The 7 most commonly asked questions about contracts of employment

Do I need to provide them?

Yes! A written statement of particulars of employment must be provided within two months of the employee starting employment, however as soon as possible is best practice. This contains the terms that legally you must agree with the employee. Employers can then choose to include other terms and conditions or polices to form the Contract of Employment.

What do you need to include?

For the written statement of particulars to comply with the Employment Rights Act (1996), you must have the following agreed with the employee:

  • Name of employer and employee
  • Date employment commenced
  • Job Title
  • Pay and date of receipt
  • If any bonuses or commission
  • Hours of work
  • Holiday entitlement
  • Place of work

What else can you include?

An employer can add additional policies or terms and conditions to a contract, such as contractual notice periods, sick pay schemes, pension details, garden leave rules, mobile phone policy, non-compete or poaching clauses, training policy and guidance on company vehicles.

But you can’t agree just anything, as it still needs to comply with employment law and you need to ensure you follow an employer’s minimum duties and obligations.

What are the advantages?

Contracts of Employment can act as key guidelines that build the relationship between employer and employee, to ensure standards are maintained, there is a safe working environment and there is a mutual understanding of the business culture. Having clear expectations from the outset can help mitigate against any future issues, claims or misunderstandings and overall save you a lot of time and money.

What are the risks or disadvantages?

A contract of employment is not just employee guidelines, but also the obligations of the employer. So it is important to ensure that you can uphold your end of the agreement and that you are comfortable with all information contained, as either party could be at risk of breaching the contract or receiving a claim.

Can I change them?

A contract should be reviewed carefully by both parties before being agreed, as once it is signed it is more difficult to change without mutual agreement. The process for making the change can be dependent on the type of change, the impact on employees or the number affected.

For example, if the change were an increase in salary to one particular employee, then an informal meeting followed by the changes confirmed in writing would be appropriate. However, should you wish to increase all employees’ hours, then they would require a consultation period to allow them to buy in and agree to the change; sufficient notice of the change; and even a payment to make up for any loss or detriment caused by the change.

Does everything have to be in writing?

Not necessarily. Terms of employment discussed verbally and not in the contract of employment, even going back to interview stage, can be legally binding. Also there will be things that ‘go without saying’. An example is the employer’s duty of care to provide a safe environment for staff to work in. This is known as an implied term and does not need to be in writing to be contractual. Sometimes a term can become contractual over time, through custom and practice. This is when a term is fair, clear, known to everyone, and has become established over time. Common examples are bonuses or redundancy terms that may not be disclosed in a contract of employment but may become implied through custom and practice.

This article was written by Matilda Swanson and originally appeared on the Shapcotts website.

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