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Employment Contracts by Kidwells Solicitors

Category: Business Matters

Added 3rd February 2015. Updated 24th March 2016

Do I have to have a written contract for my employees?

The short answer is yes and it is a legal requirement that you do!

Section 1 of the Employment Rights Act (ERA) 1996 states:-

“Where an employee begins employment with an employer, the employer shall give to the employee a written statement of particulars of employment.”

This written statement is to be given to the employee “not later than two months after the beginning of the employment.”

What happens if I don’t do this?

The legal consequence of not providing the written statement or giving one that is inaccurate, is that an employee could apply to an Employment Tribunal for a declaration as to what is or should be the terms of the employment.  In some cases failing to provide the written statement can lead to an Employment Tribunal making an award of two or four weeks’ pay.

Not providing a written contract though can also lead to uncertainty about exactly what has been agreed about the employment and can mean that the employer and employee lose an opportunity to record additional terms that either one or both would benefit from.

Even if you don’t have a written contract in place there will still be a contract between you and the employee. The employee will still have certain legal rights and terms such as finishing early on Friday’s can become contractual terms by ‘custom and practice’  if this happens regularly enough. Changing terms for existing employees should be done with caution and hopefully their agreement.

What should the written statement include?

The ERA sets out the minimum information that must be provided to the employee. Some such as the names of the employer and employee, place of work, job title or a brief description of the work, the start date for the employment, pay and hours are obvious contenders for inclusion. There are others that must also be included such as sick pay arrangements, notice and information about disciplinary and grievance procedures.

A bit less obvious is information about working outside the UK, contracting-out certificates and pension arrangement and details of any collective agreements directly affecting the employment. Not all of these have to be provided in a single document.

Is this all I should put in a contract?

The minimum legal requirements are perhaps best seen as the starting point for a contract. A contract can do so much more. Terms that are contained in the contract are by definition ‘contractual’ and breaching these terms can have serious consequences. Other terms that might be included could be:

  • To set out any terms for using company vehicles.
  • To set out any terms for use of equipment and to require return of your property when the employment ends.
  • To protect your confidential information during and after employment.
  • To set out the terms of any help towards training costs and when repayment of some or all of those costs could be required.
  • Post- termination restrictions – to protect your business interests when an employee leaves by preventing them working competitively.

 

A well drafted disciplinary procedure may not be contractual as this could make it a breach of contract not to follow it in all cases, but it should include examples of what is not acceptable and what the consequences of misconduct are so everyone is clear on this.

Do I have to have a special contract for an apprentice?

An apprentice is an employee but the traditional form of apprenticeship was moderated by the Apprenticeships, Skills, Children and Learning Act 2009. In order to be an agreement regulated by that Act the apprenticeship agreement must:

  • contain the basic terms of employment required to be given to employees under ERA 1996, 
  • include a statement of the skill, trade or occupation for which the apprentice is being trained,
  • state that it is governed by the law of England and Wales, and
  • state that it is entered into in connection with a qualifying apprenticeship framework.

If you’re not sure what to include or whether your current contracts are suitable please get in touch for a no obligation chat.

Sarah Everton – Director – Employment Department at Kidwells Law Solicitors on 01432 278179 or by email at se@kidwellssolicitors.co.uk

This analysis may contain information of general interest about current legal issues but it is necessarily of a brief and general nature. It does not give legal advice and should not be relied upon as a substitute for specific professional advice.