Strong employment contracts are at the heart of every successful business. If done right, they can provide protection for the business and its employees.

However, if they are either not provided at all or done wrong, they can cause trouble and leave your company susceptible to legal claims.

In this Q&A, Paul Burton, Employment Partner at Frettens, outlines how to write strong employment contracts, what to include in them and how to protect yourself from claims.

Is a contract of employment a legal requirement?

In the UK, employers are legally required to give a ‘written statement of employment particulars’ to any employee or worker, who is set to work for the company for more than one month, before they start.

This written statement is the legal minimum, and therefore doesn’t include all of the terms that you would normally find within a good employment contract.

The written statement’s main purpose is to protect the employee with its terms, rather than the employer.

Although it’s not a legal obligation, we would strongly recommend providing all employees with a full contract of employment, to protect you and your company. I outline all of the terms that should be included to protect the employer later in this article.

What are the statutory terms of employment contract?

The written statement of employment particulars needs to include:

• A principal statement – this will usually include an employee’s:
  • Job title
  • Date of employment
  • Rate of pay
  • Working hours
  • Sick pay
  • Notice periods
  • Any remote working provisions
  • Termination conditions
  • Holiday pay
  • Pension provision
• Information on how disciplinary and grievance issues will be dealt with
• The policy for working abroad, where applicable

These statutory requirements provide both you as employer and your employee with a clear understanding of what is expected of them.

Its important that these terms are included, and that they are within the legal requirements (for example, pay is equal to or above the National Minimum Wage), to ensure the contract is valid and enforceable.

If the contract is breached by either party, the other party may be eligible to bring a claim for breach of contract and the employee/worker may have a number of other claims as well, examples being unfair dismissal, unlawful deduction of wages and discrimination.

Related: The importance of getting the dismissal process right

What other terms does an employment contract need to include?

Whilst not necessary legally, other terms a good employment contract may include are:

• Reporting line
• Detail of duties (often in an appendix or schedule)
• Probationary period
• Expenses rules
• Confidentiality
• Intellectual property
• What deductions can be made
• Family friendly rights, e.g. maternity, paternity, adoption, flexible working and time off for dependents
• Restrictions during and after employment

How to write a contract of employment

Writing a contract of employment can be a difficult task to take on, especially if you’ve never written one before or you want to include some more complex terms.

You obviously need to include the statutory requirements in any contracts, as set out earlier in this article, and could benefit from including the optional terms that we also suggest.

There are loads of templates available online, some good, some not so good. You may or not find these useful, it depends on your circumstances!

Having an experienced lawyer review an employment contract that you’ve written, or assist you in writing one, is a sensible option that can ensure your business is protected.

We’d be happy to do this for you. You can get in touch here.

What other contracts does a business need?

In addition to strong employment contracts, a business that is just getting started will need a variety of other legal contracts and agreements to provide maximum protection from claims.

New and experienced businesses could benefit from introducing, reviewing and updating the below:

• Terms & Conditions
• Partnership Agreements
• Shareholder Agreements
• LLP Agreements
• Intellectual Property
• Confidentiality Agreements
• Commercial Leases
• Loan Agreements

If you want individual advice on any of the above, please click on the links to be diverted to the relevant help page.

You can read this full article here, or get in touch with our Employment Team on 01202 499255 for a free initial appointment.