Here are some useful components to consider when preparing employment contracts:
- The parties i.e. state the proper names of the employer and employee and other relevant particulars for e.g. addresses of the parties.
- Nature of the Employment Contract – state whether it’s a Fixed Term or Permanent Contract and that it is a Contract of Service (which differs from and is not to be confused with a Contract for Services).
- The Term – If it is a fixed term contract, state the start or effective date of employment, duration of the employment term (and the contract end date). State whether the contract term is subject to renewal (upon review). If it’s a contract for permanent employment, state the start or effective date of employment.
- State the employee’s job title, the department/division under which the employee’s job falls and possibly include the key reporting lines which concern the employee.
- State the work location and working arrangements – For a geographically dispersed organisation, it may be useful to state which location the employee will be working from and also include that there may be the possibility for relocation to other branches. If Work-From-Home or a hybrid arrangement applies to the employee; you may want to state certain particulars in relation to this.
- State the salary and any applicable benefits, allowances and perks. State the pay period and method of payment.
- State the relevant statutory contributions that will be deducted from the employee’s remuneration. In Trinidad & Tobago the statutory deductions that are generally relevant to employees are Income Tax/Pay as You Earn – P.A.Y.E (above a certain income level), National Insurance and Health Surcharge.
Employers usually deduct/withhold the relevant statutory contributions that an employee is supposed to pay to the relevant statutory authorities and remits these on behalf of the employee. (An independent contractor or someone engaged via a contract for services would usually be responsible for the payment of the statutory deductions applicable to them. More on this in a subsequent post.)
An employee can monitor an employer’s remittance of national insurance contributions by requesting the employee’s Contribution Statement from the National Insurance Board. This is important to monitor as a certain number of national insurance contributions are important for a person to be able to enjoy certain benefits that the National Insurance Board of Trinidad & Tobago has to offer.
- State any other deductions that would be made from the employee’s remuneration (due to the requirement of some employee contribution to the particular benefit) e.g. insurance, pension etc. State the relevant ratio or percentage of contribution that is applicable to the employee and the employer.
- Normal hours of work and related break times e.g. time and length of lunch/ meal breaks or any other breaks that are allowed.
For more information see: On Line Request for Contribution Statement (nibtt.net)