Contact of Employment

Contract of Employment?

A contract of employment is a written agreement between an employer and an employee. It forms the basis of the employment relationship.

Contracts of employment are a legal requirement. To put it simply, if you don’t have them, your business is at risk.

We understand. The paperwork and time involved in putting them together can be off-putting. But they do benefit both you as an employer and your employees.

So, where do you start? What needs to be included? And what types of contracts of employment are there?

What is a contract of employment?

A contract of employment is an agreement – written or verbal – between an employee and an employer. Your contracts don’t have to be in writing to meet your legal requirements. But it’s typically best practice to make sure they are, as it saves potential misunderstanding further down the line.

The terms that are agreed between employer and employee, whether verbally or in writing, are known as express terms. They typically include things like pay, hours and holiday entitlement sick pay and holiday pay.

There are other contractual terms known as implied terms. These are the conditions of employment that are not actually written into a contract, largely because they’re implicitly expected of the person accepting the job.

This could be because they’re too obvious to have to explicitly state, they’re necessary to make a contract work (such as a driver having a driving license) and what’s known as ‘custom and practice’. This refers to business customs that aren’t written into a contract – such as closing early on a Friday during summer or having Christmas Eve off.

Contracts come into force from the moment a job offer is accepted. When an employee turns up for their first day of work, this is confirmation that they accept the terms and conditions included in their contract.

What should be included in a contract of employment?

All employees should be issued with an employment contract outlining the main terms and conditions of employment within two months of their start date. This is set out in section one of the Employment Rights Act 1996.

Key areas to include:

• Job title

• Date continuous employment began

• Place(s) of work

• Number of hours of work

• Pay and pay intervals

• Holiday entitlement and holiday pay

• Disciplinary rules

• Restrictive covenants (a clause      that stops employees from working with competitors in future)

• Notice periods

Types of contract of employment

There are a number of different types of employment contracts, like:

• Full-time contracts

• Part-time contracts

• Fixed term contracts

• Zero-hour contracts

• Agency worker agreements

In addition, there are extra rules about employing young people, apprentices’ mobile workers and agricultural workers.

Contract of employment changes

It’s not uncommon for adjustments to be made to an employee’s contract of employment. This could be because of legislation updates or internal business changes.

If you need to make an amendment to an employee’s contract of employment, this should be agreed and confirmed – in writing – as soon as possible. At most, within one month of the change. Failure to properly notify an employee of a contractual change is considered a breach of contract and can result in a claim being made against you.

How does a contract of employment protect you?

It’s not uncommon for adjustments to be made to an employee’s contract of employment. This could be because of legislation updates or internal business changes.

If you need to make an amendment to an employee’s contract of employment, this should be agreed and confirmed – in writing – as soon as possible. At most, within one month of the change.

Failure to properly notify an employee of a contractual change is considered a breach of contract and can result in a claim being made against you.

Contracts of employment provide a number of benefits and protective measures. These include:

Clarity – they make sure you and your employee are singing from the same hymn sheet. This stops any confusion for both parties and can avoid arguments down the line.

Reference point – if an employee breaches their contract, a written reference point provides you with tangible evidence.

Relationships – contracts help create positive working relationships. How? By setting out clear expectations for everyone to follow.

Deterrent – including additional clauses like confidentiality, conflict of interest and non-compete clauses can act as a deterrent.

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