or other business information of the host business. At times they may even be made privy to trade secrets. As such, it is essential that your employment contracts contain a non-disclosure clause. The clause itself should detail the types of information that may be obtained, the purposes for which they may be used and under what circumstances, if any, they may be disclosed.

Non-Competition & Non-Solicitation

Non-competition clauses prevent employees from engaging in activities, which are either directly or indirectly competitive with your business for a certain period of time, i.e. poaching your clients, or opening up shop within the same locality. Similarly, non-solicitation clauses stop employees from inducing and/or attempting to influence other employees in a way that is detrimental to your business, i.e. suggesting that they stop working for you and commence working with a competitor or with them. Such clauses are a cornerstone of any contract of employment and must be drafted with sufficient particularity to account for the intricacies of your business activities.

Indemnification

An indemnification clause will protect you against all actions, claims, sums, demands, losses or damages (including legal fees), which your company may suffer or become liable for as a result of your employees breach of contract. It is a sure-fire way of limiting liability for employee actions undertaken outside the terms of the contract and is thus an integral part of any employment agreement.

Conclusion

As a prudent business owner, it is essential that you maintain a well-drafted employment. Such a document will not only give you and your clients peace of mind, it will also reduce the potential for disputes, which all too often arise as a consequence of ill-defined employee rights and obligations. Our LegalVision team of employment lawyers specialise in contract drafting and review and would be happy to assist you with any queries you may have regarding the same.