As an employer, you know that clarity and transparency in your relationships with employees are paramount. That's where an Employment Contract comes into play — a vital agreement that outlines the conditions, rights, responsibilities and duties of your valued team members throughout their employment journey
In this comprehensive article, we'll take you through the crucial elements of an Employment Contract, providing guidance on what to include and why each aspect matters. From salary and working hours to statutory and implied terms, we'll navigate the complexities with you, ensuring that your Employment Contract aligns with legal requirements and your unique business needs.
Your employees are your most valuable asset, and we're here to protect their rights while safeguarding your business's interests. By the end of this guide, you'll be equipped to create rock-solid Employment Contracts that foster a harmonious work environment and set the stage for your business's continued success.
Why is an Employment Contract necessary?
An Employment Contract is an agreement between an employer and employee that clarifies the conditions, rights, responsibilities and duties of the employee whilst they're employed.
This clarification is important as it means that both parties are aware of what is expected of them and what they expect from the other person at work so that everyone is accepting of the work-life that the employee will have. An Employment Contract can also highlight key parts of a job that can differ from the employee’s previous position, such as working hours, and establish legal binding.
What are the main things that should be included in a Contract of Employment?
So, seeing as they're so useful, what does a Contract of Employment include? Whilst there are basic details that should be covered in every Contract of Employment, every job is different so you may want to speak to a lawyer about certain clauses that are more complicated before including them. You may also want to get legal advice if as an employee you do not fully understand these more complex clauses in your written contract.
First of all, names and addresses should be included so it’s clear who the agreement is shared by.
Then, you should include the job title of the employee. If you are a large company you may have very specific job details and titles so you may want to include this too. However, if you’re a smaller company or want a level of flexibility when it comes to what tasks your employee will be carrying out, don’t include many details about the role, just use the job title.
Next, one of the main things that should be included in a Contract of Employment is information about the employee’s salary. It should state whether they will be paid weekly, monthly or annually and how much they will receive. Make sure to be realistic and don’t promise anything your company cannot deliver in the future.
Location and hours and duration of the job are also main things to include in an Employment Contract. You do not have to give an address, just the name of a town or city. Whether you want to estimate hours that will be worked in a day or times when the job starts/finishes, you should include hours of work in an Employment Contract. Remember that as an employee you will need to adhere to these hours so make sure they will work for you before starting the job.
Finally, if there are any benefits, statutory or enhancements added by an employer (e.g. annual leave, sick pay or pensions), these should be included in the Employment Contract, and you should make it known to the employee where they can find information about any disciplinary and grievances procedures. Hopefully an employee will not need this information, but if you have a falling-out, they will need to know who to talk to about any grievances or appeals, so make sure this is also included in the contract.
What are the terms of an Employment Contract?
The ‘terms’ of an Employment Contract are the information included that needs to be respected by both parties. It usually concerns the conditions, rights, responsibilities and duties of the employee. The different terms that an Employment Contract includes can also be split into express terms, statutory terms, implied terms and incorporated terms.
Statutory terms are factors implied by the law, such as making sure you are paying at least the national minimum wage.
Express terms are the facts that have been mentioned in the Employment Contract. They include:
- Salary, including any overtime or bonus pay
- Working hours including overtime hours (there is a legal limit for most employees on the maximum number of hours they can work per week)
- Holiday pay
- Sick pay
- Redundancy pay, notice period and probationary period (you cannot give your employees a shorter notice period than the statutory minimum)
Implied terms are terms that must be followed but do not have to be written down, such as employers making sure the work environment is safe and that employees act lawfully when they're at work.
Incorporated terms may come from another set of documents such as an employee handbook or policy.
Get legal assistance from LawBite
An Employment Contract is the foundation of a successful employer-employee relationship, providing clarity, protection and peace of mind for both parties. By clearly outlining the conditions, rights, responsibilities and duties of the employee, this essential agreement ensures that everyone is on the same page, fostering a harmonious work environment.
At LawBite, we understand the importance of a well-drafted Employment Contract tailored to your unique business needs. Our expert team of employment law specialists can guide you through the complexities of contract clauses, ensuring that your agreement covers all crucial aspects of the employment relationship.
From the fundamental details like names, addresses, and job titles to vital elements such as salary, working hours, and benefits, we'll ensure that every aspect of your Employment Contract aligns with legal requirements and your company's objectives.
Remember, Employment Contracts are not just paperwork; they’re the building blocks of a successful and legally compliant workforce. Don't leave these crucial agreements to chance, trust us to protect your business's interests and nurture a thriving workplace. To find out more book a free 15 minute consultation with one of our expert employment lawyers or call us on 020 3808 8314.
Additional resources
- How to amend an Employment Contract
- Employee exit policy and procedure
- Understanding flexible working requests
- Can an employer change company policy without notice
- What are the three fundamental rights employment rights for a worker
