# Employment contract

> An employment contract is a legally binding agreement between an employer and an employee that sets out the terms of the working relationship, including pay, role, hours and termination rights.

An employment contract is the legal agreement that governs the relationship between you and the people you hire. It records what you will pay, what the employee will do, how many hours they will work, and what happens when either party wants to end the arrangement. Most countries require a written contract, though the exact rules vary: some jurisdictions demand one before the employee starts, others allow a brief window after the start date. Contracts come in two main types: indefinite (no fixed end date, the most common form for full-time hires) and fixed-term (set to expire on a specific date or at the end of a project). Using the wrong type, or missing required clauses, can expose you to fines or claims. When you hire through a global employment platform such as Teamed, Teamed's in-house employment-law team drafts and holds the local contract, covering you in each country from day one.

## What is the difference between a fixed-term and an indefinite contract?

An indefinite contract has no scheduled end date and continues until one party gives notice or a lawful reason for termination arises. A fixed-term contract ends automatically on a set date or event. Many countries restrict how many times you can renew a fixed-term contract before it converts to indefinite status.

## Does a contract have to be in writing?

In most countries, yes. The European Union, for example, requires employers to give employees a written statement of key terms from the first day of work. Even where oral contracts are technically valid, a written document protects both sides and is standard practice globally.

## What clauses must every employment contract include?

Core clauses cover job title and duties, pay and payment frequency, working hours, holiday entitlement, notice period, and the governing law of the contract. Many countries add mandatory clauses around probation, sick pay, and data protection. Missing a required clause can render that term unenforceable.

## Key facts

- **EU written-statement deadline:** Day one of employment (Source: EUR-Lex, EU Directive 2019/1152, verified 2026-06-24)
  EU Directive 2019/1152 requires employers to provide written terms covering at least 12 specified items no later than the first working day.
- **UK written statement deadline:** Day one of employment (Source: UK Government, GOV.UK, verified 2026-06-24)
  Since April 2020 the UK Employment Rights Act 1996 (as amended) requires a written statement of particulars from the first day of work for employees and workers.

## Frequently asked questions

### Can I use a single template contract for all the countries I hire in?

No. Each country has its own mandatory clauses, language requirements, and statutory minimums. A single template will almost certainly be missing locally required terms. You need a separate contract drafted under the law of each jurisdiction where you employ someone.

### What happens if a fixed-term contract is renewed too many times?

Many countries automatically convert the contract to indefinite status after a set number of renewals or a total duration, often two to four years. Germany, France and Spain all have such rules. If you keep renewing without checking local law, you may end up with obligations you did not intend.

### Do contractors need an employment contract?

No. Independent contractors operate under a services agreement, not an employment contract. Using employment-contract language with a contractor can be evidence of misclassification, which carries penalties in most countries. Keep the two document types clearly separate.

### Who signs the employment contract when I hire through a global employment platform?

The platform, acting as the legal employer, signs the local employment contract with the worker. You sign a separate services agreement with the platform. The worker's day-to-day work is directed by you, but the employment relationship sits with the platform entity in that country.

## Sources

- [Directive 2019/1152 on transparent and predictable working conditions](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32019L1152), EUR-Lex / European Union
- [Employment contracts and conditions: written statement of employment particulars](https://www.gov.uk/employment-contracts-and-conditions/written-statement-of-employment-particulars), UK Government (GOV.UK)

_Last updated 2026-06-24. Reviewed by Teamed's in-house employment-law team. Source: https://www.teamed.global/glossary/employment-contract_