Skipping the Employment Contract Hurts the Owner: 4 Traps Restaurants Fall Into
An oral agreement isn't invalid — it just means that when something goes wrong, the one who has to prove what was agreed is you. Without a written employment contract, the burden of proof, fixed-term misuse, probation and non-compete all tilt against the owner. This breaks down the 4 traps, with the free Ministry of Labor template.
"We just agreed verbally" — when there's no contract, it's usually the owner who gets hurt
Many restaurant owners think: you agree the hourly rate, agree the schedule, and start — why sign anything? Then something happens — a complaint, a labour dispute, an inspection — and you discover that without it in writing, the burden of proof falls almost entirely on the employer. Restaurants are labour-intensive with high turnover, so disputes aren't rare; and "no contract, or an unclear one" is often what turns a small matter into a big one.
An employment contract isn't about tying employees down — it's about making your agreement with them clear, and protecting both sides. This covers whether you need it in writing, what to put in it, the traps of not having it, and the most practical first step.
Does an employment contract have to be in writing?
Legally, an employment contract is valid even if oral (it's a consensual contract) — once both sides agree on the work and the pay, it takes effect; a signed paper isn't strictly required. But valid isn't the same as clear:
- Once an oral agreement turns into he-said-she-said, whoever asserts must prove — and the records of attendance, wages and duties are usually in the employer's hands, so the proof burden actually lands on you.
- Some clauses are void without writing (see non-compete and minimum-service-period below).
So the real answer to whether to sign one is: the law doesn't force it, but to protect yourself, always put it in writing.
What "required items" should an employment contract cover?
Per Article 7 of the LSA Enforcement Rules, an employment contract should cover the following. You don't need to memorise the statute — use the table to write your terms down:
| Required item (Enforcement Rules §7) | In restaurant terms |
|---|---|
| Workplace and the work to be done | Which store; front-of-house / kitchen / counter |
| Hours, rest, holidays, statutory/rest days, leave, shift changes | Shifts, start/end times, how to swap, weekly rest (incl. whether flexible hours apply) |
| Wage: agreement, adjustment, calculation, settlement, payment | Hourly/monthly amount, when paid, how OT is calculated |
| Contract formation, termination and retirement | Start date, resignation and notice rules |
| Severance, pension, and other allowances/bonuses | Attendance bonus, year-end, festival bonus |
| Safety & health, education/training, welfare | Onboarding training, staff meals, labour/health insurance |
| Disaster compensation & sick-injury aid, discipline & rewards/penalties | How injuries are handled, house rules and discipline |
You don't have to write it from scratch — the Ministry of Labor publishes a free part-time employment contract template, and city/county labour bureaus offer full-time templates to download and fill in. Spell out hourly/monthly pay, shifts and hours, leave rules, whether you use flexible working hours, and how overtime is calculated.
4 traps owners hit most when there's nothing in writing
- The proof burden is on you in a dispute: how wages were agreed, whether OT was agreed, the scope of duties — without a contract, the employer usually carries the burden of proof in mediation or court.
- Fixed-term contract misuse: restaurants love temp and short-term hires, but LSA fixed-term contracts are limited to temporary, short-term, seasonal, or specific work; signing genuinely continuous work as fixed-term and not renewing to dodge severance can be deemed a non-fixed-term contract and fined.
- Probation not spelled out: the LSA has no explicit probation provision; its length and how a failure is handled rely on the contract; without it, dismissal-for-unsuitability disputes are easy to trigger.
- Non-compete / minimum-service-period are void without writing: to restrict post-departure competition, or require a minimum service period in exchange for training costs, LSA Articles 9-1 and 15-1 require it in writing and meeting reasonable conditions (compensation, period, scope); oral is always void.
The most practical first step: sign the template, then make the contract match attendance
A compliant employment relationship stands on two legs: one is signing the contract (use the Ministry of Labor template — doable within half an hour), the other is making what the contract says match what actually happens — the contract states shifts and hours, so the actual attendance needs records to back it up; otherwise when an inspection reconciles the books, the proof burden lands back on you.
Systematising attendance is the key to that second leg. Eatsy Staff Clock-in (currently free) has staff clock in by GPS to record daily start/end times, schedules online, and auto-compiles hours into an exportable (Excel) report, so the hours and leave your contract states have a day-by-day, auditable attendance record behind them. Those records serve as evidence in a dispute or inspection, but they don't guarantee compliance for you — compliance still depends on how you actually schedule, pay and grant leave. For the employee contract itself, use the Ministry of Labor template or consult a labour professional; Eatsy Staff Clock-in covers the attendance-and-hours part. Eatsy is an operating system built for independent restaurants — its core is online reservations, and staff clock-in is one part of it. To draft a schedule first, use the free shift-schedule template generator.
＊This article is a general overview and not legal advice; for any specific case, rely on the interpretations of the Ministry of Labor and your local labour bureau. Contract clauses should be reviewed by a labour professional or lawyer.
Frequently Asked Questions
▸Does an employment contract have to be in writing?
Legally an oral contract is valid; writing isn't strictly required. But strongly put it in writing: in a dispute the proof burden often falls on the employer, and clauses like non-compete and minimum-service-period are void without writing.
▸What should an employment contract cover?
Per LSA Enforcement Rules §7: work content and place; hours, rest, holidays and shift changes; wage agreement, calculation and payment; contract formation, termination and retirement; severance, pension and allowances/bonuses; safety and health; training; welfare; disaster compensation; discipline and rewards/penalties. The Ministry of Labor offers a free part-time contract template, and local labour bureaus offer full-time versions.
▸Can I keep hiring temps on fixed-term contracts?
No. Fixed-term contracts are limited to temporary, short-term, seasonal or specific work; signing continuous work as fixed-term and not renewing to dodge severance can be deemed non-fixed-term and fined.
▸Can I dismiss freely during probation?
The LSA has no explicit probation rule. Its length and handling rely on the contract, and you still need a concrete unsuitability reason and proper process — not firing at will during probation.
▸Without a signed non-compete, can I stop a departing employee opening up across the street?
No. A non-compete is valid only if written and meeting reasonable conditions (compensation, period, scope) under LSA §9-1; oral or unsigned is void.
▸Is an oral employment contract valid?
Yes. It's a consensual contract: once both sides agree on work and pay, it is formed and legally effective. But oral terms are hard to prove in a dispute, and non-compete and minimum-service-period clauses are void without writing — so a written contract is still strongly advised.
▸Where do I download an employment-contract template?
The Ministry of Labor website has a free part-time employment contract template, and city/county labour bureaus offer full-time versions; search 勞動契約 範本 plus your city to find them, then fill in and adjust.