Question

Background: Contracts are essential for business, and will be an integral part of GC operations, so the owners now want to focus on contract law.   Each of the owners has experience with contracts in their businesses, and appreciate the probable risks and liabilities associated with contracts.   They also know that to avoid possible disputes with employees and clients, contracts should be comprehensive, clear, and specific.

The GC owners know that there are various types of contract agreements relevant to their business. GC will have individual contracts with employees, independent contractors, and other agents who will represent the company. Also, GC will engage in sales contracts with other businesses, consumers, and clients.  

To reduce disputes and risks and liabilities associated with contracts, the owners want all contracts to be written, with specific, complete, and clear terms. Contracts must define the rights and responsibilities of the parties. Also, since employees and/or independent contractors will be performing cleaning services on clients’ properties, these contracts should require bonding for all employees.

You, Winnie, and Ralph presented draft contracts for GC employees, including different contracts for cleaners, office managers, marketing specialists, sales representatives, and IT employees.

The GC owners reviewed the drafts and have some questions about the contracts.

Background Facts You Need to Know: At Winnie’s and Ralph’s request, it is your responsibility to research an provide answers to the GC owners’ questions. As an example, Winnie, Ralph, the GC owners, and you have determined that GC's contract with its cleaner- employees will include the following terms and conditions:

• specific duties to be performed by cleaner-employee
• salary for cleaner-employee
• work hours
• terms of payment for overtime or holiday work, if any
• sick leave
• vacation leave
• training requirements for cleaner-employee
• length of contract
• bonding for cleaner-employee
• periodic performance evaluation and how it will be conducted
• termination of the contract, i.e., a notice of termination, etc.

(Q)- Analyze and briefly discuss why each term is important to include in a GC-client cleaning contract.

Answer 1

The terms mentioned in the question are to be included in the cleaning contract of GC with its cleaner- employees. The reasons behind the inclusion of each of the terms are briefly explained below.

Specific duties to be performed by cleaner-employee

Specific duties to be performed by a cleaner-employee must be included in the contract because it helps the cleaner-employees to carry out their duties and responsibilities faithfully, industriously, and to the best of his skill and knowledge. Mentioning of duties to be performed by cleaner-employee in the contact provides clarity regarding GC's policies, procedures, rules, and regulations in connection with the duties.

Salary for cleaner-employee

Details of the salary of cleaner should be shown in the contract it gives the cleaner-employees idea about his or her compensation and benefits package. He or she will also have clarity regarding the annual salary, hourly rate, information about raises, the period of pay, payment date, bonuses, or incentives, taxes applicable, deductions if any, etc. Information regarding the timing of company pay reviews also can be included in it.

Work hours and Terms of payment for overtime or holiday work, if any

Information about normal hours of work along with possible out of hours work with levels of overtime payments must be included in a contract. Here cleaner-employees can ensure that the company GC followed all working time regulations. Clause in this part of the contractor will provide cleaner-employees clarity regarding the number of days per year he or she avail holidays, also details about whether holidays rollover to next year. It also will provide details of restrictions on holidays and payment for unused holidays.

Sick leave

Regulations regarding sick leave must be included in the contract of GC. It will give clarity to cleaner-employees that when or before what time they must inform the employer that they will be unable to attend work. It will give information regarding the documents to be produced for the granting of sick leave.

Vacation leave

Here the cleaner-employees will get knowledge regarding the vacation that can be entitled by them in a year.

Training requirements for cleaner-employee

Details of the kind of training, duration of the training, etc will be known to the cleaner-employees from this part.

Length of contract

It gives knowledge about the permanency of the contract, so the cleaner-employees can understand whether the contract is temporary or permanent.

Bonding for cleaner-employee

It helps the company GC to ensure that the cleaner-employees fulfill their duties according to the terms agreed upon in the contract. Also, the company could recover financial losses if any.

Periodic performance evaluation

Here the cleaner-employees can get information about the timing and methodology of Periodic performance evaluation.

Termination of the contract

This portion of the contract provides the cleaner-employees details about the notice period and other conditions that has to be served by both the parties before termination or leaving the company. Details of any property that has to be written by cleaner-employees at the time of termination.