What to remember before signing a new employment contract

During the months of April to June, as summer approaches, employees are more likely than usual to decide to leave their jobs. In the fall, however, experts note that the situation changes – every year in September, people want to start the season productively, leading HR specialists and lawyers to be overwhelmed with numerous new employment contracts. What is important to remember before signing a new employment contract? What mistakes are most commonly made by employees and employers? What should you do if you notice an error in the contract after signing it?

“Before putting your signature on the employment contract, every clause should not only be read carefully but also thoroughly understood. If you have any doubts about any of them – whether you don’t understand what is stipulated or can’t fully agree with it – you must inform your future employer,” says Evelina Latyšovič, Head of Business Operations at the Lithuanian branch of the global HR solutions company “Manpower.”

Before signing the contract, specialists recommend checking if four key aspects are clearly addressed – workplace, job responsibilities, work schedule, and salary.

“These may seem like straightforward matters. However, in practice, there are curious situations, for example, when on the first day of work, the employee struggles to find the workplace because they confused the company’s operational address with its registered address in the contract. There are also cases where, after starting work, employees realize that the employer is asking them to perform tasks unrelated to their job title, such as delegating tasks or responsibilities of other colleagues, even though this was not stipulated in the contract. While such things should not happen, they do occur,” explains E. Latyšovič.

Lawyer J. Raudonytė from the law firm “COBALT” adds: “Another situation that may arise from not properly discussing job responsibilities is when, after starting work, it turns out that the employee does not have all the necessary permits or hasn’t completed special training. In such cases, the employer has to either invest in training the new employee, find someone to replace them temporarily, or part ways with the chosen specialist and start the recruitment process again.”

Salary Mysteries

According to E. Latyšovič, misunderstandings are also common regarding salary: “Candidates often confuse what is meant by ‘gross’ or ‘net’ salary in the contract, and when they receive their first paycheck, they are sometimes surprised – the amount is either much higher or lower than expected.”

Lawyers also confirm that issues can arise even with something as simple as agreeing on salary. They note that employees, before signing the contract, often get confused about whether the salary is stated before or after taxes, as well as about the bonuses or additional payments, their amounts, and the payment frequency indicated in the contract.

“It happens that an employer and employee agree on a bonus or additional payment, but the contract does not specify the payment conditions, amount, or frequency. These details might be outlined in another document, but it may also turn out that after starting work, the employer will not pay the bonus because the company’s performance was worse than expected,” says J. Raudonytė.

Unclear Work Schedule

Another common mistake is not clearly defining the work schedule. Currently, there are three types of schedules in the market – fixed, flexible, and individual. With a fixed schedule, the employer sets specific working hours, for example, from 8:00 AM to 5:00 PM. With a flexible schedule, the employer defines periods during which the employee can choose when to start and finish work. For example, work can start from 7:00 AM to 4:00 PM, 8:00 AM to 5:00 PM, or 9:00 AM to 6:00 PM. Employees working with an individual schedule agree personally with their employer on how to distribute their working hours.

“The most confusion and misunderstandings arise between flexible and individual schedules. For example, candidates reading in the contract that the employer offers a flexible schedule sometimes assume this means they can come and go whenever they please. This is not the case. A flexible schedule allows the employee to choose from the working periods offered by the employer, but not to set their own hours. Such freedom is only available to those working on an individual schedule,” says E. Latyšovič.

Growing Awareness – Is It Enough?

Lawyer J. Raudonytė observes a trend where employees, before signing an employment contract, increasingly seek legal consultation.

“Most often, those planning to take higher or managerial positions want to seek advice. They inquire about bonus or additional payment conditions, amounts, and frequency, confidentiality obligations, as well as non-compete agreement conditions and compensation, additional benefits, and work tools, such as the provision of a company car,” explains J. Raudonytė.

According to E. Latyšovič, despite candidates reading employment contracts more carefully, many aspects remain that employees do not even consider before signing.

“Non-compete and confidentiality agreements are just a few of the clauses that often confuse employees when they see them in the employer’s proposed contract. These clauses often impose restrictions on employees, and because they don’t know why the employer includes them in the contract, they may become worried or assume the employer is trying to deceive them. However, in most cases, there is no reason to worry. Once the unclear points are explained in plain language, often with the help of the employer or a lawyer, it becomes clear that the conditions are not as complicated as they initially appeared. Employees’ perspectives change, and there is room for mutual agreement,” says E. Latyšovič.

Rewinding Time

There are cases when even employees who have read the employment contract carefully wish they could rewind time to make a few changes, additions, or clarifications to the signed document. Unfortunately, experts say, this is not always easy to do.

“An employment contract can be amended by mutual agreement of both parties. Therefore, if, for example, the employer does not agree to change or add conditions that were not previously agreed upon, the employee has two options – either to work under the existing conditions or to terminate the contract. However, if the employee can prove that the employer acted dishonestly, deliberately excluding certain conditions from the contract or not adhering to agreements, the employee can initiate a labor dispute, for example, to recover employment-related payments,” says J. Raudonytė.

Lawyer Raudonytė also notes that employers often want to update or clarify employment contracts after signing.

“Employers still forget to include clauses in the initial contract that describe, for example, remote work procedures. Failing to do so can be very risky. Without a clear agreement, an employee could work remotely from outside Lithuania, which could lead to problems for the employer regarding information security. However, if these matters were not addressed in the employment contract, they can still be resolved through local regulations or by creating a separate agreement,” advises J. Raudonytė.