Having a well-drafted employment contract is one of the most important documents in your business. This legally binding document, agreed by yourself and the employee, will outline the terms and conditions of employment, ensuring a mutual understanding of expectations.
Based on the Employment Rights Act 1996, employers must provide a written statement of employment particulars to all employees from day one.
In this blog, we outline the key elements that should be included in an employment contract, with a focus on the most important provisions.
What Should Be Included in Your Contract?
At a minimum, the contract should contain key information to ensure legal compliance and protect your business interests, including: the full names and addresses of both parties, job title and description, start date, place of work, holiday entitlement, sick pay entitlement, notice period, and other essential terms.
It must be provided to the employee no later than their first day of employment and be in writing; this can be as a hard copy or in electronic form, such as via email.
Key Clauses in Contract
Hours of Work
Your contract needs to set out the normal working hours or working patterns, including overtime if available. The hours outlined should not ignore the Working Time Regulations 1998. This means an average working week (including overtime) should not exceed 48 hours, averaged over a 17-week period.
The Working Time Regulations 1998 also state that employees have the right to a minimum daily rest period between each working day or shift (this is a period of 11 hours in a 24-hour period), along with a 20-minute break if working more than 6 hours in a day.
Pay
Details of the employee’s gross salary before tax, national insurance, and any other deductions must be included in the contract, along with confirming the agreed pay day.
Holiday entitlement
This section of the contract needs to state when the holiday year runs from, and how many days leave the employee is entitled to. It should also outline any periods of the year that are unavailable for holidays and confirm if bank holidays are included in your entitlement or if they are additional.
The contract should set out the rules around carrying unused holiday into the next holiday year and any provisions relating to unpaid leave too.
Pension
All employers are subject to the auto-enrolment duty and contracts should outline the particulars of your pension, or pension scheme and relevant contribution rates.
If additional documents provide further information, the contract should reference these documents accordingly.
Description of duties
A full and clear list of the employee’s duties and responsibilities must be provided. This reflects the requirement under Section 1 of the Employment Rights Act 1996 for the main terms of the contract to be set out in writing.
Workplace
This section indicates the primary location where the employee will carry out their work. It often gives the employer some flexibility to assign work at other locations in the future, within agreed limits. It’s also important to include the options for remote or hybrid working arrangements to make the employee aware.
Probationary period
It’s important to specify the length of a trial period for the employee. This enables you to evaluate the new hire’s performance, conduct, and overall suitability for the role.
Sickness leave
An employee contract must define sick leave terms, detailing if employees get paid beyond the legal minimum statutory sick pay and for how long. It should also state when a doctor’s certificate is needed, and whether the employee will receive statutory or contractual sick pay.
Notice period
This section sets out the length of time an employee is required to continue working after resigning, being dismissed, or facing redundancy. Failing to provide the proper notice may constitute a breach of the contract.
How We Can Help
Having a well-drafted and professional employment contract will protect both you and the employee by clearly outlining rights, responsibilities, and the expectations. If you need any advice on your contracts, contact our employment law team today for expert guidance. We’re always happy to help.
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Author
sarahrobinson@premier-legal.co.uk
Sarah Robinson is the Managing Partner and has specialised exclusively in employment law since qualifying as a solicitor in 1996.
Sarah has considerable experience of representing clients in many different industry sectors including insurance and financial services, corporate finance, technology, legal services, automotive, hotel and catering and media as well as the public sector.
Areas of particular interest include restrictive covenants, TUPE and advising in relation to discrimination.