Employment Contracts

A woman signing a contractAll employees have an employment contract with their employer from the moment they accept a job offer. It’s an agreement that sets out the terms of employment and gives an employee’s:

  • employment conditions
  • rights
  • responsibilities
  • duties

It is good practice to write the terms down, for the sake of clarity, but they don’t have to be.

The overarching “contract” usually comprises a number of documents:

  • an offer of employment (sometimes referred to as a letter of appointment or offer letter),
  • a statement of particulars which is required on or before the individual starts work, and
  • a contract of employment which can be provided up to two months later.

Some employers combine all or some of these documents rather than provide three separate documents.

Both parties must stick to the contract until it ends (for example, by either party giving notice or with an employee being dismissed) or until the terms are changed (usually by agreement). When a letter of appointment (offer letter) is provided, it may incorporate some conditional terms to allow for receipt of employment checks such as the to right to work in the UK, qualifications required to undertake the role and references to be received and deemed satisfactory to the employer.

If a person has an agreement to do some work for someone (like paint their house), this isn’t an employment contract but a ‘contract to provide services’. Please refer to our guidance on employment status which can be found here.

An employer should make it clear which parts of the contract are legally binding and the terms could be:

  • in a written contract, or similar document like a written statement of employment
  • verbally agreed
  • in an employee handbook or on a company notice board
  • in an offer letter from the employer
  • required by law (for example, an employer must pay employees at least the National Minimum Wage)
  • in collective agreements- negotiated agreements between employers and trade unions or staff associations
  • implied terms – automatically part of a contract even if they’re not written down

If there’s nothing clearly agreed about a particular issue, it may be covered by an implied term – for example:

  • the employer providing a safe and secure working environment
  • a legal requirement like the right to a minimum of 5.6 weeks’ paid holidays
  • something necessary to do the job like a driver having a valid licence
  • something that’s been done regularly in a company over a long time like paying a Christmas bonus.

A written statement of employment particulars stating the main conditions of employment must be given to employees and workers when they start work.

Technically, the employer must provide the principal statement (statement of particulars) on the first day of employment and the wider written statement (contract) within 2 months of the start of employment. However, at HRWise we believe it is good practice to provide all of the relevant information prior to an employee starting work.

Employers must tell employees or workers about any changes to the written statement within one month of making the change.

The principal statement must include certain specified information:

On the first day of employment the employer must also provide the employee or worker with information about:

  • the employer’s name
  • the employee’s or worker’s name, job title or a description of work and start date
  • how much and how often an employee or worker will get paid
  • hours and days of work and if and how they may vary (also if employees or workers will have to work Sundaysnights  or overtime)
  • holiday entitlement (and if that includes public holidays)
  • where an employee or worker will be working and whether they might have to relocate.

If an employee or worker has to work outside the UK for more than a month, the principal statement must also include:

  • how long they’ll be abroad
  • what currency they’ll be paid in
  • what additional pay or benefits they’ll get
  • terms relating to their return to the UK

Certain additional information must also be provided. This can be included in the principal statement (statement of particulars) or be provided in a separate document. If it is in a separate document, this must be something that the employee or worker has reasonable access to, such as on an intranet:

  • if an employee or worker works in different places, where these will be and what the employer’s address is
  • how long a job is expected to last (and what the end date is if it’s a fixed-term contract)
  • how long any probation period is and what its conditions are
  • any other benefits (for example, childcare vouchers and lunch)
  • obligatory training, whether or not this is paid for by the employee
  • For employees, it must also include the date that a previous job started if it counts towards a period of continuous employment in some cases a company will recognise service with another company when calculating continuous employment.
  • sick pay and procedures
  • other paid leave (for example, maternity leave and paternity leave)
  • notice periods

Employers must give employees and workers a wider written statement within two months of the start of employment. This must include information about:

  • pensions and pension schemes
  • collective agreements
  • any other right to non-compulsory training provided by the employer
  • disciplinary and grievance procedures

HR Wise provide an employee handbook and employment contracts (incorporating a statement of particulars) that comply with these requirements. They are regularly updated by an industry expert, so you don’t have to worry about keeping on top of things.

Please get in touch if you would like to enjoy affordable peace of mind in this respect.

Contains public sector information licensed under the Open Government Licence v3.0.

Leave a Reply

Your email address will not be published. Required fields are marked *