Contracts of Employment

Contracts of Employment

Are you a new start organisation or planning to recruit a new employee?  In either situation there are a myriad of factors that need to be considered.  However, one of the most important to consider is the provision of a contract of employment to all new employees.

What is a contract of employment?

A contract of employment is an agreement between an employer and employee and is the basis of the employment relationship.  There is no statutory requirement to have a written contract of employment in its entirety, but employers are required to provide certain written particulars of the terms and conditions of the contract to the employee.  This is known as a Written Statement of Particulars of Employment.  This must be provided within two months of the employee commencing employment, although ideally should be provided on commencement of employment perhaps as part of the induction process.

Contracts of Employment can be constructed in various ways, express or implied.  Express would normally be by written agreement and implied through custom and practice or where a particular term has been built into employment relationships.

The Written Statement of Terms and Conditions

It is a requirement that the following information is contained in the Written Statement:

  • Identity of the parties
  • Date of commencement of the contract
  • Date of commencement of continuous employment
  • Job title or brief description of duties
  • Notice periods
  • Expected duration of the contract
  • Place of work
  • Hours of work, including overtime
  • Rate of pay
  • Frequency of pay
  • Holiday entitlements and holiday pay
  • Sickness provisions
  • Pension provisions including contracting out certificates if applicable
  • Disciplinary rules
  • Disciplinary and grievance procedures
  • Collective Agreements
  • Conditions for working outside the UK

It should also be noted that it is proposed that details of Family Leave – maternity, paternity, shared parental leave, unpaid parental leave and time off for dependants should also be included in the Written Statement although this is not a legal requirement as yet. 

Finally, but not a legal requirement, it is a good idea from the point of view of safeguarding the organisation, to include a declaration from the employee of their right to work in the UK, a statement to the effect that the employee will notify the organisation of any change in that right and a sentence advising the employee that to work whilst not having the right would result in immediate dismissal as an act of gross misconduct.

Statutory Rights

The most important of the Implied Terms are Statutory Rights.  These include:

  • The right not to be discriminated against
  • Equal Pay
  • National Minimum or Living Wage as appropriate
  • The right to not suffer unlawful deduction from wages
  • Guarantee payments
  • Itemised pay statements
  • Statutory sick pay
  • The rights of parents and carers
  • Payments during medical suspension
  • The right to a safe place of work, breaks and rest periods
  • The right to paid annual leave
  • The right to various types of time off
  • Rights in relation to Trade Union membership and activities
  • The right to be accompanied at disciplinary or grievance hearings
  • Continuity of Employment in a Transfer of Undertakings situation
  • Rights to minimum period of notice
  • Redundancy rights
  • Unfair dismissal rights
  • Rights to a written statement of reasons for dismissal.

With the exception of the legal requirements of a Written Statement, the wording will vary between organisations and between types of job role.  Some organisations choose to add clauses to the contract such as Confidentiality, Non- Disclosure, Data Protection and Restrictive Covenants.  However, a note of caution to employers.   Whilst these clauses will safeguard the organisation, it should be noted that a Written Statement of Particulars of Employment is a legally binding contract between the employer and employee unless stated otherwise as soon as it is signed and dated by both parties.  Any change in terms, unless this is due to changing legislation, must firstly be agreed through consultation with the employee and then confirmed in writing.   Any imposed change can constitute a breach of contract.


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