A contract of service defines the employer-employee relationship, including the terms and conditions of employment. The contract must include certain terms and essential clauses, such as hours of work and job scope.
What is a contract of service
A contract of service is an agreement in which:
• One person agrees to employ another as an employee
• The other person agrees to serve the employer as an employee
The agreement can be in writing, verbal, expressed or implied. It can be in the form of a letter of appointment or employment, or an apprenticeship agreement. However, to minimise disputes on the agreed terms and conditions, the contract should be in writing.
Contract of service vs. contract for service
A contract of service is an agreement between an employer and an employee.
In a contract for service, an independent contractor, such as a self-employed person or vendor, is engaged for a fee to carry out an assignment or project.
This table summarises the main differences between the two: