Employment contracts built for your business

A contract of employment is a written agreement between an employer and an employee that outlines their role and what’s expected of them in the ‘employment relationship’. This type of document is a legal requirement in the UK and if you don’t have compliant employment contracts in place, your business could face significant risks further down the line.

To comply with the Employment Rights Act 1996, all employees should get an employment contract outlining the main terms and conditions of their employment. All employees and workers have to be given a written statement of employment terms – including information on pay, the date their continuous employment began, notice period, sick pay and much more, on day one of their employment. 

Within two months of their start date, you should give them additional information on pension entitlement, disciplinary procedures and collective agreements with trade unions or staff associations.   

A contract of employment is established between two parties, the employer and the employee, when: 

• The employee agrees to work for the employer 
• The employer agrees to pay the employee for the work

However, it’s important to remember that this agreement is not legally binding until:

• An offer is made
• The offer is accepted
• You both agree to the terms that are outlined in the contract
• Consideration (a valuable item that is promised in exchange for a contract. In employment contracts, this would be a salary.)

Contracts of employment are important for businesses for many reasons and give employers like you benefits and protections, like:

Clarity
An employment contract makes sure you and your employee are singing from the same hymn sheet. It outlines clear expectations and the terms and conditions of employment, including benefits, salary and other essential details. This stops any confusion for both parties and can avoid any potential disputes down the line.

Legal protection for your business
Employment contracts offer legal safeguards for employers and employees. If you’ve defined the conditions of employment, your business is protected against the risk of legal conflicts if wires get crossed, workers can ensure that they are treated fairly and that their rights are respected – and it’s a win-win for everyone!

Reference point
If an employee breaches their employment 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.

Employers are under a statutory obligation to provide workers with a written statement of the particulars of their main terms and conditions of employment – often called “written particulars” or a “section 1 statement”

Before 6 April 2020, the law said that the written statement of particulars had to be provided to employees no later than two months after their employment started.

However, from 6 April 2020, a written statement is now a ‘day one’ right for all workers, even if their employment will only be short term.
The difference between a contract of employment and a written statement of employment particulars is that the employment contract is a document that sets out the relationship between the employer and the individual, and sets out the rights and obligations of both parties. Employers often include the written statement of employment particulars in the contract of employment.

The contract an individual will be given depends on their employment status – which is why it’s so important to understand the employment status of all those you employ or whose services you utilise. They could be an employee, an employee shareholder, a worker, an intern or someone genuinely self-employed. Discover more about the common employment status misconceptions here.

The different types of employment contracts could include:

• Fixed-term contracts – This is an employment contract used for employers if you need to fill a role temporarily. A fixed-term contract would usually have a start date and end date as part of any agreement, alongside details around salary and hours. 
• Permanent contracts – Permanent contracts generally stipulate employees will work a minimum of 35 hours a week. Employees will have all worker entitlements as part of the contract. 
• Temporary contracts – This type of employment contract will have a start and end date, but there is flexibility afforded in that you can extend or change the nature and terms of the contract. Employees will receive the same rights as all other employees, like sick pay and holiday leave. 
• Zero-hours contracts – You may require a zero-hour contract when you need an individual to work irregular hours without a guaranteed minimum number of hours. This may be during a busy period like Christmas. Equally, you may need somebody with specific skills without having the capability of employing them full-time.

There are additional regulations for employing young people, apprentices, mobile workers, and agricultural workers. Our team can provide you with bespoke employment contracts and guidance to make sure that you remain legally compliant no matter who you hire. 

For help defining and understanding different types of employment contracts, speak to our experts today. We offer our clients 24/7 access to our HR & Employment Law experts. Simply call 0345 844 1111 to start the conversation.

What needs to be included in a section 1 statement is set out in Section 1(3) of the Employment Rights Act 1996 (particulars of employment), Section 1(4) (particulars of terms of employment) and Section 3(1) (disciplinary procedures and pensions).

These key details of the individual’s employment terms and conditions – known as their written statement of particulars of employment or a section 1 statement – are normally included in an employment contract.

This includes:

• job title
• sick pay and procedures
• other paid leave (for example, maternity leave and paternity leave)
• holiday entitlement and holiday pay
• notice periods
• pensions and pension schemes
• collective agreements
• any other right to non-compulsory training provided by the employer
• disciplinary and grievance procedures

And more. Find out more about what to include in employment contracts here.

Employment contracts should be given when someone starts their employment, though it’s also common for employers to issue them before someone starts their employment.

Each employment contract will be different, so it’s important you take that into account when creating your contracts. For support with this, why not speak to one of our consultants? Call 0345 844 1111 to find out more.

A contract of employment should reflect the employment relationship. So, if anything in that employment relationship changes, the employment contract needs to be updated.

For example, if someone has been promoted, an amended employment contract should be created to reflect the new job title and any changes to terms and conditions.

Another example may be when someone puts in a flexible working request to change their hours and it’s accepted. When that happens, their employment contract should be amended to reflect the change in hours and any other changes that might pop up because of it!

If you’d like to find out more about how to do this legally and fairly and discuss whether you need to update an employee’s employment contract, simply partner with us for 24/7 access to our experts, support with your policies, handbooks and contracts, and much more! Contact us today by calling 0345 844 1111.

If an employee refuses to sign an employment contract but still works for the business and accepts their salary, then there’s an argument that they’ve accepted the contractual terms.

It would always be best for a contract to be signed, however – because if you need to rely on any terms, such as a restrictive covenant written in the contract, it would be easier to enforce them if there was a signed contract in place.

For help and advice with your employment contracts and your wider HR & Employment Law compliance, simply contact us today by calling 0345 844 1111.

If an employee breaks the terms of their employment contract, then action can be taken depending on what the breach may be.

For example, if a contract of employment states that an employee’s hours of work are 9am – 5pm but they always turn up for work at 9.30am or 10am, it could lead to disciplinary action being taken for lateness.