As HRD, you must know what types of employee work contracts are.

 

This type of employee work contract is used to adjust the type of work held by the employee.

 

As is known, when a company accepts new employees, the company will provide an employment contract as proof of the start of the work agreement.

 

Knowing what types of employee work contracts are will allow you to choose the right work contract for employees.

 

So what are these types of work contracts and how are work contracts made?

 

What is Meant by Employee Employment Contract?

 

An employment contract is an agreement issued during the hiring or renewal process that sets out the terms of the employment relationship between an employee and a company.

 

Typically, a contract is a written document that both the company and employee will sign as a sign of agreement.

 

Contracts usually detail the rights and responsibilities of both parties, and organizations or companies often use them to help all parties involved understand their obligations during the new employee's employment.

 

Here are some things that might be outlined in a contract:

 

- Salary information

 

- Work duration

 

- Work schedule

 

- Health insurance or BPJS Kesehatan

 

- BPJS Ketenagakerjaan

 

- Leave and permit policies

 

- Pension plan

 

- Employee protection

 

- Limitations

 

- Conflict resolution protocol

 

In general, a contract is a special document drafted by a legal professional to outline the binding details of an employment agreement where these details include the start date of employment and the terms for ending it.

 

However, in some situations, employment agreements are made unwritten and this is usually given for types of jobs that are permanent in nature.

 

How are Employee Employment Contracts Made?

 

Contracts can be offered in a variety of forms, depending on how the company and employee reach an agreement.

 

While many people think of contracts as documents that must be signed and processed, this is not always the case—contracts can also be offered through conversation or implied messages.

 

Here are the three most common forms used to offer contracts:

 

• Written Contract

 

A written contract is one of the most common forms of employment contract.

 

A written contract outlines the specific details of your employment relationship, including salary, schedule, length of employment, leave policies, benefits, and more.

 

Written contracts are popular because they provide a complete and legal document of the employment agreement that is explicitly signed by both the employer and employee.

 

This means that if any discrepancies arise during your employment, you can go back to your contract to reread and clarify any questions or concerns that arise.

 

• Oral Contract

 

An oral contract is an unwritten employment agreement.

 

Often, oral contracts are developed during a discussion about the specifics of your employment relationship.

 

A hiring manager may verbally offer an employee a position with salary, benefits, and other terms.

 

If the employee agrees to these terms verbally, this discussion can constitute a valid employment contract, especially if there are other witnesses present to attest to the agreement made.

 

However, oral contracts can be difficult to enforce, as there is usually no accompanying written document that sets forth specific terms.

 

• Implied Contract

 

An implied contract is an unwritten, non-verbal agreement of employment.

 

Typically, an implied contract is used in the absence of an oral or written contract.

 

If an employee and a company do not agree to certain terms through discussion or by signing a document, but the employee still begins working for them in some capacity, the company may have an implied contract.

 

An implied contract allows the employee to assume that the employer will provide the same rights, protections, and benefits as those previously established by the employer’s actions or guidelines.

 

For example, if the employer does not explicitly state how long an employee will be employed, but has previously stated in a general context that most employees stay in their positions for one year, then the employee is implied to be employed for one year.

 

Like oral contracts, implied contracts can be difficult to enforce, but they can be legal agreements in some contexts.

 

What are the Types of Employee Employment Contracts?

 

The type of employee contract is determined by various factors, such as employee status, organizational needs, and type of work.

 

Here are 8 types of employee work contracts that companies can choose from:
 

Specific Time Employment Agreement (PKWT)

 

Fixed-term contracts or known as Fixed-Term Employment Agreements (PKWT) are very specific and written contracts given to employees who only work for a certain period of time or until they complete a certain task.

 

Fixed-term contracts are employment agreements intended for employees who work for a certain period of time or temporarily until the job is completed.

 

Fixed-term employees often receive the same benefits and protections as other full-time or part-time employees during their employment, which can be detailed in the contract.

 

Specific Time Work Agreement

 

PKWTT is an employment contract offered to employees who work for an indefinite period of time or are called permanent employees.

 

This contract usually includes information about benefits, paid holidays, vacation time, sick time, and also about pension benefits.

 

Furthermore, some full-time contracts provide new employees with the opportunity to get other benefits, such as professional development opportunities or facilities in the workplace.

 

Part-time Contract

 

Part-time contracts are offered to employees who work fewer hours than full-time employees.

 

Typically, part-time contracts are offered to those who work less than 35 hours per week and often include some of the same provisions and protections as full-time contracts.

 

Many part-time contracts detail the employee’s flexibility, weekly schedule, and pay rate.

 

However, it’s important to note that part-time contracts typically do not include information about insurance, salary, or PTO—all benefits that are typically provided to full-time employees.

 

Zero-hours Contract

 

Zero-hour contracts are offered to employees who work irregularly or only when work is available.

 

In a zero-hour agreement, the employer agrees, in writing or orally, that they will offer work when it is available, and the employee agrees to work those shifts or remain available for availability purposes.

 

A zero-hour contract usually stipulates that an employee will work a minimum number of hours or shifts per month.

 

This number is set by the employer in most cases and that the employee has the right to refuse any work assignment that may not be suitable.

 

Zero-hour contracts are often used to employ temporary employees, such as casual workers or nannies.

 

Unlike full-time and part-time contracts, zero-hour contracts do not include information about standard pay rates, regular scheduling or benefits, as zero-hour employees are not usually offered such protections.

 

Freelance Contract

 

Freelance contracts are typically offered to employees who are hired to complete a specific project, such as designing a website, writing articles, taking photographs, or remodeling a home.

 

Freelance contracts outline work hours, project details, salary, and payment terms.

 

These contracts protect freelancers from delays in payment or from project-related challenges that may arise.

 

Freelance contracts don’t often include information about benefits like insurance or PTO, since freelancers are typically considered self-employed and sometimes even full-time.

 

Daily Freelance Contract

 

Casual contracts are usually given to employees who work on a seasonal or temporary basis.

 

With a casual contract, employers usually make it clear that they will only pay employees for work that has been completed and that the company is not required to provide a minimum number of shifts or hours.

 

In addition, such contracts sometimes state that employees are not required to take the shifts or hours offered, casual contracts offer flexibility to both employees and employers in their agreement.

 

However, these contracts are usually only used to define a short-term employment relationship that may or may not be extended after the employment period ends.

 

Exclusive Contract

 

When companies hire high-profile executives for senior management positions, they often extend executive contracts.

 

These contracts, similar to full-time employment contracts, detail all of the traditional benefits, protections, and perks afforded to executive employees, but may also include special incentive offers that can attract high-quality candidates.

 

These incentives can include things listed in the contract such as high salaries, severance packages, and perks like company cars.

 

Executive contracts also often have very specific clauses regarding confidentiality and prohibitions on working for competitors.

 

Outsourching

 

Outsourcing is a type of employment contract that uses labor from a third party.

 

For outsourcing employment contracts, the employment agreement occurs between the labor provider and the worker which is made in the form of PKWT or PKWTT which must contain Transfer of Protection Employment.

 

Transfer of Protection Employment is the principle used for the transfer of protection for workers.

 

Conclusion

 

That was the explanation of the types of employee work contracts that can be your reference in making work agreements between companies and employees. 

 

From the explanation of the article above, it can be seen that there are 8 types of employee work contracts that will regulate the work relationship between the company and employees. 

 

In general, companies usually use PKWT or PKWTT to make work agreements with employees. 

 

The selection of PKWT or PKWTT is adjusted to the type of work given, whether permanent work or non-permanent work. 

 

To support work relationships with employees, make sure you manage employees properly and correctly.