Whether they are aware of it or not, all employees have an employment contract with their employer. Whilst some businesses choose to get their contracts of employment down in writing, others simple opt for a verbal agreement (the former being preferable!)
With over 80,000 claims brought to employment tribunals last year, knowing the facts about employment contracts can be extremely beneficial for employers.
In this blog post, we will explain what an employment contract is and discuss what should be included in one.
What is an employment contract?
An employment contract is an agreement between an employer and an employee. This agreement is the basis of the employment relationship and should be provided shortly after an offer of employment is accepted. Alternatively, you can provide a Written Statement of Terms and Conditions of Employment first and then provide the full contract of employment shortly thereafter.
Most employees are entitled to a written statement of the terms and conditions of employment within two months of starting work. Failure to provide one could leave the employee entitled to make a claim at an employment tribunal.
Both employees and employers must adhere to the contract of employment until it ends – this is commonly through the employee giving notice or being dismissed by the employer.
Whilst an employment contract does not have to be in writing, it is always advisable that it is because it can save employers a great deal of time and stress further down the line if there is a problem or query.
By having clear guidance on things like an employee’s role, their conditions and responsibilities, employers can limit their risk of facing costly employment tribunals.
What should be included in a contract of employment?
If you choose to have written employment contracts, the temptation could be to use one the contract of employment templates that the internet is currently awash with. However, as with the drafting of any contract, a one size fits all approach may not be the best course of action for your business
When you instruct a solicitor who specialises in Employment Law, you can ensure that your employment contract is compliant, effective and tailored to your needs.
Below, we have detailed the essential points to include in an employment contract:
- The job title and information about the main duties of the role
- The names and addresses of both the employer and the employee
- The employee’s start date
- The length and conditions of any probationary periods
- Whether the position is permanent or the date that it will end
- Details relating to pay – how much, when and how it will be paid
- Any benefits
- The hours of work
- The location/s where the employee will work
- Information about holidays and the conditions of taking it
- Information about sick leave and pay
- The required periods of notice.
Key company policies and procedures
Whilst some companies may choose to include information on their procedures and policies in their employee handbook, it can be beneficial to add them to the employment contract as well.
The employment contract could include:
- Details of any agreements with other staff which affect the employee’s conditions of employment, called collective agreements
- Information about how you will deal with discipline, including what is and is not acceptable behaviour and how appeals against disciplinary decisions should be made
- Information about how you will deal with grievances and who they should report problems or complaints to
- Absence policies – explain how and when employees should report that they need time of work for illness, as well as to whom they should report
- Company procedures – information about important policies or documents that will affect an employee’s employment e.g. policies on internet usage, health and wellbeing, data protection etc.
As you can see, there is a lot to consider when drafting contracts of employment. By providing your employees with a properly drafted employment contract, you can ensure you meet your responsibilities as an employer and that the members of your team understand exactly how they fit into your company.
How we can help
As part of our Retain & Assure Scheme for Businesses, our Employment Law Solicitors provide bespoke Contracts of Employment to our members. Working with you to produce a contract that is tailored to the needs of your business, our team will provide a document that you and you team can rely on.