Q&A: Employment contracts – the basics

Contributor - Jonathan Dale

Q&A: Employment contracts – the basicsJonathan Dale of Andrew Jackson solicitors explains employment contracts, what a written statement of employment must contain and the importance of honouring the terms of employment

At what point does an employment contract exist?

As soon as you offer someone a job - even verbally, if they accept. Contract terms can be verbal, written or implied, but having a written contract removes any doubt on either side about what is expected. If you don't give your employees an employment contract, you must at least provide them with a written statement of employment.

When must I provide a written statement of employment?

Within two months of the employee's start date. It's not an employment contract, but it details the key employment terms and conditions, which is useful should any disagreements arise, especially if the matter goes to an Employment Tribunal. If it contains all the information usually found within a written statement, issuing an employment contract is sufficient.

Must I provide a written statement to everyone who works for me?

No, you do not have to provide a written statement to independent contractors, freelancers and agency workers. If an employee goes to work abroad for you for more than one month within two months of their start date, you must provide them with a written statement before they leave.

What should I include within the written statement of employment?

Key employment particulars can be contained in a 'principal statement'. This can be part of the employment contract. The principal statement should include: your business name and address; employee name; job title; start date; pay; hours; holidays; place of work. In addition, a written statement must detail the employee's employment rights: sick pay provisions; period of employment; required notice period; details of any pension arrangements; information about dismissal, disciplinary and grievance procedures.

What if I don't provide a written statement of employment?

An employee can refer you to an Employment Tribunal, which they can also do if you don't get their agreement before changing their written statement. If an employee successfully brings another claim against you, you can also be made to pay further compensation for not providing a written statement of employment or changing terms with agreement.

What are the 'implied terms' of an employment contract?

Provisions that an employee can rightfully expect to exist without being expressed, such as a safe and healthy workplace. Other implied terms include that the employee should be honest and loyal, a relationship of trust and confidence between them and you, etc. Many rights - such as paid holidays, fair and equal treatment and National Minimum Wage - are statutory, so the employee also has the right to expect these.

Can I change my employees' contracts?

Not without their written agreement. Otherwise, they could take legal action against you for breach of contract - or resign and claim constructive dismissal. If you want to change a written statement, you must consult with your employees first. Explain to them the reason for wanting to make the change and seek their written agreement.

At what other times can I be guilty of breach of contract?

If an employee suffers loss because you don't observe the terms of their employment contract, a tribunal could award an employee damages. However, you might be able to make a counter-claim if your business has suffered as a result of the employee's failure to obey their employment contract terms.

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Jonathan Dale

Jonathan has practised exclusively in the field of employment law for 20 years.