personal contract

personal contract

a CONTRACT OF EMPLOYMENT which is determined solely by the employer and employee, and covers only that one employee. Many of the collective agreements underlying the terms of employment contracts, such as standardized conditions of employment reached by agreement by employer and trade unions, are explicitly excluded. The main purpose of most personal contracts is to take employees' pay out of the ambit of COLLECTIVE BARGAINING and to remove or limit employees' rights to representation by a trade union, thereby weakening trade unions. Instead an employee's pay is determined on a personal basis between employer and employee. For this reason personal contracts are often introduced alongside PERFORMANCE-RELATED PAY. Personal contracts often appear attractive to employees because it is common for substantial cash inducements to be given to encourage employees to sign them and because they appear to be more personalized than previous contracts. In practice most personal contracts are standardized with employees given little opportunity to negotiate over the contract's terms. Furthermore, most give greater discretion to employers than those they are replacing.