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Drafting an employment contract
It goes without saying that when an employer takes on a new employee or a new worker, an employment contract should always be in place that clearly defines the tasks, responsibilities and the expectations associated with the job, including the salary and the terms of any bonus schemes. A correctly drafted employment contract, can help to alleviate future issues.
In this guide, we look at the different types of employment contracts, and the information you will need to provide when writing a contract. We also look at the terms of a contract and highlight common employment contract drafting errors, as well as the consequences of an incorrectly drafted employment contract.
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Why is it important to draft an employment contract?
An employment contract is vital when employing a new worker. It provides a legal relationship between an employer and an employee. It is also necessary to have this, both to clarify the role and in case of any future disputes that may occur related to the employee’s salary, their resignation, or even their termination. It also clarifies to the employee what their duties are, both during their term of employment and any restrictions that may follow when their employment with a business has terminated, such as a “no-poaching” clause.
Do you need assistance with an employment contract? Contact us today for assistance.
Types of employment contracts
There are various types of employment contracts to consider, such as a fixed-term contract, in which the employee is to be employed for a defined period which is agreed in advance with the potential employee before undertaking the employment. This type of contract is common for employees engaged to cover the leave of absence of another staff member or when completing a certain project or task that has a fixed completion date. During the course of the employment, the worker will be treated as a full-time member of staff and, should the fixed-term contract exceed two years, they will gain the same redundancy rights as a full-time employee whose employment is open-ended.
There are also full-time or part-time contracts, which have no time limit and apply for an indefinite period (otherwise known as a permanent employee contract). This is the most common kind of contract and entitles employees to a range of rights including statutory paid holiday leave.
Zero-hours contracts have become increasingly common, wherein an employee works on an ‘on call’ basis and does not have a set number of hours to work.
You may also encounter a temporary employment contract, which is likely to be used where an employee is required for a short period, but there is no known end date to the employment. This can be used to cover short periods of time where there is an increased workload - a company may be busier than normal and require extra staff members, for example during the Christmas period. This contract differs from a fixed-term contract in that it has no fixed end date, but its termination provisions will allow for termination on notice.
Are you resolving a dispute with an employee in regard to their employment contract? Find out how we can help here.
What must you provide in writing in a contract?
An employment contract requires certain things to be provided in writing. Anyone who can be classed legally as a worker has the right to written terms which include their job title, address, pay, holiday pay and annual leave provision, as well as information regarding a notice period, if applicable. Aside from the written terms, a contract or offer letter will also generally include the job offer itself, the method of payment and the standards of behaviour and dress code the employee will be expected to adhere to.
The inclusion of workplace policies and procedures is helpful as it gives the employee a good idea of what is expected of them and will reduce confusion and disparity between expectation and performance. It will also help them to adapt to their new position.
Giambrone & Partners’ employment lawyers are here to assist if you need guidance on drafting an employment contract.
Terms of a contract
There are several terms or clauses that go into a contract of employment, It must include pay and working hours, which are considered express terms; this means that they must be made clear and explicit in the contract. However, there are also implied terms that cover the right to equal pay and duties, as well as the duties of mutual respect.
You must also consider incorporated terms, which refer to terms that are also included in the staff handbook which forms part of the company policy.
Finally, the statutory terms must be taken into account. These cover terms that are enforceable by law, such as the right to minimum wage or a set number of holiday days or sick days laid out in national law.
Common employment contract drafting errors
When drafting an employment contract, there are some common errors can occur. For example, you may find that your employment contract lacks compliance with statutory obligations. Employees may also find that indefinite employment can be disguised as fixed-term contracts, or that the contract has not provided for obsolescence. Many employment contracts use fixed-term agreements incorrectly, allowing the employee to work longer than the agreed date without updating the contract to reflect a change in terms.
What are the consequences of drafting an employment contract incorrectly, or not providing a contract?
Failing to include the correct information can lead to problems further into the employment such as misunderstandings with pay, holiday and other terms of the contract. This can cause serious disputes between an employer and an employee. If employees are not aware of the behaviour and dress code expected, overtime payments or payment for sick leave, the lack of clarity can lead to disputes which can escalate into the employment tribunal or at the very least require alternative dispute resolution. Both of which are time-consuming.
Getting help with drafting an employment contract
When drawing up an employment contract or a written statement related to an employee or a worker of any kind, without legal guidance is unwise and can lead to ommissions that in turn can lead to legal disputes with staff in the future. When drawing up an agreement you may consider contacting Giambrone & Partners employment law team. Our employment lawyers can advise with all aspects of employment contracts, from assistance in drafting a contract to alternative dispute resolution or representing you in the Employment Tribunal.
Our experienced employment lawyers have wide-ranging knowledge of employment contracts and policies, and can support you with both contentious and non-contentious employment issues.
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