Solution
@app.route("/employee")
def employee():
employee_list = Employee.query.all()
employees = [] # <--- changed from `employee` to `employees`
for employee in employee_list:
employee.append({'id' : employee.id,
'name' : employee.name,
'email' : employee.email,
'contact' : employee.contact,
'designation' : employee.designation})
return jsonify({'employee' : employee}) # <--- changed from `employee` to `employees`