Contract of Employment

Every employee that works for a business will work under a contract of employment. A contract of employment will have terms implied into it at common law, by custom and practice and also by statute.

In addition, a contract of employment must have minimum express terms in it i.e. terms and conditions stated in writing. The requirement arises under section 1 of the Employment Rights Act 1996. These details include:-

  • the names of the employer and employee
  • the date when the employment began
  • the date on which the employee’s period of continuous employment began
  • the rate of pay
  • intervals at which pay is made
  • the hours of work
  • the holiday entitlement
  • entitlement to sickness pay
  • entitlement to pension
  • the notice period
  • job title
  • place of work
  • whether any collective agreements affect the employee
  • disciplinary and grievance procedures

The above must be given to the employee not later than 2 months after the beginning of the employment.

Whilst there is such a minimum requirement, it is good practice to include further terms and conditions for certain employees for the sake of clarity.

Further terms and conditions could include for example:-

  • A Bonus and/or commission clause
  • A lay off clause
  • A mobility clause
  • Restrictive covenants to prevent the employee from working for competitors, poaching staff etc
  • A confidentiality clause
  • Details of any other benefits such as company car, mobile telephone etc
  • A probationary period

Ensuring from the outset that the contract of employment is clear, concise and comprehensive is likely to minimise any complications and disputes further down the line.

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