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A contract between an employee and their employer forms the basis of the employment relationship and states the rights and duties of both parties. An employment contract can be either written or verbal. Even though a verbal contract has the same legal authority as a written contract it is hard to prove if there should be a dispute further down the line, so our advice would always be to provide a written contract of employment which is agreed and signed by both parties.
Don’t be put off by paperwork. We understand that contracts take time to prepare, but they really are a crucial foundation for building a mutually trusting relationship by outlining clear expectations and responsibilities which both the employee and the employer must adhere to.
A change in the law
Currently, an employer must provide an employee with a statement of terms of employment within 2 months of their start date, this details only the basic terms and conditions such as:
Job title
Salary (including overtime pay)
Hours of work
Benefits, such as sick pay, pension details and holiday entitlement
From April 2020 it became law that an employer must provide a statement of terms of employment from an employee or worker’s first day. In addition, the list of mandatory information to be included in the statement will expand.
What needed to be included from April 2020?
All contracts include a mix of express terms and implied terms. Express terms are things like pay, hours and holiday entitlement and are specifically stated, either spoken (usually at the interview stage) or in writing. The implied terms refer to issues that are obvious to maintain a trusted and respectful relationship between employer and employee. These may not necessarily be spoken or written but are considered to be part of the contract, for example, to be provided with a healthy and safe environment in which to work in, not to steal from the organisation and so on.
From April 2020 all ‘workers’ (employee, worker, including those on casual or zero hours) are to receive a statement of terms of employment on or before day one of starting work, this should now include:
Names of the employee and the employer
The start date and reference to continuous employment
If the role is a fixed contract, the contract must state the end date
The job title together with a description of the role
The place and hours of work to include the days of the week to be worked and, if and how hours or days may be varied
Specific details about working abroad if the employee is requried to do so for more than one month
Probationary period if applicable (the employer has the right to extend this if necessary)
Salary (to include instances when the employer can make deductions)
Scale and rate of pay or the method of its calculation, and the intervals of payment
Details of eligibility for holiday entitlement, how pay is calculated and provisions in the event of termination of employment
Details in relation to sickness pay and any other periods of paid lave
Details surrounding other benefits, not just pension and holidays
Notice periods (this part of the contract should also detail what constitutes misconduct and instances when a notice period from the employer will not be given)
Training requirements.
It is good practice to clearly set all the terms applicable to the individual and their role and for the contract / statement to be given to the employee even before they take up their position. Taking this action will help to avoid any uncertainty or dispute.
An employee may bring a claim in an employment tribunal for breach of s.1 of the Employment Rights Act 1996 if a contract/statement of terms of employment is not provided within the timescale; is incorrect; or not kept up to date.
Review employment contracts regularly
Employment law changes frequently so it pays to keep abreast of what is going on and regularly review contracts to keep both parties protected. Ensure that any changes and the reasons for them are fully communicated to employees, whether or not you need their consent.
Things to consider when reviewing contracts include employee status, equal pay, minimum wage, part-time and fixed-term working, flexible working, working hours and parental leave.
Making changes to contracts
Changes to the terms within a contract of employment should only be made following consultation and with the agreement of the employee. Changes might be in relation to hours, pay, pension, redundancy, health and safety issues, works councils and transfers of business.
It is important to check the employment history before proposing any changes, for example if the employee has been subject to a TUPE transfer it may be more difficult to vary their contract.
How we can help you
If you’d like to discuss any of the issues detailed in this blog, get in touch with us today. We’re here to help.
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