A contract of employment is a legal document that exists between an employee and an employing organisation that stipulates the terms and conditions upon which the individual is employed. Contracts are legally binding and are a mix of express and implied terms.
Why have a contract in place?
A contract will exist between your organisation and any staff you employ regardless of whether a written document exists. The contract will begin once the employee accepts the job offer and starts work. However, having a written document in place provides clarity to both parties in terms of what was agreed in relation to the type of work the employee will carry out and what the employer is offering in return. A contract can also be a useful tool to protect your business. As an employer, you can choose to include clauses around confidentiality, intellectual property and restrictive covenants that prevent an employee from joining a competitor organisation for a period of time after their employment ends. If a contract is written well, it can also protect your business from disputes over the contract terms at a later stage.
Contracts of employment are generally made up of express and implied terms. In basic terms express terms are usually those written down in the contract (or provided verbally) and will typically include such things as the employee’s entitlement to paid holidays, rest breaks, hours of work, pay etc. Implied terms are not written into the contract but are implied as they are considered obvious and therefore do not need to be written down. Examples of implied contract terms would be the duty of mutual trust and confidence between the employee and the employer, the employer’s duty to provide safe systems of work and the employee’s right to be paid at least the national minimum wage and receive at least the statutory provision around notice periods etc.
Contract terms can often vary depending on an employee’s level of seniority. For example, a very senior employee with a highly specialised skillset is likely to be harder to replace so a longer notice period can be imposed should the employee decide to leave your business, along with confidentiality clauses and restrictions on their ability to work for competing organisations for a period of time following their departure. For more junior employees, a very lengthy document full of such clauses would not be appropriate and may even lead to the individual being put off accepting the role.
Statement of Employment Particulars
In April 2020, The Good Work Plan came into force, which included a legal right for all employees (and workers) to receive a Statement of Employment Particulars on or before their first day of employment. Whilst a contract of employment and a statement of employment particulars are two different things, most organisations will incorporate the Statement of Employment Particulars into their contract of employment cover off this requirement. The Statement of Employment Particulars, must include certain pieces of information, including:
- Names of employee and employer.
- Start date and detail around continuous service.
- Salary and regularity of payment.
- Hours of work
- Holiday entitlement and sick pay
- Notice period to terminate the contract.
- Job title
- Place of work and the address of the employer.
- Probationary period
It is permissible for an employer to refer to alternative information within this document in certain cases but only where this information is ‘reasonably accessible’, such as on a company intranet website or in an employee handbook.
In practice, for most organisations it makes sense to incorporate the statement of employment particulars into a wider contract of employment so that all terms and conditions relating to an employee’s employment are all in one place.
The law relating to contracts of employment is highly complex, so why not let HR Overload help? We can provide detailed, and bespoke contracts of employment to protect your business and provide clarity to your workforce. Alternatively, if you already have an existing document in place, we can review this to ensure it is legally compliant and provide advice on any changes that would help protect your business. To get in touch and see how we can help contact email@example.com or visit our website www.hroverload.co.uk.