What to include in an employment contract? This article gives a brief outline of a standard employment contract.
What is an Employment Contract?
An employment contract, or ‘contract of employment‘, is an agreement between an employer and an employee which sets out their employment rights, responsibilities and duties. These are called the ‘terms’ of the contract.
Your employment contract doesn’t have to be in writing. However, you are entitled to a written statement of your main employment terms within two months of starting work.
The employment contract is made as soon as you accept a job offer. If you start work it will show that you accepted the job on the terms offered by the employer, even if you don’t know what they are. Having a written contract could cut out disputes with your employer at a later date, and will help you understand your employment rights.
You and your employer are bound to the employment contract until it ends (usually by giving notice) or until the terms are changed (usually in an agreement between you and your employer).
Contract for Services
If you have a ‘contract to provide services’ or a ‘contract for services’ with someone, then this is different from an employment contract and generally means you are self employed.
A contract to provide services is an agreement between you and another person to undertake some work for them (for example paint their house). You do not become an ‘employee’ for this person – you just provide them with a service.
If you are a temporary agency worker you may be contracted with your agency under a ‘contract for services’. Your agency, as an employment business, will be obliged to provide you with a written contract.
Contract of Employment – Contents
The following provides a brief outline of what is included within a Contract of Employment; this applies for all UK employment contracts.
Names of the Parties
Employment Contract Start Date
Employee’s Job Title and Description
Place of Work
Hours of Work
Sickness & Disability
Restrictive Covenants– it prevents an employee from setting up a competing business whilst still employed.
Grievance and Disciplinary Procedure
Particulars of Employment
Where do Contract Terms come from?
Contract terms can come from a number of different sources; for example they could be:
in a written contract, or similar document
in an employee handbook or on a company notice board
in an offer letter from your employer
required by law, for example, your employer must pay you at least the minimum wage
Express Contractual Terms
Express terms in an employment contract are those that are explicitly agreed between you and your employer and can include:
amount of wages, including any overtime or bonus pay
hours of work, including overtime hours (there is a legal limit for most employees on the maximum number of hours they can work per week)
holiday pay, including how much time off you are entitled to (nearly all workers are entitled by law to 24 days’ paid holiday – they may be entitled to more under their contract. Part-time workers are entitled to a pro rata amount)
how much warning (notice) the employer must give you if you are dismissed.
and provide work.
Implied Terms of an Employment Contract
As well as the terms you actually agree with your employee, an employment contract can include implied terms.
Implied terms aren’t written down anywhere, but are understood to exist. If there’s nothing clearly agreed between you and your employer about a particular matter, then it may be covered by an implied term. Terms are implied into a contract for a number of reasons.
Implied terms include:
the duty of the employer to provide a secure, safe and healthy environment for the employee
the employee’s duty of honesty and loyal service
an implied duty of mutual trust and confidence between you and the employee
a term too obvious to need stating, eg that your employee will not steal from you
any terms that are necessary to make the contract workable, eg that someone employed as a driver will have a valid driving licence
Some terms and conditions may become implied terms of the contract because you have consistently done something over a significant period, eg made enhanced redundancy payments to redundant employees. This is known as custom and practice.
The law also imposes some terms automatically, such as the right to paid holidays, the right to receive the national minimum wage and the right not to be unlawfully discriminated against.
Can I Post My Employees another EU Member State
Workers posted on a temporary basis from one European Union (EU) Member State to another are covered by the Posting of Workers Directive.
Under the Posting of Workers Directive, as an employer you must ensure your workers receive the basic key terms and conditions of the Member State they have been posted to. For example, if workers are posted to a Member State that has a higher minimum wage than they normally receive, they are entitled to the minimum wage of that other country.
How to Change an Existing Contract
If you want to change an employee’s terms and conditions of employment, you will need to get their agreement first. Otherwise, the employee may be entitled to sue for breach of contract, or resign and claim constructive dismissal.
You must tell the employee in writing about any changes no later than one month after you have made the change.
Do changes have to be in writing?
Agreed changes don’t necessarily have to be in writing. However if they alter the terms in your ‘written statement of employment particulars’, your employer must give you another written statement showing what has changed within a month of the change.
Employee Enforcement of the Right
Employees have certain rights. These rights are enforceable by law:
The right of fair treatment regardless of age, race, religion, gender, disabilities, or sexual preferences
The right to equal treatment, also with regard to wages
The right no be dismissed without proper cause and the correct procedures
The right not to get fired for giving birth to a child
Employees also have the right to a proper written notice time for termination of their work agreement in relation to the period employed
Employees have the right for compensation when they are retrenched
Terminating the Employment Contract
Both employer and employee can terminate the employment contract according to the terms contained within it. Either side can make a complaint against the other.
Both employers and employees can be in breach of a contract of employment. A breach of contract happens when either employee or your employer breaks one of the terms. If an employee continues to work under these changes without objecting, they may be regarded as having accepted the changes.
Not all the terms of a contract are written down. A breach may be of a verbally agreed term, a written term, or an ‘implied’ term of a contract.
Employer would normally use a county court for a breach of contract claim. The only way an employer would be able to make an application to an Employment Tribunal is in response to a breach of contract claim that an employee has made.
The most common breaches of contract by an employee are when they quit without giving (or working) proper notice, or when they go to work for a competitor when their contract doesn’t allow it.
Our Employment Law Documents
Available documents include employment contract templates, as well as a director contract template and a range of employment policies. Our documents are designed for use in England and Wales.
Our Contract of Employment Template is easy to customize to your business’ requirements.
They provide comprehensive legal protection, whilst avoiding excessive legal jargon. They have been designed with ease-of-use in mind. To this end, they include guidance notes. They are excellent value and available for immediate download. All the templates have been drafted by a team of Solicitors and Barristers who are expert in the field of employment.
For more information, visit us at http://www.netlawman.co.uk/bizdoc/employment-contract.php?docid=EMP001