Contracts Are Important for Employers and Employees Alike
Employment contracts contain a lot of important information for employers and employees. However, many employees sign these documents without reading them thoroughly. One study on the topic also found that a surprising number of people breached their contracts in some way, many knowingly and intentionally.
- 56% of Baby Boomers in the survey said they had breached an employment contract
- 50% of Millennials said they had done so
- 80% of Gen Z respondents admitted to breaching a contract, with over 90% who did so saying they did it intentionally
With these facts in mind, you can see how important it is to create quality employment contracts for your business. It may also be a good idea to ensure your employees do read their contracts fully and understand the terms and conditions therein, as this can minimize misunderstandings in the future—including once the contract is terminated.
Georgia Is an Employment-at-Will State
One reason employment contracts with termination clauses can be important to employers and employees is that in Georgia, employment is at will. Employers can fire someone in many cases without providing any reason for doing so. Employees can leave their jobs at any time without giving notice.
These facts can create major inconveniences on both sides. Obviously, if an employer fires someone without giving a reason, it may come as a surprise to the employee and create some financial and career stress.
But as an employer, you also don’t usually want staff quitting suddenly and without notice. It can leave you short-staffed, making it hard or even impossible to meet your production, customer service, or sales goals.
Two Exceptions to Employment-at-Will Rules
Employment-at-will provisions don’t cover every employment termination in Georgia, though. There are two specific cases where employers can’t fire someone at will.
First, employers in Georgia, as in other states, can’t let employees go due to an illegal reason, such as discrimination. If an employee can show that you or someone working for your company let them go or caused their firing due to national origin, sex, religion, or race, for example, you could end up with a discrimination lawsuit on your hands.
Second, employers can’t fire someone at will without cause if that type of termination is prohibited by an employment contract. Similarly, employees may not be able to leave their jobs without notice without breaching their contract if it requires notice.
What Should Your Termination Clauses Include?
A detailed termination clause protects your company. It also provides some protection for your employees, which can be good for your business brand. Employees who see they are protected in your contracts know you care about their well-being and rights, which is a good place to start if you want to foster trust, positive work culture, and good employee morale.
Grounds for Termination
This is, perhaps, the meat of this clause in any employment contract. If you guarantee employment to an employee for a specific period, then you should spell out the grounds for termination that are allowed under the contract. Common grounds to include are breach of contract, nonperformance, or a change in the market or other circumstances that make it financially unreasonable to continue to employ the individual.
The grounds for termination you include in your employment contracts should not be limited to these reasons, though. Consider the nature of the work you are hiring someone to do, your company’s goals, and other factors in deciding what to include.
Requirements for Notice
Termination can be initiated by employers or employees, but it’s often good for both parties if there is some type of notice. Create requirements for notice in different types of cases in your contract. While you may want to ensure the contract is fair and reasonable for an employee, make sure to leave yourself room as the employer to deal with bad actors in your employment quickly.
Severance pay is not required by law, but employers can choose to offer it as a benefit to employees. If you do offer severance pay, spell it out in your contracts. Include:
How severance pay will be calculated and paid
When severance pay is due and how long employees receive it following the termination of a contract
When severance pay might not be paid
Dispute Resolution Options
You might include this specifically in your termination clause or as a general clause relating to the entire employment contract. By requiring employees to agree to go through mediation and/or arbitration if there is a dispute about the contract, you can potentially save your business time and money in court and legal costs.
The Rights of Employers and Employees Who Sign an Employment Contract
Both parties signing an employment contract have rights spelled out in the contract. They also have the right to hold the other party accountable if they breach the contract. The strength of these rights and how easy they are to enforce depends in part on the language and quality of your contract.
Work With InPrime Legal on Your Employment Contracts
Working with an experienced business law team on your employment contracts can help you protect your business while providing meaningful agreements and benefits for your employees. Call InPrime Legal today at 770-828-8967 to find out more about our business law services, including Contract Sprint.