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Employment contract with standard terms

  • A standard term is a term previously developed for use in standard contracts or a term that has not been separately negotiated by the parties for any
  • The employment contract allows the use of standard terms.
  • A standard term is void if it causes unreasonable harm to the other party.

There is no standard employment contract that is suitable for concluding every employment relationship. A standard term is a contract term that has been previously developed for use in standard contracts or which has not been separately negotiated by the parties for other reasons and which the party using the standard term (condition user) uses against another party who is therefore unable to influence the content of the term (subsection 35 (1) of the Law of Obligations Act).

The Supreme Court has also found (judgments No. 3-2-1-39-11 and 3-2-1-6-08) that the use of standard terms and conditions is permitted in an employment contract. The validity of standard terms and conditions must be assessed on the grounds of section 42 of the Law of Obligations Act, according to which a standard term is void in the case where it is unreasonably prejudicial to the other party considering the nature, content, manner of conclusion, interests of the parties to the agreement and other significant circumstances, especially if the standard term results in a balance of rights and obligations arising from the contract which is detrimental to the contracting party. Unreasonable damage is presumed if the standard term deviates from an essential principle of law or if the standard term restricts the rights and obligations arising from the nature of the contract of the other party in such a way that the achievement of the purpose of the contract becomes questionable. The voidness of the standard term and the related circumstances are assessed as of the time of concluding the contract.

In any employment relationship, it is important for the employer to set the conditions related to the performance of a specific job and, in turn, for the employee to thoroughly consider their expectations towards the employer. However, this does not mean that the employer cannot prepare contractual clauses with the same content for employees performing similar tasks in similar conditions. In many companies with a large number of employees performing the same tasks, this may even be expected behaviour, as it ensures equal treatment of employees.

The employee and the employer may negotiate each clause of the employment contract, even if it is presented as a so-called standard clause. Each person's employment relationship is individual and, based on the principle of freedom of contract, not all employees have to work under the same conditions – for some it is important to work in the evenings, others want to work from home, etc. The employer's argument that one form of contract is available to all employees in the institution is irrelevant – the employment relationship is individual and must take into account the needs of the parties.

Using an employment contract that is not tailored to the needs of the organisation can be directly detrimental. For example, an employment agreement is concluded with a new employee, with the agreement draft found on the Internet, its contents not thoroughly considered and without any major changes made to it, or agreements are made with people performing very different tasks in the company using the same contract draft. Thus, points which are not justified for the employee and which may also be detrimental from the employer's point of view may be present in the agreement.

For example, an agreement on prohibition on competition may be justified in the case of a senior specialist in an institution, but not in the case of the chief of staff or a guard, and the inclusion of a proprietary liability clause implies an obligation on the employer to pay additional compensation to the employee.

It is also important for the employer to take into account that the clauses of the contract which are harmful to the employee are void pursuant to section 2 of the Employment Contracts Act and may lead to disputes. For example, if an employment contract contains a term that for some reason has not been separately negotiated with the other party to the contract or the content of which has not been influenced by the other party and imposes unreasonable obligations or restrictions on the employee, it may not have legal force.

If the employee finds insignificant points in the contract, these should be brought to the employer's attention and removed by agreement. The employer's interest could be similar, as unreasonable points do not provide the desired protection.

In conclusion, the employer can find a draft employment contract with the help of an Internet search engine, but the agreement must be thought through and discussed with the employee. It is the employer's responsibility to clarify the terms of the contract and it is in the employee's interest to ask for them and make their own proposals.