Source: https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-3-1-contracts [Revision notes](https://senecalearning.com/en-gb/revision-notes.md) › [BTEC](https://senecalearning.com/en-gb/revision-notes/btec.md) › [Business](https://senecalearning.com/en-gb/revision-notes/btec/business.md) › [Business: BTEC Level 3](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3.md) › Contracts # Contracts Business: BTEC Level 3 National Extended Diploma, topic 6.3.1 ## Contracts of Employment A contract of employment is a legal agreement between a business and an employee. It contains information on the pay of the employee, their roles, the start and end date of their employment and the hours they will work. It also gives information on sick leave, holiday pay and maternity or paternity leave. There are different types of employment (and contracts): ### Part-time ![Part-time](https://image-v2.cdn.app.senecalearning.com/2018-03/8e2de3f7-9433-40e2-b40c-a60aaa7edd12/shutterstock_476734123.jpg) - A part time contract is a form of employment where people work less hours per week than people with a full-time job. - These employees usually work in shifts and usually work under 30 hours per week. - Part-time employment contracts can be better for both businesses and employees because they offer more flexibility. If the business is only busy at certain times of the week or certain months in the year then part-time contracts can be helpful. ### Full-time ![Full-time](https://image-v2.cdn.app.senecalearning.com/2018-03/7efef0f0-4265-415e-9554-94bcac7c4af5/shutterstock_146002190.jpg) - A full-time contract is a contract where the employee will work a minimum number of hours. This number is defined by the contract. - Full-time employment contracts give businesses more control over the hours that employees work. Employees work a minimum number of hours each week and this gives businesses and employees certainty. - For employees, although part time contracts offer greater flexibility, full time contracts offer certain benefits that are not typically offered by part time contracts. ### Job share ![Job share](https://image-v2.cdn.app.senecalearning.com/2018-03/03504a35-4cb1-46fe-b869-1e8df7401f0a/shutterstock_425117242.jpg) - A job share happens when two people share a full-time job. - This is good because it gives the employees more flexibility and for a business, it guarantees the number of hours that will be worked. - But, organising a job share can be hard and it requires very good communication between the two employees and the business ### Zero-hour contracts ![Zero-hour contracts](https://image-v2.cdn.app.senecalearning.com/2018-03/212594b0-e765-44a3-9a37-f493c70376b0/shutterstock_623344097.jpg) - Zero-hour contracts are contracts where a business does not have to give a person any work at all and the employee doesn’t have to accept any work offered to them. - They are beneficial for businesses because they provide the maximum amount of flexibility. This means they are less likely to waste money on unnecessary labour costs. - However, they can be bad for employee motivation because the employees won’t feel a high level of commitment to a company. ## The Value of Outsourcing Outsourcing is when a business uses another business to make part of its product or provide part of its service. ### Advantages of outsourcing ![Advantages of outsourcing](https://image-v2.cdn.app.senecalearning.com/2018-05/d9abeb87-aa7a-42d6-adef-7e16a3f6dc59/tick-305245_960_720.png) - Outsourcing can provide cost savings because a third-party business may be able to create or produce a product or service at a lower cost than the original business. ### Disadvantages of outsourcing ![Disadvantages of outsourcing](https://image-v2.cdn.app.senecalearning.com/2019-01/157692c7-c3b1-4f3e-b466-3c2f8e95af2b/cross.png) - Outsourcing can lead to quality problems if the business which is outsourced to does not uphold the same quality standards. - The business may lose its influence on quality control. ## Test yourself on Contracts - What information does a contract of employment contain? - What type of contract would be most useful for a business that is only busy at certain times of the week or certain months in the year? - Which of these is an employee benefit of full-time contracts compared to other types? [Practise this topic for free](https://app.senecalearning.com/classroom/course/f0389213-3369-45a4-8126-07b001bb9007/section/bf63b16a-b64f-4e6b-bd6b-e49ce4db85ff/session) - Previous topic: [6.2.4 Evaluating TQM](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-2-4-evaluating-tqm.md) - Next topic: [6.3.2 Recruitment](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-3-2-recruitment.md) ## Business: BTEC Level 3 National Extended Diploma contents ### 1 Exploring Business - 1.1 Features of Business Organisations - [1.1.1 Sole Traders & Partnerships](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-1-1-sole-traders-and-partnerships.md) - [1.1.2 Private & Public Limited Companies](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-1-2-private-and-public-limited-companies.md) - [1.1.3 Types of Liability & Not-For-Profits](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-1-3-types-of-liability-and-not-for-profits.md) - [1.1.4 Purposes of Businesses](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-1-4-purposes-of-businesses.md) - [1.1.5 Purposes of Businesses 2](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-1-5-purposes-of-businesses-2.md) - [1.1.6 The Different Economic Sectors](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-1-6-the-different-economic-sectors.md) - [1.1.7 Multinational Companies](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-1-7-multinational-companies.md) - [1.1.8 Stakeholders](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-1-8-stakeholders.md) - [1.1.9 Influence of Stakeholders](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-1-9-influence-of-stakeholders.md) - 1.2 Organisation of Businesses - [1.2.1 Organisational Structure](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-2-1-organisational-structure.md) - [1.2.2 Types of Organisational Structures](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-2-2-types-of-organisational-structures.md) - [1.2.3 Business Aims & Objectives](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-2-3-business-aims-and-objectives.md) - [1.2.4 Business Aims](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-2-4-business-aims.md) - [1.2.5 Business Objectives](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-2-5-business-objectives.md) - 1.3 Business Environment - [1.3.1 External Influences](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-3-1-external-influences.md) - [1.3.2 Political & Legal Change](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-3-2-political-and-legal-change.md) - [1.3.3 Economic Environment](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-3-3-economic-environment.md) - [1.3.4 Social & Technological Environment](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-3-4-social-and-technological-environment.md) - [1.3.5 Lifestyle & Technological Environment](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-3-5-lifestyle-and-technological-environment.md) - [1.3.6 Corporate Social Responsibility](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-3-6-corporate-social-responsibility.md) - [1.3.7 The Competitive Environment](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-3-7-the-competitive-environment.md) - [1.3.8 Innovation](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-3-8-innovation.md) - [1.3.9 Risk & Uncertainty](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-3-9-risk-and-uncertainty.md) - [1.3.10 Porter's Five Forces](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-3-10-porters-five-forces.md) - [1.3.11 SWOT Analysis](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/1-3-11-swot-analysis.md) ### 2 Marketing Campaigns - 2.1 Marketing - [2.1.1 Setting Marketing Objectives](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-1-1-setting-marketing-objectives.md) - [2.1.2 Customer Needs](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-1-2-customer-needs.md) - [2.1.3 The Market](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-1-3-the-market.md) - [2.1.4 Competition & The Market](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-1-4-competition-and-the-market.md) - [2.1.5 Consumer Behaviour](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-1-5-consumer-behaviour.md) - [2.1.6 Market Research](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-1-6-market-research.md) - [2.1.7 Forms of Market Research](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-1-7-forms-of-market-research.md) - [2.1.8 Market Segmentation](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-1-8-market-segmentation.md) - [2.1.9 Cultural & Social Factors in Marketing](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-1-9-cultural-and-social-factors-in-marketing.md) - [2.1.10 Promotional Decisions 3](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-1-10-promotional-decisions-3.md) - [2.1.11 Pricing Strategies](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-1-11-pricing-strategies.md) - 2.2 Marketing Mix - [2.2.1 Marketing Mix](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-2-1-marketing-mix.md) - [2.2.2 Product Life Cycle](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-2-2-product-life-cycle.md) - [2.2.3 Pricing Decisions & Price Skimming](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-2-3-pricing-decisions-and-price-skimming.md) - [2.2.4 Pricing Decisions & Price Penetration](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-2-4-pricing-decisions-and-price-penetration.md) - [2.2.5 Promotional Decisions](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-2-5-promotional-decisions.md) - [2.2.6 Promotional Decisions 2](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-2-6-promotional-decisions-2.md) - [2.2.7 Promotional Decisions 3](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-2-7-promotional-decisions-3.md) - [2.2.8 Market Mapping](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/2-2-8-market-mapping.md) ### 3 Business Finance - 3.1 Sources of Finance - [3.1.1 Internal Finance](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/3-1-1-internal-finance.md) - [3.1.2 External Finance](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/3-1-2-external-finance.md) - [3.1.3 External Finance 2](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/3-1-3-external-finance-2.md) - [3.1.4 Sources of Business Finance](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/3-1-4-sources-of-business-finance.md) - 3.2 Financial Planning - [3.2.1 Revenue](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/3-2-1-revenue.md) - [3.2.2 Costs](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/3-2-2-costs.md) - [3.2.3 Cash & Cash Flow](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/3-2-3-cash-and-cash-flow.md) - [3.2.4 Cash & Cash Flow 2](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/3-2-4-cash-and-cash-flow-2.md) - [3.2.5 Break-Even Analysis](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/3-2-5-break-even-analysis.md) - [3.2.6 Profits](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/3-2-6-profits.md) - 3.3 Financial Statements - [3.3.1 Balance Sheets](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/3-3-1-balance-sheets.md) - [3.3.2 Income Statements](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/3-3-2-income-statements.md) - [3.3.3 Liquidity](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/3-3-3-liquidity.md) ### 4 International Business - 4.1 Globalisation - [4.1.1 Growing Economies](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-1-1-growing-economies.md) - [4.1.2 Specialisation & Trade](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-1-2-specialisation-and-trade.md) - 4.2 International Business - [4.2.1 Internationalisation](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-2-1-internationalisation.md) - [4.2.2 International Trade](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-2-2-international-trade.md) - [4.2.3 MNCS](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-2-3-mncs.md) - [4.2.4 Conditions that Prompt Trade](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-2-4-conditions-that-prompt-trade.md) - [4.2.5 Assessment of a Country](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-2-5-assessment-of-a-country.md) - 4.3 International Economic Environment - [4.3.1 Globalisation](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-3-1-globalisation.md) - [4.3.2 Factors Contributing to Globalisation](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-3-2-factors-contributing-to-globalisation.md) - [4.3.3 Protectionism](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-3-3-protectionism.md) - [4.3.4 The EU & the WTO](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-3-4-the-eu-and-the-wto.md) - [4.3.5 Trading Blocs](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-3-5-trading-blocs.md) - 4.4 Factors Affecting International Business - [4.4.1 Global Competitiveness](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-4-1-global-competitiveness.md) - [4.4.2 Ethics of Global Business](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-4-2-ethics-of-global-business.md) - [4.4.3 Controlling MNCs](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-4-3-controlling-mncs.md) - [4.4.4 Cultural & Social Factors in Marketing](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/4-4-4-cultural-and-social-factors-in-marketing.md) ### 5 Principles of Management - 5.1 Management & Leadership - [5.1.1 Managers](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-1-1-managers.md) - [5.1.2 Management Theories](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-1-2-management-theories.md) - [5.1.3 Managing Organisational Culture](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-1-3-managing-organisational-culture.md) - [5.1.4 Management Style](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-1-4-management-style.md) - 5.2 Theories of Motivation - [5.2.1 Motivating & Engaging Employees](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-2-1-motivating-and-engaging-employees.md) - [5.2.2 Taylor's Theory](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-2-2-taylors-theory.md) - [5.2.3 Mayo's Theory](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-2-3-mayos-theory.md) - [5.2.4 Maslow's Theory](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-2-4-maslows-theory.md) - [5.2.5 Herzberg's Theory](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-2-5-herzbergs-theory.md) - 5.3 Managing Change - [5.3.1 Change](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-3-1-change.md) - [5.3.2 Key Factors in Change](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-3-2-key-factors-in-change.md) - [5.3.3 Scenario Planning](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-3-3-scenario-planning.md) - [5.3.4 Managing Change](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-3-4-managing-change.md) - [5.3.5 Managing Strategic Implementation](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/5-3-5-managing-strategic-implementation.md) ### 6 Business Decision Making - 6.1 Business Principles & Practices - [6.1.1 Influences in External Environments](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-1-1-influences-in-external-environments.md) - [6.1.2 Product Decisions](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-1-2-product-decisions.md) - [6.1.3 Competitive Environment](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-1-3-competitive-environment.md) - [6.1.4 Corporate Strategy](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-1-4-corporate-strategy.md) - [6.1.5 Quantitative Sales Forecasting](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-1-5-quantitative-sales-forecasting.md) - [6.1.6 Legislation](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-1-6-legislation.md) - 6.2 Quality Management - [6.2.1 Importance of Quality](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-2-1-importance-of-quality.md) - [6.2.2 Measuring Quality](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-2-2-measuring-quality.md) - [6.2.3 Total Quality Management](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-2-3-total-quality-management.md) - [6.2.4 Evaluating TQM](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-2-4-evaluating-tqm.md) - 6.3 Human Resources - [6.3.1 Contracts](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-3-1-contracts.md) - [6.3.2 Recruitment](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-3-2-recruitment.md) - [6.3.3 Training a Workforce](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-3-3-training-a-workforce.md) - 6.4 Documents & Business Decisions - [6.4.1 Sales Forecasts](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-4-1-sales-forecasts.md) - [6.4.2 Managing Strategic Implementation](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-4-2-managing-strategic-implementation.md) - [6.4.3 Problems with Strategy](https://senecalearning.com/en-gb/revision-notes/btec/business/business-btec-level-3/6-4-3-problems-with-strategy.md)