These potential red flags deserve your fullest attention.
For most people when offered a new job, signing the employment contract is something of a fait accompli, a mere formality to ensure all legal ducks are in a row and all the i’s dotted and t’s crossed. In fact over three quarters of new employees regularly sign a new employment without even reading any of it. New job… a regular salary… sign on the dotted line… what’s the problem?
But, in a word… DON’T!
Once you sign that contract, every stipulation in it you thus are legally bound to insofar as it is specified in that contract. Many companies will slip in clauses knowing full well that almost no-one reads it only for the employee to realize what it entails later on. History is rife with horror stories concerning contractual obligations coming back to bite in a major way, and all because that contract was not thoroughly perused and analyzed prior to signification.
A second look now can prevent a first-rate legal and potentially financial problem later.
For this article, we’ve consulted experts on contractual law and their advice has formed the basis of the 4 points you should watch out for when signing up for a new job.
1. Non-Compete Clause
What these do is, subject to the individual specification in the contract, effectively prevent you from joining a rival company to your ex-employer for a determined period of time after you leave the latter.
While they are common, they are rarely enforced because there are often legal nuances to the stipulation, such as only coming into effect if the employee is fired for various specified reasons or leaves voluntarily before a particular contracted time has lapsed.
Nonetheless, be very certain that you read any such clause in your contract and don’t sign anything until you have, if necessary, receive legal advice on it.
2. Corporate Discretion
This is a highly vague and somewhat nebulous term in contracts often phrased such as “… at the company’s sole discretion…”. What this means, in effect, is a legally binding get-out-of-jail-free card for said company in that your bosses promise to potentially do something for you but are under no legal justiciable obligation to definitely do it.
New employees are strongly advised to look for clauses and terms in their contract that give no firm commitment on matters not performance-related such as bonuses, that seem to hinge everything on the good graces of the company, and give no concrete specified conditions for such matters.
3. Severance
In the event of your employment coming to an end with a company, there are always conditions attached in the initial contract concerning terms for severance payments such as backdated salary, potential bonuses, continued healthcare benefits for a specified time thereafter, etc.
The corporate opt-out for these conditions are usually owing to termination of employment because of “cause”, meaning you did something illegal and/or immoral that risks damaging the good name and reputation of the company and you’ve been fired because of your actions.
Be very wary of contracts that link “cause” to vague performance expectations and especially be extremely cautious of the company asking you to sign an additional waiver stipulating extra conditions to your leaving the company and/or absolving the company of all legal obligations in the event thereof in order to receive your severance package, thus rendering you unable to sue them even if you feel it justified. Resist this latter move at all costs as it is legally questionable unless you actually sign it.
4. Repayments
Over the course of employment with a company, you may have to incur job-related expenses for which you either bill the company for later or are granted the ability to pay for these expenses as you go.
When looking over a potential new employment contract to sign, make sure you fully understand the terms and conditions of any potential repayments for expenses in service to that company. If you’re unsure, ask questions, and if still not satisfied then seek legal advice.
If you see a clause in your contract regarding something known as a TRA (Training Repayment Agreement), be very careful as this stipulates that if you leave a company before a set period of time, you will be liable for the onboarding and training costs spent by said company when you were initially hired. In such a scenario, insist on specific conditions to this clause wherein it will not affect you unless you leave voluntarily or are fired for cause.
Getting a new job is a wonderful feeling, a feeling of hope, optimism for the future, a new adventure just beginning. But be certain that the contract you sign for that dream job will not end up becoming a living nightmare because you didn’t read the contract to begin with.
