Employment relationships are central to running a business. Clear personnel records and procedures help employers manage their workforce consistently.
For small and medium-sized businesses, employment risks often do not emerge when the first employee is hired. They arise later: when an employee leaves, remuneration changes, misconduct is addressed, working hours are disputed or the authorities inspect records. If arrangements were only verbal or records were fragmented from the outset, establishing the parties' rights and obligations becomes harder.
The Labour Code and its implementing legislation set out rules on employment contracts, wages, working hours, rest periods, disciplinary action and termination. Businesses must also consider social, health and unemployment insurance and occupational safety and hygiene obligations, depending on the contract type, role and category of worker.
Employment contracts should be clear from the outset
An employment contract is more than a form to be signed for compliance. It records the foundations of the relationship: role, duties, workplace, term, salary, allowances, working hours, rest arrangements, insurance and other rights and obligations. Overly brief contracts make employee expectations harder to manage and create difficulties when actual duties change.
Businesses should ensure that contracts reflect the nature of the work. The terms may differ for probationary, seasonal, long-term, management, sales or highly specialised roles. Where applicable, confidentiality, entrusted assets, client data, commission, sales bonuses and handover obligations should also be clearly documented.
Establish rules for pay, bonuses and allowances
Remuneration disputes often arise from unclear wording: what constitutes fixed salary or an allowance, which payments depend on business results, what conditions apply to bonuses and when payments are due. Businesses should maintain salary schedules, remuneration rules or internal policies suited to their operating model.
Where commission, KPIs or project bonuses apply, the calculation method, eligibility conditions, adjustment circumstances and treatment of employees leaving before payment should be clear. The clearer the policy, the less scope there is for departments to interpret it differently.
Take care with internal labour regulations and disciplinary action
Internal labour regulations provide an important basis for managing workplace conduct. Businesses that reach the statutory workforce threshold must adopt written internal labour regulations and complete the relevant procedures. Even below that threshold, businesses should have basic workplace rules on conduct, confidentiality, use of company property, working hours and reporting procedures.
Particular care is needed when taking disciplinary action. Decisions should not be based on instinct or verbal notices. Records should document the incident and communications with the employee, and the appropriate statutory procedure must be followed. An unsupported or procedurally defective disciplinary decision can create greater dispute risks than the original misconduct.
Insurance obligations and personnel records
Businesses should assess their social, health and unemployment insurance obligations according to the contract type and category of worker. The 2024 Law on Social Insurance took effect on 1 July 2025, so employers should check their arrangements against current rules rather than rely on past practice.
Personnel records should be maintained for each employee and include personal details, contracts, appendices, salary adjustment decisions, timesheets, payroll, insurance records, performance assessments, handover records and leaving documentation where applicable. Employee personal data also requires attention to collection, use, security and access controls under personal data protection rules.
Termination is a common source of disputes
When an employee leaves or the business wishes to terminate employment, it should check the legal grounds, notice period, payment obligations, asset handover, employment confirmation and relevant insurance records. Many disputes arise because businesses act too quickly, lack written records or cannot agree on the amounts payable.
Businesses should have an exit checklist for each category of employee. It need not be complex, but should cover handing over work, returning company property, disabling account access, settling entitlements and retaining signed confirmations. This simple step can prevent significant problems later.
This article provides general information only. Each employment relationship may be affected by the contract type, role, industry, collective agreement or specific policies, so businesses should review the relevant records before deciding.