notes

1. MEANING OF EMPLOYMENT CONTRACT
Contract of employment is defined as an employment agreement voluntarily entered into by the
employer and employee who stipulates and defines the conditions of employment. Most
contracts of employment are in written form which makes it applicable and governed to the
general law of contract. This then means that every contract of employment should be binding on
both parties as well as valid. It then means that for the contract of employment to be binding just
as a general law of contract, there should be an offer, an acceptance and a furnished
consideration.
THERE ARE THREE TYPES OF CONTRACT UNDER WHICH YOU CAN EMPLOY
SOMEONE;
A contract for unspecified period of time
This is also known as permanent contract, for this type of contract the duration of employment is
unspecified. (Not provided for).
Contract for specified period of time
This is the type of contract that duration is specified. This means this type of contract if it expires
then the contract comes to an end automatically. A contract for specified period of time could be
of duration of one month, three month, one year, two years etc
Contract for a specified task
This is of kind of contract in which a person is employed to perform a specific task. Once the
task is completed then that contract comes to an end. For example, it could be that a person is
employed to offload crates of soda from a truck and once that task has been completed then the
contract ends.

2. THERE ARE SOME INSTRUMENTS USED TO CHECK WHETHER SOMEONE IS
THE EMPLOYEE OR CONTRACTOR TO THE ORGANIZATION AND THESE ARE
THE FOLLOWING;
Control test is used to determine whether or not one is an employee
It says the more employer has more power on employee on how, when and where to do the job.
If this is true the one can be an employee if this do not apply it is taken as contract for
service where having contract during service and after service the contract is over this is
called relationship between principle and independent contractor
Second, the organization (integration) test; here the alleged employee must establish that the
work he or she did was an integral part of the business of the purported employer. This test is
vital where the employee's work is not subject to direct control of the employer, for instance
professional employees like Doctors et cetera.
Third, the Multiple (economic reality) test; under this test a number of factors are taken into
account such as payment of remuneration by way of wages or salary, prohibition on working for
competitors, supply of uniform and equipments, lack of personal business risk on the part of the
worker, work is done at the employer's, also it may be contended by the alleged employee that he
or she is economically dependent on the purported employer.
Fourth, the mutuality of obligation test; the alleged employee should establish to the
satisfaction of the court that there existed a legal obligation on both parties to provide work and
to do work respectively. Furthermore, the worker may establish that he or she worked for the
purported employer only.

3. NATURE OF EMPLOYMENT CONTRACT
Contract of employment like every other contract is an agreement between and employer and an
employee which describes and states the condition of employment. It is always advisable for one
to be sure of what the contract states before signing and accepting the contract as once signed it
is binding on both parties. A well prepared contract of employment is a statement of the capacity
in which the employee is employed, it covers and shows the name of the job, pay, allowances,
hours of work, holidays, leave, pension arrangements, and should refer to the relevant company
laws and policies as is applicable to the employee. In this case the offer is the written
employment letter which is accepted by the employee and the consideration being the wage the
employer is ready to pay the employee.
NATURE OF CONTRACT OF EMPLOYMENT COVERS THE FOLLOWING AREAS;
FEATURES OF A CONTRACT OF EMPLOYMENT AND CONTENT OF THE
CONTRACT OF EMPLOYMENT
Features of a Contract of Employment
When you are offered employment, the employer will often present you with a contract of
employment. This is especially necessary when the employment is short-term or non-permanent.
While each contract of employment will differ depending on the company involved, a legally
sound contract has some common features.
The Offer of Employment
The first part of an employment contract is a brief description of the employment being offered.
It should include the title of the employment, the purpose of the position and the brief
responsibilities expected by the new employee. This list is established by the employer rather
than collaborations with the employee.
Consideration

4. If items must be debated or bargained, such as the annual salary or working conditions for the
specific employee, the consideration section of the employment contract is where those details
will be worked out.
Legal Contract
The intention part of the contract is where the parties agree that the contract is legally binding. If
something should go wrong in the employment, this part of the contract allows both the
employer and the employee to bring the law into the equation for protection.
Certainty
The certainty section asks the employee if he has understood everything in the contract, in terms
of conditions or rules of the employment. For example, this section will ask the employee if he
understands that the payment is commission rather than an hourly wage. It is important that the
employee understands everything outlined in the contract, so this section helps protect the
employee from signing a contract with terms he does not fully understand.
Accepting Employment
A section must be included that specifies the employee has accepted the terms of the contract.
This section is usually divided into several sections, where the employee accepts the
responsibilities by initialing several sections of the contract. The acceptance also requires a date
and a signature by the new employee. When accepting the offer, the employee needs to indicate
that she accepts the offer on the terms and conditions put in place in the contract.
Performance
In reviewing performance requirements for insertion in the contract, consider establishing any
skills you would like upgraded during the term of the contract. Include production goals you
want realized and revenue enhancements you require. If a sales-based position, insert sales
volume expectations and recruitment of new clients. Incorporate any other performance
barometers you plan to measure and for which you will hold the new employee accountable.

5. Compensation
Any prospective employee expects an employment contract that defines compensation. When
you negotiate a salary and put the figures in the contract, specify a base wage and dictate the
method of payment -- salaried, hourly or commission. Commit your overtime authorization
policy to the contract. If the position involves commission payment, spell out the percentage;
how you handle draws against commissions; and how termination of employment affects any
pending contracts. If your company has an incentive program, clearly state its objectives. Include
how you handle expense accounts as well.
Benefits
Spell out your new employee's benefit package in the contract. Include any health, dental, vision
or other insurances you offer. Also, state any percentages of benefit premiums the employee has
to pay. If professional licenses, dues or memberships are necessary, make it clear in the contract
that pays for their acquisition and payment. Also cover other items such as holidays, vacations,
stock options, any profit sharing your company offers and retirement plans you provide for
employees.
Content of the contract of employment
A well written contract of employment should include all of the following;
Parties to the contract should be clearly stated: The name and contact address of the
employee who is being employed should be clearly stated as well as the name and address of the
employer.
Date of employment should be clearly stated: The resumption date of the employment should
be stated in the contract of employment. This will help in knowing when to start calculating the
employee’s entitlements.

6. Remuneration: The salary agreed on should be put down in writing. The scale or method of
calculating the remuneration should also be put down in writing. Also the interval of payment
should be written, either by weekly or monthly depending on the policy of the firm.
Terms and conditions of work relating to hours a day: The expected number of hours to be
put in by the employee per day should be clearly stated in the contract of employment.
Leave entitlements: The employees leave entitlement should be stated, number of days he is
entitled to, his leave allowance, other types of leave he may be entitled to (sick leave, casual etc).
Pension entitlements: The employee’s pension entitlements should be clearly stated if any.
The job title: The title of the job being offered should be stated. The job tasks as well should be
written.
Confirmation: The number of months or years as the case may be the employee will serve
successfully before his/her appointment will be confirmed should be stated.
Disengagement: The number of days or months notice required by either of the parties before
the contract will be terminated should be written as well.

7. PURPOSE OF EMPLOYMENT CONTRACT
Employee protection
The contract of employment protects employees every time when he/she is at work. The contract
has a power to safeguard an employee against any actions that can be done to him by the
employer which are against the agreement done by the two parties when they entered a contract.
Such a contract has a power to protect the worker against;
 Unfair dismissal
The contract of employment must stipulate the actions that when an employee do, can lead him
to be dismissed. Grounds that may justify termination under the law include misconduct,
incapacity, incompatibility, and employees’ operational requirement. This part therefore protects
an employee against any unfair dismissal because the employer must have valid reason for
termination.
 Redundancy and retrenchment
Redundancy is a termination based on reasons beyond the control of the employer or
unforeseeable by the employer. This means that no fault on the part of the employer. Procedures
for redundancy are provided for under S.38 of the employment and labor relations act read
together with rules 23 to 25 of the code of good practice rules, 2007. The employer should
observe the following prior to retrenchment;
 Employer should give a notice to all employees
 Carry a fair consultation procedure
 Agree with the employee on the criteria for selection of employees to be retrenched
 Provide statutory compensation to the retrenched employees
Employment contract therefore enable the employee to be protected when redundancy arise and
enable them to be compensated

8.  Discrimination at work place
A contract of employment provides for the work to be done and the agreement upon how the
employee should be treated at work and therefore it protect the worker against discrimination at
work place.
Protect employer
Another purpose of the employment contract is to protect the employer against any actions that
an employee can do against the agreed terms that can substantially harm the customers or slow
down operations in the business. The contract protects the employer’s interest and guarantee that
employees will abide the agreed terms of the contracts. The contract guarantee the employer the
employee won’t suddenly decide to just abandon her responsibilities by walking off the job.
It is through the contract of employment that an employer can have confidence that the work
assigned to his employees will be done and if not he can claim for compensation. The contract
also ensures that the employee will perform the job as expected by the employers because
performance standard are a part of the agreement.
Provide evidence if breach has occur
A contract of employment acts as a platform where the legal rights and obligations of the
employer and employee are stipulated. Since a contract is a legally enforceable promise, the first
task if the breach has occurred is to identify the employer's promise. The promise, to be
enforceable, must be a real promise and a commitment. A contract therefore, It is the foundation
upon which the parties can rely on incase of any disagreements between the two parties. So if the
breach occurs one part can show the proof that it has been denied its right only by referring to the
contract of employment and review the terms agreed by both of them.
To help employees to have a collective agreement
Collective agreement or collective bargaining agreement is a special type of agreement between
management on behalf of the company and trade unions on behalf of employees. Contracts of
employment enable the employees to join trade unions and therefore enjoy the benefits of the

9. collective agreement such as security at workplace, duties to be assigned to and terms and
conditions that protect and benefit the employees.
To stipulate rights and obligations of employer and employee
A contract of employment saves the purpose of stipulating which is to be done by who and who
is supposed to do what and therefore it show the rights and obligations of both employer and
employee. Knowing what one is supposed to do helps to reduce conflicts at work and understand
the benefits that each of the part is entitled to, it is through the contact of employment that things
like amount of salary to be paid to the employee, method, and when the salary should be paid to
be employee, also obligations of the employee such as to work hard, and to abide all the terms of
the contract as agreed. This helps both parties, because it ensures that the employee knows which
activities are required and which are forbidden, thus rendering a serious breach less likely. So the
employment contract saves for such purpose.
Protect companies or employers from losing employees to competitors
A good employment contract will specify exactly what can result in termination of the
employment contract. As the contract specify the duration of work, it will provide confidence to
employer for not suddenly losing his vital employees to the competitors. Entering into a fixed
duration of employment contract will require the employee to work as per the agreed time before
deciding to shift to the competitor. Some of the terms of the contract may even restrict some of
the employees from working to the competitors even after retiring in order to prevent the
companies from losing out some trade secrets to the competitors

10. HISTORICAL DEVELOPMENT OF EMPLOYMENT CONTRACT
Labour as a factor of production in the modem se nse was unknown in traditional African
Societies and has developed s lo w ly under the aegis of the State. In African communities
labour was a personal service and was offered or withheld a t will. The institution o f
slavery and colonialism c ha nge d all that. Under slavery free will shift from the labourer
(slave) to the owner of the labourer (slave master). When slavery was abolished in the
19th century the colonial State devised alternative methods of obtaining African labour.
In some instances Africans were expropriated o f their lands in order to create a landless
class, which would thereafter de pe nd on wage employment. Sometimes o utr ight force
was used. For example in Tanganyika, Chiefs invoked the Native Authority O rdinance of
1923 to force their subjects to work on public works for pay or for free. In other instances
the introduction of tax to be paid in cash made African work in European owned
plantations. This situation reminds us of a statement made by Jack Waddis in his book The
Roots of Revolt that:
The history of A fr ica n relations with t he West has been a history of robbery,
robbery of African manpower, its minerals and its agricultural resources, and its land
After the partition of Africa at the Berlin Conference of 1884 - 1885, colonies were
formed and subsequently slavery was outlawed by 1910. The development of new
colonies required labour. So methods of getting labour were devised to develop
plantations and mines in the colonies.
The State through legislation created a framework for recruitment of labour.
The Germans began by creating Wage Labour and enacted the House and Poll Tax
Ordinance 1912, Hut and Poll Tax Ordinance No. 13 of 1922 together with Involuntary
Servitude (Abolition) Ordinance, No. 13 and House Tax Ordinance, No. 26 both of the
same year, whose main purpose was to create Taxation which in tum forced the Africans
to work in order to get money to pay taxes. In 1923 the Master and Native Servants
Ordinance No 32 (Cap. 78 of 1923) was enacted. Its main purpose was to facilitate and

11. regulate the procurement of labour for capital and repatriation. It made it mandatory for
employers to pay wages in cash only.
The Native Authority Ordinance 1926 legalised the communal labour tribal turnouts
and the tax defaulters The Master and Native Servants (Written Contracts) Ordinance
No. 28 of"1942 (Cap 79) came into force on 18/12/1942. It made it obligatory for certain
types of contracts involving natives to be reduced into writing. The Master and Native
Servants (Recruitment) Ordinance, N o . 6 of 1946 (Cap 80) came into force on 15/311946.
This Ordinance mad e provisions for licensing of recruiters who were divided into two
categories: private recruiters and professional recruiters. Section 2 defined
recruiting as: any operations undertaken with the object of obtaining or supplying the
labour of natives who do not spontaneously offer their services at the places of
employment, or at an office established by Government, or by an employer’ s organisation
with the approval of the Labour Commissioner for the purpose of receiving applications
for employment, and recruit, recruiter and recruitment have corresponding meanings.
The distinguishing fe a t ur e s of the above pieces of legislation were the element of
involuntariness on the part of the native servant. Thus the notion of freedom of contract
was jettisoned and in its place a quasi-penal regime was introduced.
A dramatic change occurred in 1957 with the enactment of the Employment Ordinance,
Cap 366, which recognised that the contract of employment is a voluntary agreement
between the employer and the employee. The colonial State purported to conform to the
standards la id down by the International Labour Organisation ( ILO) on employee’s
welfare. Other laws passed in the 1950’s are the Factories O rdina nce, Cap 297, and
Workmen‘s Compensation Ordinance, Cap 263,Accidents and Occupational Diseases
(Notification) .Ordinance, Cap 381. Some of the above ordinances, a me nd e d from time
to time, are still in force today. Section 2 of the Master and Native Servant (Recruitment)
Ordinance 1946 Cap 80
For six decades before independence Labour in Tanzania was available from the poorest
working class. This labour was employed ma in ly in large Plantations; mines and small
manufacturing sector and it formed the permanent wage earning class. The management o f

12. Athis labour, was done through various legislation spanning from the 1922 Hut and Poll
Tax Ordinance to the 1962 Trade Disputes Settlement Act.
Since independence t he Tanzania Government has actively legislated in order to manage
labour. The principal features of post- independence legislation are as follows:
State control of collective bargaining: Civil Service (Negotiating Machinery) Act, Cap
484, Local Government Services (Negotiating Machinery) Act, Cap 542, Local
Government Negotiating Machinery Act No. 11 of 1982, Permanent Labo ur Tribunal Act,
No. 41 of 1967.
Bureaucratic machinery for settlement of trade disputes; Civil Service (Negotiating
Machinery) Act, Cap484, Local Government Services (Negotiating Machinery) Act, Cap
542, Local Government Negotiating Machinery Act No. 11 of 1982, Permanent Labour
Tribunal Act, No. 41 of 1967.
Enactment of the Disciplinary Code: Security of Employment Act, Cap 574.
Monolithic s t a te sponsored trade unions: National Union of Tanganyika Worke rs Act,
No. 18 of 1964, Cap 555, Jumuiya ya Wafanyakazi w a Tanzania Act, No. 24 of 1979;
Organisation of Tanzania Trade Unions Act No. 20 of 1991
Establishment of the check-off system: Trade Unions Ordinance (Amendment) A c t ,
No. 51 of 1962.
Ouster of jurisdiction of ordinary courts with regard to the Disciplinary code and trade
disputes.

13. Conclusion
The introduction of employment law to Tanzania( formerly Tanganyika ) followed the
introduction of colonial economy which meant to overcome the developing countries decades old
position as exporters of raw materials and prepared these countries to be importers of consumer
and producer finished goods .The colonial government was not interested in developing
industries or strong working class but rather worked toward preservation of the existing mode of
production which involved peasant production with weak working class which would further
limit the developing countries to create self-sustaining economies which would require
considerable capital investment in machinery and other industrial inputs.
A good employment contract is beneficial to both the employee and the employer. It spells out
the rights and obligations of each party, protects the job security of the employee and protects the
employer from certain risks such as the release of confidential employer information after the
term of employment ends. Some jurisdictions require employment contracts for certain positions.
A good employment contract will specify exactly what offenses can result in termination of the
employee. This helps both parties, because it ensures that the employee knows which activities
are required and which are forbidden, thus rendering a serious breach less likely. The labor law
of the particular jurisdiction should be consulted to ensure that the terms of the contract do not
contradict legal requirements.
If the employee will have access to confidential company information, it is important from the
employer's point of view to include a clause preventing the employee from divulging this
information to others. An employer might also wish to prevent the employee from working for
competitors, although the labor laws of various jurisdictions differ on the acceptability of such a
clause. In both cases, non compete clauses are typically binding on the employee for a certain
period (perhaps two or three years) after the employment ends
The duties of both the employer and the employee should be clearly spelled out in the
employment contract. This section should include employee job duties, salary and benefits and
any overtime incentives. The employer's right to transfer the employee to another position should

14. also be included, although if this happens, the employment contract should be amended to reflect
the employee's new job duties.
REFERENCE
Anderman, S (2000) labor law, Management decisions and workers right, 4th edition, Dublin
London
Painter, w and holmes (2006) Cases and materials on employment law, 6th edition, oxford new
York
Steven, D. (2000) labor law, Britain: Butlterx Publishing Company London
Urio , A and Urio, J. ( 2011) The law on employment and labor relations in Tanzania, Moshi
URT (2004). The employment and labor relations Act

15. MOSHI COOPERATIVE UNIVERSITY
(MoCU)
FACULTY: FBIS
PROGRAMME: MASTER OF BUSINESS MANAGEMENT
COURSE: LEGAL ASPECTS OF EMPLOYMENT, LABOUR RELATIONS
AND ETHICS
COURSE ANTE: MAL 657
INSTUCTOR: MSANGA (Professor R)
TASK: GROUP WORK
GROUP MEMBERS REG. No.
BERNARD J. MSUYA MBM/HD/138/15
ABDULAZIZ MOHAMED MBM/HD/134/15
AGNES S. MTOROBO MBM/HD/135/15
ALEX I. NYAGANGO MBM/HD/162/15
QUESTION:

16. Discuss the contact of employment in the light of meaning, nature purpose and historical
development.