Employment Contracts for Businesses

It  is a mandatory requirement of the Employment Rights Act 1996 that a certain amount of information is presented to an employee in writing.

Whilst employers can stick with that, T G Baynes recommends that all terms and conditions of employment are put in writing to avoid any misunderstandings and, in the event of any breaches or disagreements, there is a document agreed between the parties which helps the parties or a Judge determine the problem. It is preferable, though not absolutely necessary, for such contract to be signed by both parties.

In addition to the contract terms agreed between the parties, it is also advisable for employers to provide (or make available) a staff handbook containing various policies and procedures ranging from health and safety, disciplinary and grievance, use of computer systems and other matters of conduct. For a more detailed discussion in respect of this, please click here.

It is of course possible for contracts to be partly written and partly verbal but any verbal variations or arrangements should be, as a matter of good practice, followed up in writing. 

Implied Terms

If a written or oral contract does not deal with particular matters, a court can imply certain terms into a contract (not always what the parties want or intended) and some rights and terms can be implied by law (often through European Legislation such as breaks and rest periods, continuity of employment, paid annual leave, right to request flexible working and so on). 

Common implied terms as to employee duties are:-

1. a willingness to work;
2. a reasonable ability to do the job;
3. taking reasonable care in the performance of their duties;
4. obeying lawful and reasonable instruction;
5. good faith which includes not competing with the employer whilst in employment, maintaining confidentiality whilst in employment, being honest, not making a secret profit from the employment and notifying the employer of wrongdoing on your own or another’s part; and
6. in the absence of an express term, the giving of reasonable notice to terminate the relationship (what is reasonable depends on all the circumstances and is also subject to a statutory minimum)

Common implied terms as to employers duties are:-

1. payment of agreed wages;
2. take reasonable care of their worker’s health and safety;
3. grievances will be promptly and properly dealt with;
4. treat its employees with mutual trust and confidence;
5. settle expenses incurred in the proper course of employment;
6. if a reference is to be given (and there is no obligation to provide one) that its content will be true and fair; and
7. in the absence of an express term, the giving of reasonable notice to terminate the employment relationship (there is a statutory minimum that should be borne in mind).

It is possible to import terms agreed in Collective Agreements between employers and Trade Unions as well or from Workforce Agreements.

Express but Unenforceable Terms

Certain terms are unenforceable and whilst they might appear in the contract will not be upheld by a Court. These include terms which are illegal or contrary to public policy, terms which are discriminatory, attempts to contract out of applicable legislation, terms which restrain trade (this is a difficult area please see discussion here) and certain terms which restrict an employee’s right to take industrial action.

Written Statements, S.1 Employment Rights Act 1996

The statutory minimum information to be given is what is known as a Written Statement. It must contain the following information:-

1. identify who the employer is and who the employee is;
2. identify the start date of employment and date of continuous employment;
3. provide job title;
4. provide place of work;
5. identify hours of work;
6. provide details of payment - when and how much;
7. confirm holiday entitlements

The following needs to be referred to and available elsewhere if it is not contained within the written statement:-

1. information relating to sickness;
2. information relating to pension;
3. disciplinary rules and dismissal and disciplinary procedures

The above information must be provided to an employee within 2 months of the commencement of their employment. If the employee is required to work overseas for more than a month within the 2 month period, the statement must be provided to them before they leave the UK. 

If there are changes to the statement then those changes must be reflected in the statement and provided to the employee within 1 month of making those amendments. 

If the Employer does not provide a written statement or provides an incomplete or inaccurate one then the Employee can ask the Employment Tribunal to make a determination. It is also possible for an Employee who seeks to claim Unfair Dismissal or raise a claim against their Employer for discrimination to seek damages for the Employer’s failure to provide a statement at all, an inaccurate or incomplete one. Those damages can be between 2 - 4 weeks pay (subject to a statutory cap).

Other Contracts

There are many types of contract between a business and an individual. The relationship may not be one of an Employer/Employee but of a Worker, Agency, consultant or sub-contractor. We at T G Baynes, draft and interpret many types of contract and can assist you in drafting, negotiating or challenging any contracts.