Employment contracts: What are they good for?

Dear Bloggers,

The company I work for decided to place all the temps under one temps office instead of three also the ones on payroll are swapped. It is all about money of course So guess who will be ....... We’re on a simplification kick at this moment as our dear managers want to have a better overview. As they grow, they’re trying to simplify their jobs even more. (earn the same money with doing less.) Growth generally brings complexity, but let us see if we can go in the other direction with this bunch. There are more clowns at this circus as I thought.

Questioning assumptions

Simplification usually starts with questioning assumptions. Why do they do this? Why do we need this? Is this really necessary? Is it just inertia? Are they doing it because that’s how they’ve always done it or are they doing it because it’s better? Are they just following conventional wisdom or is there newer wisdom and we should be considering?

Why do we need employment contracts?

One of the things I am beginning to question are employment contracts. When a new employee starts with a temps office, they will make them sign a employment contract. The contract was drawn up by a bunch of bloodsucking lawyers and is corrected every so many years by them, so there are no incremental costs each time they bring on a new employee, but is that good enough reason to keep this going?

The contract itself is about five pages. It outlines some basic responsibilities they have to the employee and the employee has to the company. Starting salary, an overview of benefits, vacation time, confidentiality, and general expectations on both sides. But that’s really only a paragraph or two. Everything else is legal-cover-your-ass-speak. 

Like most contracts, it’s basically a big “I don’t trust you and you don’t trust me” document. What a terrible way to welcome someone to the team isn’t it?
How often are these things actually enforced in a business like the one I am working for? And if people aren’t really enforcing them, why are we writing/signing them anyway? “Just in case” feels like a pretty weak argument to go through all the cost, trouble, and rigamarole. Is “Imagine if someone…” enough reason to have the first step we take with a new team member covered in legal mud? 

No it is this bloody law that we have that was only made to protect the employee. But now they are abusing this law by kicking you out after 3½ years. And after half a year you can return and start a t scratch. Hooray for the Dutch law it is far too complicated even for lawyers.

What if it would become a handshake company?

So I’ve been thinking… What if we could kick away all these employment contracts entirely? What if they became a handshake company? Plenty of small companies work this way, why can’t we? Aside from each person’s salary, we could post all our responsibilities and their responsibilities on the web. So everyone has the same work conditions and only a minimum of hours is stated and of course you agree to at least half a year of employment with them. 

Maybe it is time to change the law and let the unions make up the agreement so for both parties things will be square and fair. They could make a ”/workinghere” page at their own website that clearly lays out what employees can expect from the company and what the company expects from the employees. So if you cannot live up to the standards there is no need to send in your application or to work here at all. It could be build on a easy to hire, easy to fire base. It could be a living document too. Things change, benefits change, rules change. That’s just how it goes. Especially in these hard times of economic downturn we need to be creative. 

You read it, we shake hands, and we start working together. In the event that it doesn’t work out, we ask you to leave or you quit. Of course there should be terms of conditions about it. (Something like 7 or 14 days to resign or being signed off for both parties in the first year, a month after two years and so on.) There should be a maximum on it of three months. 

And the company has to help you to find something else if they need to lay you off  due to economical hard times or retrenchments made by third parties that need to cut back. That’s how it is anyway employment in the Netherlands and the rest of Europe is at-will. Every employment contract I’ve seen includes a line about at-will employment. So what are the dozens of other paragraphs really for?

In this day and age it seems crazy to even consider ditching employment contracts, but why? Why have we become so dependent on lawyers to control every relationship inside our companies? Why is “just in case” the default answer when asking questions about contracts? It sounds more like insurance than legal counsel. 

And the hardly anyone is having a heart for the company anymore. The world of employers should be more transparant new innovative products should be more often used as the costs for sick personel are sky high.  Why carry cash when you can pay with your phone our buy a prepaid ticket there is no need anymore for physical tickets. If you are being mugged you are traumatized for the rest of your life.

What’s your experience?

What are your experiences with employment contracts? If you own a business, do you require employment contracts? If you are an employee somewhere, have you signed a contract? Has anyone here ever had to actually sue or litigate an issue specifically related to an employment contract? If you’re an employee, do you feel more or less comfortable joining a company that makes you sign a legal contract? Did you have your contract checked by a union. Does anyone feel good about signing these things? I don’t but what is your opninion?


I would love to hear everyone’s thoughts about this subject.

The Old Sailor,


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