MEANING OF EMPLOYMENT CONTRACT

Contract of employment is defined as an employment agreement voluntarily entered into by the

employer and employee who stipulates and defines the conditions of employment. Most

contracts of employment are in written form which makes it applicable and governed to the

general law of contract. This then means that every contract of employment should be binding on

both parties as well as valid. It then means that for the contract of employment to be binding just

as a general law of contract, there should be an offer, an acceptance and a furnished

consideration.

THERE ARE THREE TYPES OF CONTRACT UNDER WHICH YOU CAN EMPLOY

SOMEONE;

A contract for unspecified period of time

This is also known as permanent contract, for this type of contract the duration of employment is

unspecified. (Not provided for).

Contract for specified period of time

This is the type of contract that duration is specified. This means this type of contract if it expires

then the contract comes to an end automatically. A contract for specified period of time could be

of duration of one month, three month, one year, two years etc

Contract for a specified task

This is of kind of contract in which a person is employed to perform a specific task. Once the

task is completed then that contract comes to an end. For example, it could be that a person is

employed to offload crates of soda from a truck and once that task has been completed then the

contract ends.

THERE ARE SOME INSTRUMENTS USED TO CHECK WHETHER SOMEONE IS

THE EMPLOYEE OR CONTRACTOR TO THE ORGANIZATION AND THESE ARE

THE FOLLOWING;

Control test is used to determine whether or not one is an employee

It says the more employer has more power on employee on how, when and where to do the job.

If this is true the one can be an employee if this do not apply it is taken as contract for

service where having contract during service and after service the contract is over this is

called relationship between principle and independent contractor

Second, the organization (integration) test; here the alleged employee must establish that the

work he or she did was an integral part of the business of the purported employer. This test is

vital where the employee's work is not subject to direct control of the employer, for instance

professional employees like Doctors et cetera.

Third, the Multiple (economic reality) test; under this test a number of factors are taken into

account such as payment of remuneration by way of wages or salary, prohibition on working for

competitors, supply of uniform and equipments, lack of personal business risk on the part of the

worker, work is done at the employer's, also it may be contended by the alleged employee that he

or she is economically dependent on the purported employer.

Fourth, the mutuality of obligation test; the alleged employee should establish to the

satisfaction of the court that there existed a legal obligation on both parties to provide work and

to do work respectively. Furthermore, the worker may establish that he or she worked for the

purported employer only.

NATURE OF EMPLOYMENT CONTRACT

Contract of employment like every other contract is an agreement between and employer and an

employee which describes and states the condition of employment. It is always advisable for one

to be sure of what the contract states before signing and accepting the contract as once signed it

is binding on both parties. A well prepared contract of employment is a statement of the capacity

in which the employee is employed, it covers and shows the name of the job, pay, allowances,

hours of work, holidays, leave, pension arrangements, and should refer to the relevant company

laws and policies as is applicable to the employee. In this case the offer is the written

employment letter which is accepted by the employee and the consideration being the wage the

employer is ready to pay the employee.

NATURE OF CONTRACT OF EMPLOYMENT COVERS THE FOLLOWING AREAS;

FEATURES OF A CONTRACT OF EMPLOYMENT AND CONTENT OF THE

CONTRACT OF EMPLOYMENT

Features of a Contract of Employment

When you are offered employment, the employer will often present you with a contract of

employment. This is especially necessary when the employment is short-term or non-permanent.

While each contract of employment will differ depending on the company involved, a legally

sound contract has some common features.

The Offer of Employment

The first part of an employment contract is a brief description of the employment being offered.

It should include the title of the employment, the purpose of the position and the brief

responsibilities expected by the new employee. This list is established by the employer rather

than collaborations with the employee.

Consideration

If items must be debated or bargained, such as the annual salary or working conditions for the

specific employee, the consideration section of the employment contract is where those details

will be worked out.

Legal Contract

The intention part of the contract is where the parties agree that the contract is legally binding. If

something should go wrong in the employment, this part of the contract allows both the

employer and the employee to bring the law into the equation for protection.

Certainty

The certainty section asks the employee if he has understood everything in the contract, in terms

of conditions or rules of the employment. For example, this section will ask the employee if he

understands that the payment is commission rather than an hourly wage. It is important that the

employee understands everything outlined in the contract, so this section helps protect the

employee from signing a contract with terms he does not fully understand.

Accepting Employment

A section must be included that specifies the employee has accepted the terms of the contract.

This section is usually divided into several sections, where the employee accepts the

responsibilities by initialing several sections of the contract. The acceptance also requires a date

and a signature by the new employee. When accepting the offer, the employee needs to indicate

that she accepts the offer on the terms and conditions put in place in the contract.

Performance

In reviewing performance requirements for insertion in the contract, consider establishing any

skills you would like upgraded during the term of the contract. Include production goals you

want realized and revenue enhancements you require. If a sales-based position, insert sales

volume expectations and recruitment of new clients. Incorporate any other performance

barometers you plan to measure and for which you will hold the new employee accountable.

Compensation

Any prospective employee expects an employment contract that defines compensation. When

you negotiate a salary and put the figures in the contract, specify a base wage and dictate the

method of payment -- salaried, hourly or commission. Commit your overtime authorization

policy to the contract. If the position involves commission payment, spell out the percentage;

how you handle draws against commissions; and how termination of employment affects any

pending contracts. If your company has an incentive program, clearly state its objectives. Include

how you handle expense accounts as well.

Benefits

Spell out your new employee's benefit package in the contract. Include any health, dental, vision

or other insurances you offer. Also, state any percentages of benefit premiums the employee has

to pay. If professional licenses, dues or memberships are necessary, make it clear in the contract

that pays for their acquisition and payment. Also cover other items such as holidays, vacations,

stock options, any profit sharing your company offers and retirement plans you provide for

employees.

Content of the contract of employment

A well written contract of employment should include all of the following;

Parties to the contract should be clearly stated: The name and contact address of the

employee who is being employed should be clearly stated as well as the name and address of the

employer.

Date of employment should be clearly stated: The resumption date of the employment should

be stated in the contract of employment. This will help in knowing when to start calculating the

employee’s entitlements.

Remuneration: The salary agreed on should be put down in writing. The scale or method of

calculating the remuneration should also be put down in writing. Also the interval of payment

should be written, either by weekly or monthly depending on the policy of the firm.

Terms and conditions of work relating to hours a day: The expected number of hours to be

put in by the employee per day should be clearly stated in the contract of employment.

Leave entitlements: The employees leave entitlement should be stated, number of days he is

entitled to, his leave allowance, other types of leave he may be entitled to (sick leave, casual etc).

Pension entitlements: The employee’s pension entitlements should be clearly stated if any.

The job title: The title of the job being offered should be stated. The job tasks as well should be

written.

Confirmation: The number of months or years as the case may be the employee will serve

successfully before his/her appointment will be confirmed should be stated.

Disengagement: The number of days or months notice required by either of the parties before

the contract will be terminated should be written as well.

PURPOSE OF EMPLOYMENT CONTRACT

Employee protection

The contract of employment protects employees every time when he/she is at work. The contract

has a power to safeguard an employee against any actions that can be done to him by the

employer which are against the agreement done by the two parties when they entered a contract.

Such a contract has a power to protect the worker against;

Unfair dismissal

The contract of employment must stipulate the actions that when an employee do, can lead him

to be dismissed. Grounds that may justify termination under the law include misconduct,

incapacity, incompatibility, and employees’ operational requirement. This part therefore protects

an employee against any unfair dismissal because the employer must have valid reason for

termination.

Redundancy and retrenchment

Redundancy is a termination based on reasons beyond the control of the employer or

unforeseeable by the employer. This means that no fault on the part of the employer. Procedures

for redundancy are provided for under S.38 of the employment and labor relations act read

together with rules 23 to 25 of the code of good practice rules, 2007. The employer should

observe the following prior to retrenchment;

Employer should give a notice to all employees

Carry a fair consultation procedure

Agree with the employee on the criteria for selection of employees to be retrenched

Provide statutory compensation to the retrenched employees

Employment contract therefore enable the employee to be protected when redundancy arise and

enable them to be compensated

Discrimination at work place

A contract of employment provides for the work to be done and the agreement upon how the

employee should be treated at work and therefore it protect the worker against discrimination at

work place.

Protect employer

Another purpose of the employment contract is to protect the employer against any actions that

an employee can do against the agreed terms that can substantially harm the customers or slow

down operations in the business. The contract protects the employer’s interest and guarantee that

employees will abide the agreed terms of the contracts. The contract guarantee the employer the

employee won’t suddenly decide to just abandon her responsibilities by walking off the job.

It is through the contract of employment that an employer can have confidence that the work

assigned to his employees will be done and if not he can claim for compensation. The contract

also ensures that the employee will perform the job as expected by the employers because

performance standard are a part of the agreement.

Provide evidence if breach has occur

A contract of employment acts as a platform where the legal rights and obligations of the

employer and employee are stipulated. Since a contract is a legally enforceable promise, the first

task if the breach has occurred is to identify the employer's promise. The promise, to be

enforceable, must be a real promise and a commitment. A contract therefore, It is the foundation

upon which the parties can rely on incase of any disagreements between the two parties. So if the

breach occurs one part can show the proof that it has been denied its right only by referring to the

contract of employment and review the terms agreed by both of them.

To help employees to have a collective agreement

Collective agreement or collective bargaining agreement is a special type of agreement between

management on behalf of the company and trade unions on behalf of employees. Contracts of

employment enable the employees to join trade unions and therefore enjoy the benefits of the

collective agreement such as security at workplace, duties to be assigned to and terms and

conditions that protect and benefit the employees.

To stipulate rights and obligations of employer and employee

A contract of employment saves the purpose of stipulating which is to be done by who and who

is supposed to do what and therefore it show the rights and obligations of both employer and

employee. Knowing what one is supposed to do helps to reduce conflicts at work and understand

the benefits that each of the part is entitled to, it is through the contact of employment that things

like amount of salary to be paid to the employee, method, and when the salary should be paid to

be employee, also obligations of the employee such as to work hard, and to abide all the terms of

the contract as agreed. This helps both parties, because it ensures that the employee knows which

activities are required and which are forbidden, thus rendering a serious breach less likely. So the

employment contract saves for such purpose.

Protect companies or employers from losing employees to competitors

A good employment contract will specify exactly what can result in termination of the

employment contract. As the contract specify the duration of work, it will provide confidence to

employer for not suddenly losing his vital employees to the competitors. Entering into a fixed

duration of employment contract will require the employee to work as per the agreed time before

deciding to shift to the competitor. Some of the terms of the contract may even restrict some of

the employees from working to the competitors even after retiring in order to prevent the

companies from losing out some trade secrets to the competitors

HISTORICAL DEVELOPMENT OF EMPLOYMENT CONTRACT

Labour as a factor of production i n the modem sense was unknown in traditional African

Societies and has developed s lowly under the aegis of the State. In African communities

labour was a personal service and was offered or withheld a t will. The institution o f

slavery and colonialism c h a n g e d all that. Under slavery free will shift from the labourer

(slave) to the owner of the labourer (slave master). When slavery was abolished in the

19th century the colonial State devised alternative methods of obtaining African labour.

In some instances Africans were expropriated o f their lands in order to create a landless

class, which would thereafter d e p e n d on wage employment. Sometimes outr ight force

was used. For example in Tanganyika, Chiefs invoked the Native Authority Ordinance o f

1923 to force their subjects to work on public works for pay or for free. In other instances

the introduction of tax to be paid in cash made African work in European owned

plantations. This situation reminds us of a statement made by Jack Waddis in his book The

Roots of Revolt that:

The history of A f r i c a n relations with t h e West has been a history of robbery,

robbery of African manpower, its minerals and its agricultural resources, and its land

After the partition of Africa at the Berlin Conference of 1884 - 1885, colonies were

formed and subsequently slavery was outlawed by 1910. The development of new

colonies required labour. So methods of getting labour were devised to develop

plantations a n d mines in the colonies.

The State through legislation crea ted a framework f o r recruitment o f labour.

The Germans began by creating Wage Labour and enacted the House and Poll Tax

Ordinance 1912, Hut and Poll Tax Ordinance No. 13 of 1922 together with Involuntary

Servitude (Abolition) Ordinance, No. 13 and House Tax Ordinance, No. 26 both of the

same year, whose main purpose was to create Taxation which in tum forced the Africans

to work in order to get money to pay taxes. In 1923 the Master and Native Servants

Ordinance No 32 (Cap. 78 of 1923) was enacted. Its main purpose was to facilitate and

regulate the procurement of labour for capital and repatriation. It made it mandatory for

employers to pay wages in cash only.

The Native Authority Ordinance 1926 legalised the communal labour tribal turnouts

and the tax defaulters The Master and Native Servants (Written Contracts) Ordinance

No. 28 of"1942 (Cap 79) came into force on 18/12/1942. It made it obligatory for certain

types of contracts involving natives to be reduced into writing. The Master and Native

Servants (Recruitment) Ordinance, N o . 6 of 1946 (Cap 80) came into force on 15/311946.

This Ordinance m a d e provisions for licensing of recruiters who were divided into two

categories: private recruiters and professional recruiters. Section 2 defined

recruiting as: any operations undertaken with the object of obtaining or supplying the

labour of natives who do not spontaneously offer their services at the places of

employment, or at an office established by Government, or by an employer’ s organisation

with the approval of the Labour Commissioner for the purpose of receiving applications

for employment, and recruit, recruiter and recruitment have corresponding meanings.

The distinguishing f e a t u r e s of the above pieces of legislation were the element of

involuntariness on the part of the native servant. Thus the notion of freedom of contract

was jettisoned and in its place a quasi-penal r e g i m e was introduced.

A dramatic change occurred in 1957 with the enactment of the Employment Ordinance,

Cap 366, which recognised that the contract of employment is a voluntary agreement

between the employer and the employee. The colonial State purported to conform to the

standards l a i d down by the International Labour Organisation ( ILO) on employee’s

welfare. Other laws passed in the 1950’s are the Factories Ordinance , Ca p 297, and

Workmen‘s Compensation Ordinance, Cap 263,Accidents and Occupational Diseases

(Notification) .Ordinance, Cap 381. Some of the above ordinances, a m e n d e d from time

to time, are still in force today. Section 2 of the Master and Native Servant (Recruitment)

Ordinance 1946 Cap 80

For six decades before independence Labour in Tanzania was available from the poorest

working class. This labour was employed m a i n l y in large Plantations; mines and small

manufacturing sector and it formed the permanent wage earning class. The management o f

Athis labour, was done through various legislation spanning from the 1922 Hut and Poll

Tax Ordinance t o the 1962 Trade Disputes Se t t l ement Act.

Since independence t h e Tanzania Government ha s actively legislated in order to manage

labour. The principal features of post- independence legislation are as follows:

State control of collective bargaining: Civil Service (Negotiating Machinery) Act, Cap

484, Local Government Services (Negotiating Machinery) Act, Cap 542, Local

Government Negotiating Machinery Act No. 11 of 1982, Permanent Labour Tribunal Act,

No. 41 of 1967.

Bureaucratic machinery for settlement of trade disputes; Civil Service (Negotiating

Machinery) Act, Cap484, Local Government Services (Negotiating Machinery) Act, Cap

542, Local Government Negotiating Machinery Act No. 11 of 1982, Permanent Labour

Tribunal Act, No. 41 of 1967.

Enactment o f the Disciplinary Code: Security of Employment Act, Cap 574.

Monolithic s t a t e sponsored trade unions: National Union of Tanganyika Workers Act,

No. 18 of 1964, Cap 555, Jumuiya ya Wafanyakazi w a Tanzania Act, No. 24 of 1979;

Organisation of Tanzania Trade Unions Act No. 20 of 1991

Establishment of the check-off system : Trade Unions Ordinance (Amendment) A c t ,

No. 51 of 1962.

Ouster of jurisdiction of ordinary courts with regard to the Disciplinary code and trade

disputes.

Conclusion

The introduction of employment law to Tanzania( formerly Tanganyika ) followed the

introduction of colonial economy which meant to overcome the developing countries decades old

position as exporters of raw materials and prepared these countries to be importers of consumer

and producer finished goods .The colonial government was not interested in developing

industries or strong working class but rather worked toward preservation of the existing mode of

production which involved peasant production with weak working class which would further

limit the developing countries to create self-sustaining economies which would require

considerable capital investment in machinery and other industrial inputs.

A good employment contract is beneficial to both the employee and the employer. It spells out

the rights and obligations of each party, protects the job security of the employee and protects the

employer from certain risks such as the release of confidential employer information after the

term of employment ends. Some jurisdictions require employment contracts for certain positions.

A good employment contract will specify exactly what offenses can result in termination of the

employee. This helps both parties, because it ensures that the employee knows which activities

are required and which are forbidden, thus rendering a serious breach less likely. The labor law

of the particular jurisdiction should be consulted to ensure that the terms of the contract do not

contradict legal requirements.

If the employee will have access to confidential company information, it is important from the

employer's point of view to include a clause preventing the employee from divulging this

information to others. An employer might also wish to prevent the employee from working for

competitors, although the labor laws of various jurisdictions differ on the acceptability of such a

clause. In both cases, non compete clauses are typically binding on the employee for a certain

period (perhaps two or three years) after the employment ends

The duties of both the employer and the employee should be clearly spelled out in the

employment contract. This section should include employee job duties, salary and benefits and

any overtime incentives. The employer's right to transfer the employee to another position should

also be included, although if this happens, the employment contract should be amended to reflect

the employee's new job duties.

REFERENCE

Anderman, S (2000) labor law, Management decisions and workers right, 4th edition, Dublin

London

Painter, w and holmes (2006) Cases and materials on employment law, 6 th edition, oxford new

York

Steven, D. (2000) labor law, Britain: Butlterx Publishing Company London

Urio , A and Urio, J. ( 2011) The law on employment and labor relations in Tanzania, Moshi

URT (2004). The employment and labor relations Act

MOSHI COOPERATIVE UNIVERSITY

(MoCU)

FACULTY: FBIS

PROGRAMME: MASTER OF BUSINESS MANAGEMENT

COURSE: LEGAL ASPECTS OF EMPLOYMENT, LABOUR RELATIONS

AND ETHICS

COURSE ANTE: MAL 657

INSTUCTOR: MSANGA (Professor R)

TASK: GROUP WORK

GROUP MEMBERS REG. No.

BERNARD J. MSUYA MBM/HD/138/15

ABDULAZIZ MOHAMED MBM/HD/134/15

AGNES S. MTOROBO MBM/HD/135/15

ALEX I. NYAGANGO MBM/HD/162/15

QUESTION:

Discuss the contact of employment in the light of meaning, nature purpose and historical development.