9 Things to Include in an Individual Employment Contract

An individual employment contract (or labor agreement) is the foundational document in any employer-employee relationship. It confirms the employee's acceptance to perform activities under the authority of an employer (individual or legal entity) in exchange for a salary. It establishes the conditions under which the employment relationship will unfold.

The validity of the individual employment contract is contingent on its written form (an obligation on the part of the employer), and its content must meet the mandatory requirements of labor law. Among the most crucial elements to be included in the individual employment contract are:

An employment contract template should contain provisions on benefits

Starting from the end of October 2022, employers are required to include in the individual employment contract all benefits granted to employees (accommodation, meals, subscriptions, gift vouchers, holiday vouchers, bonuses, etc.).

If changes to the benefits provided to employees occur, the employer must conclude an addendum to the individual employment contract before implementing them. Exceptions apply when such a modification is expressly provided for by law or in the applicable collective labor agreement.

Failure to comply with this provision may entitle the affected employee to address the Labor Inspection or the courts of law to recover the damages suffered.

An employment contract template should contain provisions on performance bonuses

Yes, they must be included in the individual employment contract. Until recently, employers were not obliged to specify in the employment contract all the advantages granted to employees in addition to their salary, such as performance bonuses.

To align with EU transparency requirements, there is now an obligation to include provisions regarding performance bonuses in individual employment contracts. However, exact bonus amounts, or a precise calculation method need not be included, allowing flexibility based on specific financial performance in a given year.

An employment contract template should contain provisiong about the employer-provided professional training

Professional training is a crucial means for employees to enhance their skills and improve performance at work for career advancement, often neglected by both parties. The individual employment contract should outline the employer's commitment to providing professional training. Employees have the right to request training leave, with or without pay.

Employers are obligated to ensure employee participation in training programs at least once every two years (for units with at least 21 employees) or once every three years (for units with fewer than 21 employees).

Workplace

The individual employment contract should contain provisions regarding the workplace. If there is no fixed workplace, the possibility for the employee to work in different locations should be specified, along with whether the employer covers or reimburses travel between these locations.

An employment contract template should contain the work schedule

The work schedule should be clearly defined in the individual employment contract. It should specify the normal working hours per day and week, conditions for overtime, and, if applicable, the organization of shift work.

Working time represents any period during which the employee performs work, is at the disposal of the employer, and fulfills tasks and duties in accordance with the provisions of the individual employment contract, the applicable collective labor agreement, and/or current legislation.

Working time also includes periods when the employee is at the disposal of the employer, even if not actively working. This approach is justified because, during such periods, the employee does not have control over their time, and the work can be resumed at any moment if the employer requires.

The normal duration of working time for a full-time schedule is 8 hours per day and 40 hours per week. Individuals aged up to 18 years can work only 6 hours per day and 30 hours per week.

Working hours are typically distributed according to the standard 8 am – 5 pm or 9 am – 6 pm, including breaks, unlike freelancers that can organize their schedule.. Of course, working hours may also be unevenly distributed based on the nature of the work and the organization. The maximum duration of working time prescribed by law is 48 hours per week, including overtime.

The individual employment contract must specify the normal duration of work, expressed in hours per day and/or hours per week. In addition to this, the individual employment contract should outline the conditions for performing and compensating or paying overtime hours, and, if applicable, the methods of organizing work in shifts.

An employment contract template should contain the job description

The contract should determine the employee's occupation according to the Classification of Occupations in Romania (COR) or other applicable regulations.

As an annex to the individual employment contract, attach the job description. The job description is a very useful tool, prepared by the employer or the recruiting company, outlining the duties and rights of an employee at their future workplace. Don't stop here: the job description should also include job requirements, tasks the employee will perform, the method of performance, and provisions regarding reporting to hierarchical superiors.

It serves as an annex to the individual employment contract to streamline logistics, yet the job description is equally important. The professional evaluation of the employee will be based on its content, and in case of conflicts or misunderstandings between the parties, the job description serves as evidence in court.

An employment contract template should contain provisions on electronic signature procedures

Of course, the use of an electronic signature is optional. The employer cannot compel the employee to use an advanced or qualified electronic signature for the conclusion, modification, suspension, or termination of the individual employment contract.

However, if both parties agree, the employer can provide advanced or qualified electronic signatures to employees for signing documents related to labor relations or those concerning workplace safety and health.

Ensure that, during various events that may occur during the course of employment relations (conclusion, modification, suspension, termination of the individual employment contract), both parties must use the same type of signature – either handwritten or electronic.

An employment contract template should contain provisions on annual leave

We all know that each employee has a guaranteed right to annual leave, in addition to legal days off or those for special family events. Annual leave is paid, taken annually, and has a duration of at least 20 days. If days off are taken intermittently (for example, 3 days in one month, 3 days in another), the law requires the employer to plan it so that each employee has at least ten consecutive days of uninterrupted leave.

Annual leave cannot be legally limited or refused by the employer, while the employee cannot waive or transfer the days off guaranteed by law. Of course, this does not mean that the employer is obligated to approve leave requests every time; rather, any potential refusal must be based on objective justifications. Provisions regarding annual leave and the method of granting it also exist in the internal regulations applicable to the unit.

Through the individual employment contract, the employer and the employee can establish conditions more favorable than those provided by law (for example, granting a greater number of workdays), as well as the specific conditions under which annual leave is approved.

Also, it is worth noticing that:

• legal holidays as well as other days off granted in special emergency cases, are not included in the duration of annual leave.

• annual leave can be interrupted in cases provided by law, which implies its continuation after the interruption reason disappears.

• leave days are calculated for periods of temporary incapacity for work (maternity leave, maternal risk, paternity leave, care for a sick child).

• annual leave must be compensated like any regular working day.

Records

Pay attention not only of what the individual employment contract should contain but also what to do with it.

A copy of the individual employment contract must be provided by the employer to the employee before the start of the employment relationship. The new employee should be requested to sign for the receipt of their copy.

The individual employment contract is registered in the general register of employee records before the new recruited employee commences activities. No later than the day before the start of activities, it is transmitted to the territorial labor inspectorate.

A copy of the individual employment contract must be kept at the workplace for employees working in that location.

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Well-written individual employment contracts are crucial for employers to ensure legal compliance and maintain a positive workplace environment. If you haven't already, now is the time to consult with a specialist to gather insights on the changes you should consider implementing.

It provides a structured framework that helps employers navigate the complexities of the employer-employee relationship while fostering a fair and productive work environment, as well as to mitigating the risk of legal disputes and financial liabilities, whenever misunderstandings with an employee might occur.