When employees do not have contracts, the end of the working relationship can be a bit complex. Technically, an at-will employee can quit at any time they want. They do not have to give two weeks’ notice. This can leave business owners in a difficult position when someone unexpectedly and suddenly quits their job and the role needs to be replaced.
On the other side, for the employee, they also have to live with the fact that they can be fired at any time as an at-will employee. They can’t be fired for illegal reasons, of course, such as discrimination. But their employer could choose to terminate their position with very little notice—or none at all.
Termination details
One important area that is often addressed in an employment contract is the termination details. For instance, perhaps the employee is required to give two weeks’ notice or even longer, such as a month. Perhaps the employer has an obligation to inform them if they’re going to be terminated in the future, giving them advance notice so that they can prepare from a financial perspective.
These contracts can also detail how and why terminations can be carried out. If an employee has a clause saying they can only be fired for cause, for instance, then the employer has to show that it was justified. Without an employment contract, as long as the reason isn’t illegal, the employer doesn’t have to justify their decision.
As you can see, there are benefits to both sides of using employment contracts, and it’s important for all involved to understand what legal options and rights they have.