Understanding Employment Contracts Before Signing

Restrictive covenants

Non-compete clauses restrict working for competitors for a period after leaving. Non-solicitation clauses restrict approaching clients or colleagues.

Enforceability varies considerably by jurisdiction. Courts commonly require restrictions to be no wider than necessary to protect a legitimate business interest, and overly broad clauses may be unenforceable.

Several jurisdictions have moved to restrict or ban non-competes for lower-paid roles, and the position continues to develop.

The practical point is that even an unenforceable clause can deter a prospective employer who does not want the argument. Read the scope — duration, geography and activities — and negotiate it before signing rather than after.

Notice periods

Check both directions. Long notice from you constrains your ability to accept a role starting sooner; short notice from the employer reduces your security.

Garden leave provisions allow the employer to require you not to work during notice while remaining employed and paid, which prevents you starting elsewhere.

Payment in lieu of notice clauses give the employer the option to end employment immediately with a payment, which affects the tax treatment of any exit.

Variation clauses

Clauses allowing the employer to vary terms unilaterally are common. Their effectiveness is limited in many jurisdictions, and they signal how the organisation approaches change.

Mobility clauses requiring relocation, and flexibility clauses allowing changes to duties, are worth reading if either would be genuinely disruptive.

Intellectual property and confidentiality

IP clauses commonly assign to the employer anything created in the course of employment, and sometimes reach further.

If you have existing projects or intend to work on anything outside employment, check whether the clause captures it, and carve out anything pre-existing explicitly.

Confidentiality obligations typically survive termination indefinitely, which is normal.

Other terms worth checking

Repayment clauses for training, relocation or signing bonuses, specifying the period and whether repayment is on a sliding scale.

Bonus terms: whether discretionary or contractual, and whether you must be employed and not under notice on the payment date, which is common and frequently costs people money.

Sick pay above the statutory minimum, and how it accrues with service.

Working time arrangements and any opt-out from maximum hours provisions.

Practical approach

Ask for the contract before accepting verbally, and take time to read it.

Negotiate specific clauses rather than objecting generally. Employers frequently amend restrictive covenants and notice periods when asked reasonably.

For senior roles or anything with substantial restrictions, take legal advice before signing. It costs a modest sum against the consequences.