Contract of Employment
A contract of employment is an important document which is drafted between an employee and an employer. When recruited to a company whether it is a small business or a large corporation an employee should be issued with a contract of employment including their employment terms.
This document must be provided within two months of the employee starting employment.
Contract of Employment doesn’t have to be in writing although it is beneficial if they are. The more detailed a contract of employment is the greater protection it offers for both the employer and the employee. employment terms should include the duties and responsibilities of the employee so that they understand exactly what is expected of them.
At the very least, an employee should be issued with a statement of particulars in writing within two months of their appointment. Although it is not a contract, the document should include specific pieces of information such as;
- The Job Title
- The start date of employment
- Hours of Work
- Place of Work
Employment Terms and Conditions
An employer cannot simply change the conditions of your contract of employment without your consent. This consent can be given verbally, in writing or it can be implied. If it is implied it means that you have continued to work with the new terms for a significant period of time while being aware of the change.
Implied consent could be working longer hours, taking on additional responsibilities or even working at a new pay grade for a period of time.
Within certain employment contracts employers can reserve the right to vary the contract terms when they wish to. If there is a dispute in relation to this, the courts have stated that a strict approach should be taken when interpreting any of these provisions.
If the employer wishes to include any conditions which allow them to alter the terms of the contract they must clearly state their intentions in plain language. This ensures that employees are adequately protected.
If the employer fails to do this they can be vulnerable to a breach of contract claim if they decided to vary the terms of the contract which would have a significant bearing on your rights as an employee.
As an employee you may have a valid claim for constructive dismissal if the employer decided to reduce your pay or moved you into an alternative position which was significantly different from what was originally stated in your employment contract when you were appointed.
Provided that you can prove that your new responsibilities were significantly different from your original contract of employment, you may have a claim.
If your employer does decide to alter the terms and conditions of your employment, you are under no obligation to accept them. If you do not accept the terms, an employer may dismiss you and then re-employ you based on new and acceptable terms.
However this is a huge risk for any business to take because it can leave them wide open to a claim for unfair dismissal, particularly if they have not followed procedures to the letter.
Now that you have a basic understanding of how contracts operate and when they can be changed, its important to understand what information they should contain.
Contents of a Contract of Employment
Any contract needs to include the names of all parties involved. In terms of an employment contract it should clearly state the name of the employer or the business name and personal details of the employee such as their full name and postal address.
Including a start date is important and will often include a short paragraph to state that any employment with a previous employer does not count towards the various rights which are afforded to employees after one or two years service.
There are exceptions to this rule if for example there has been a merger or acquisition. In this instance employee rights will remain the same.
Job Title and Description
The job description and title of the post will usually be included in this section and should be the same as the job that was advertised. Many employers will also include a term here that states they can ask the employee to carry out any other duties which are commensurate with the seniority of the post.
This provides a greater degree of flexibility if the employer wants the employee to carry out additional duties.
Although not always included, the employer may wish to state the location where the employee will work. It also enables the employer to state where the employee may be asked to work in the future.
Hours of Work
Usual working hours are stated in this section but the employee should also agree to work additional hours if the employer requires them to. Nevertheless an employer cannot expect an employee to work more than a 48 hour week in accordance with the Working Time Regulations unless an employee has specifically opted out.
In certain organisations there is a probationary period and the length of this is at the discretion of the employer. Where a probationary period is used the employer can include an option to give the employee a short period of notice if it transpires they are unsuitable for the role. Probationary periods can also be extended where necessary.
This section will detail the employees salary before tax and any other deductions and will state when payment will be made and the frequency
An employee is entitled to a certain amount of annual leave each year. This section will also state the dates that annual leave will run to and from. Some employers can stop employees from taking annual leave during busy periods or other times of the year in certain industries such as retail or hospitality.
A holiday clause in the contract should also detail how many days leave the employee is entitled to and whether public holidays are included in this allowance. Details about whether annual leave can be carried over into the next year should also be outlined here.
Absence due to sickness can prove costly for businesses. When an employee is unable to attend work due to sickness, this section of the contract will state when the employee must contact the employer to notify them of sickness.
Sickness absence information should also state when a doctors certificate is necessary and whether the employee will receive contractual or statutory sick pay.
When an employer or employee wishes to terminate their contract, a notice period must be given. The contract of employment should state how an employee or employer can terminate the contract and the length of notice that must be given.
Within this section you will also find information about what an employer would deem as gross misconduct which allows the employer to dismiss them without implementing the required noticed periods.
In accordance with Section 1 of the Employment Rights Act 1996 employers are obliged to clearly define the terms of the contract in a separate schedule. This is so that an employer or an employee can refer to this if they need to review the main terms of the contract
As well as the above employers may decide to include the following sections in the contract;
Pensions – What arrangements have been made for a workplace pension.
Grievance and Disciplinary procedures – What the employee can do if they have a grievance or how the employer can initiate disciplinary procedures
Retirement – Guidance on the age of retirement and what polices are in place
There is no doubt about it, employment contracts are very important. They help to safeguard the interests of all parties, both the employer and the employee and clearly outline the roles, responsibilities and obligations leaving no room for ambiguity.
About the author:
This article was written by a member of the Expert Answers legal advice team. Expert Answers provides online legal advice on all aspects of UK Law to users in the United Kingdom.