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.