When it comes to hiring new employees, there are two commonly used documents that employers often use in the process – a letter of appointment and an employment contract. While they may seem similar, there are significant differences between the two, and it`s essential to understand each one`s purpose.

Letter of Appointment

A letter of appointment is a brief document that extends a job offer to a potential employee. This document outlines the job position, the start date, and the salary. Additionally, it may mention other relevant information, such as the location of work, job duties, and reporting structure. The letter of appointment is often the first formal communication between the employer and the employee.

Unlike an employment contract, a letter of appointment is not a legally binding document. It establishes the employer-employee relationship and specifies the terms of employment before the employee begins work. It is designed to provide the employee with the essential information needed to accept or reject the job offer.

Employment Contract

An employment contract, on the other hand, is a legally binding document. It outlines the terms and conditions of employment, including duties, responsibilities, work hours, compensation, benefits, termination procedures, and any other specific terms that the employer and employee agree upon. The employment contract is typically more detailed than the letter of appointment and is tailored to the specific job and employer.

The employment contract establishes the legal rights and duties of both the employer and the employee. It sets out the conditions under which employment may be terminated and provides a framework for resolving disputes that may arise during the employment period. An employment contract can be either a fixed-term or a permanent contract.


In summary, while both the letter of appointment and the employment contract are essential documents in the hiring process, they have different purposes. The letter of appointment is an offer letter that outlines the basic terms of employment and is not legally binding. In contrast, an employment contract is a legally binding document that outlines the specifics of the employment agreement between the employer and the employee. As a potential employee, it`s essential to read and understand both documents before accepting a job offer. As an employer, it`s crucial to ensure both documents accurately reflect the terms of employment and meet all legal requirements.

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