Employment Contracts (Cambridge International IGCSE Business)

Exam board Cambridge International · IGCSEUpdated 2025-08-27

Spec point — "the main contents of an employment contract: duties and responsibilities, working hours, holiday entitlement, sick pay"

Employment contracts

An employment contract is a legal agreement between the employer and employee, which sets out the terms and conditions of employment
- It is usually a legal requirement for employers to provide a new employee with a contract of employment
The contract of employment will usually include
- The names of employee and employer
- Employment start date
- Working hours
- Remuneration
- Holiday entitlement
- Duties and responsibilities of the role
- Place of work
- Sick pay and parental leave
- Notice period
The main types of contract include full-time, part-time, job share and zero hours contracts
- Often, a business will have a mixture of employees with a range of different employment contracts

Benefits of employment contracts

For the employer	For the employee
- The contract clearly sets out the rules, such as working hours, duties, and pay, helping to reduce confusion or disputes	- The contract gives clear information about their job role, working hours, pay, and holidays, so they know exactly what to expect
- It allows the employer to take legal action or dismiss the employee if they break the contract, such as refusing to work agreed hours	- The contract provides security, as the employer cannot easily change terms or dismiss the worker without good reason
- It helps to create a professional relationship, where both sides understand their responsibilities and can work more effectively together	- If the employer breaks the contract (e.g. underpaying or reducing hours unfairly), the employee has the right to take legal action

Exam Hint Don’t forget that employment contracts protect both employer and employee – mentioning benefits to each side will make your answers more balanced and exam-ready

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For the employer

For the employee

- The contract clearly sets out the rules, such as working hours, duties, and pay, helping to reduce confusion or disputes

- The contract gives clear information about their job role, working hours, pay, and holidays, so they know exactly what to expect

- It allows the employer to take legal action or dismiss the employee if they break the contract, such as refusing to work agreed hours

- The contract provides security, as the employer cannot easily change terms or dismiss the worker without good reason

- It helps to create a professional relationship, where both sides understand their responsibilities and can work more effectively together

- If the employer breaks the contract (e.g. underpaying or reducing hours unfairly), the employee has the right to take legal action