employment contract

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Related to Terms and conditions of employment: Contract of employment

employment contract

see CONTRACT OF EMPLOYMENT.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

employment contract

a CONTRACT between an EMPLOYEE and the company for which he or she works, specifying the terms and conditions governing his or her employment. Employment contracts of directors and senior executives are called service contracts, and these often contain provision for generous severance payments in the event of early dismissal.

The employment or labour contract between an employee and the firm that employs him or her generally specifies that the employee undertakes specific tasks for the firm in return for a WAGE. While the wage paid to an employee is a clearly definable part of the labour contract, the level of skill exercised by an employee and the amount of effort he or she exerts in working is more difficult to specify and measure. Consequently, labour contracts are subject to possible contract problems, such as ADVERSE SELECTION and MORAL HAZARD, and may involve significant AGENCY COSTS.

See LABOUR MARKET.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
While the Fair Employment and Housing Act, on which this case was based, generally governs in California, the federal Age Discrimination in Employment Act prohibits discrimination against workers between the ages of 40 and 65, including discrimination in terms and conditions of employment.
Q When a new owner takes over a business, can he/she change an employee's terms and conditions of employment?
The key question is whether there was a direct link between any change to the employee's terms and conditions of employment and the transfer of the business to a new owner.