Salary increases awarded as a result of performance reviews represent a good opportunity for employers to improve their employment contracts with employees.
Some employees may have no employment contracts in place, whilst others may have signed a letter of appointment when they commenced employment a number of years ago (having since performed multiple roles). Some employees may simply have out dated or deficient contracts.
Common deficiencies in employment contracts include:
- notice of termination is not dealt with or is dealt with inappropriately
- there are no post-employment restraints or alternatively, the current restraints are not enforceable
- the contract does not sufficiently protect the employer's confidential information and intellectual property
- bonus or incentive schemes are poorly documented
- the contract inappropriately incorporates other documents into the contract, such as policies.
An increase in an employee's salary provides legal "consideration" for the introduction of new employment contracts, which should be drafted as "continuing contracts" which supersede and replace current contracts.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.