If you run a business, then there will probably come a point where you start to employ staff members. This can be a great step towards your business growth and can be incredibly rewarding, but it is also a complicated process that needs to be handled correctly. Employment law can be a complex area when it comes to running a business, and one of the most important aspects of this is having thorough, valid and legal employment contracts in place for everyone who works for you. This is essential in protecting both your business and your employees.
At LoveDays Solicitors we have a team of experts in employment law. We can offer in-depth advice and guidance on putting together employment contracts as well as dealing with any issues that might arise as a result of any employment issues. In this article, we take a look at the types of employment contract that you might want to use and what a good employment contract should include.
Overview of Employment Contracts
In the UK, it is a legal requirement for all employers to have a contract of employment in place for their employees. This is also something which makes good business sense as it gives you an opportunity to lay down any ground rules and conditions that might form a part of that employment.
This employment contract means that both parties are aware of what their obligations are and what they are agreeing to before any work is undertaken.
A contract of employment must include certain things, including the name and address of the employer and the employee, and the nature of the employment itself. There should also be details relating to the date on which the employment began and the scale or rate of any remuneration.
You should outline when they will be paid, what their hours of work will be and any holiday and sickness entitlements. In addition to this, the contract should explain the appropriate medium and method to terminate the contract, both for the employee and the employer.
This should all be made extremely clear, and any employee should have the opportunity to look through the contract in detail before they agreed to sign it. Once the contract is signed, the employment and the terms within it are binding.
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Types of Employment Contracts
There are a number of different types of employment contracts that you might want to make use of. A permanent employment contract offers job security and stability for the employee as it does not have an expiration date. This means it is a long-term agreement that continues until either the employee or employer decides to terminate the employment.
Alternatively, temporary employment contracts can be offered for employees who are only required to do a job for a limited amount of time. This should be clear to the employee when they are taken on and they should be advised on how long the contract will last for.
A full-time contract tends to be offered for permanent positions and sets out the employee’s hourly wage or salary as well as holiday entitlements, pension benefits, parental leave allowances, statutory sick pay details, and the statutory minimum length of rest breaks.
Whilst there is not a minimum number of hours required for a contract to be considered full time, most employers view full time work as being 35 hours a week or more. Part-time contracts tend to cover any work which spans less time than this, but the terms of the contract will be similar.
A zero-hour contract can be offered if the employee is on call to work as and when they are needed. In this situation, you will not be obligated to give them minimum hours, but they also do not have to accept the work that you offer. Most zero-hour contracts give workers employment status as well as the right to claim statutory annual leave, minimum wage and any basic health and safety provisions. If someone who works for you has a zero-hour contract, you are not able to stop them from looking for work or taking on additional work elsewhere.
Key Elements of an Employment Contract
Written Statements and Verbal Agreements
When anyone starts work, an employer must give them a written statement of employment particulars. This is not an employment contract and should be made-up of the main document, known as the principal statement and a wider written statement.
The principal statement needs to include all the details of the employer and employee, including their job title and a description of their work start date. It will cover how much they will get paid, their hours of work, holiday entitlement and also where they will expect.
To be working on whether they will be required to relocate at any point. If an employee works in different places, the principal statement should list where these will be in addition to the employer's address. It must also outline how long a job is expected to last and if it is a fixed term contract it should state the end date.
There also needs to be information on any probation periods as well as any other benefits and obligatory training. The wider written statement will need to include details of any pension schemes, collective agreements and any other right to non-compulsory training that is provided by the employer.
There will also need to be details on the disciplinary and grievance procedures for the business. This differs from an employment contract, which may also include other clauses, a code of conduct and any business policies.
An employment contract can be agreed verbally through conversations. This is still legally binding, but it can be much harder to define what the terms are should there be any dispute.
Essential Clauses in Employment Contracts
There are a number of key clauses that need to be included in all employment contracts so that employees know exactly what the terms of their employment are. They should receive full details regarding their hours of work, their pay, holiday and sickness entitlements, as well as their rights to any parental leave. If a pension scheme is on offer at the business, then the contract also needs to detail what this is and what the employees options are relating to it.
An employment contract can also include a number of restrictive covenants such as non-compete clauses, non-solicitation clauses, non-dealing clauses and non-poaching clauses. These will cover how the employee is permitted to behave during their employment, as well as what their entitlements are after they leave. The contract may also include details regarding confidentiality.
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Legal Compliance and Best Practices
Ensuring Compliance with Employment Law
No matter what the size of your business might be or what industry you work in, it is essential that you comply with employment law at all times. This is a legal requirement and there can be some hefty penalties if you are found to be in breach of this. In order to ensure that you remain compliant at all times, you should seek the advice of an employment law solicitor, like those at Lovedays Solicitors.
We can offer clarity and guidance on a wide range of employment law subjects, and we can also help to put together employment contract templates for you to use. We can help to provide regular reviews and updates to any contracts in line with changes in the law as and when they happen, to ensure that you are always up to date with the latest regulations.
Best Practices for Drafting Employment Contracts
There are a number of different ways in which you might want to draft an employment contract, but there are certain best practices which should be adhered to at all times. It is essential that you use clear and unambiguous language at all stages throughout the contract. This means that all parties will be able to understand what the contract includes and there can be no disputes at a later date.
Whilst you can use contract templates to ensure that you have covered all the essential legal requirements, you should make sure that every contract is fully customised to the individual employee so that it makes reference to their specific duties, responsibilities and expectations. You should make sure that every employment contract that you issue at least meets the statutory rights set out by employment laws in the UK.
You may also include additional clauses that are relevant to your business or industry, but these must be fair and should not be deceptive at any point as they will not be deemed enforceable.
Common Issues and How to Address Them
Modifying Employment Contracts
There may be a point where you feel the need to modify one or all of your employment contracts, particularly if somebody has been in your employment for a long time. This may be due to a change in their role or to cover any new employment law requirements. It can therefore be a good idea to set some review dates so that contracts can be kept up to date on a regular basis.
If you do decide to update a contract, then it is essential that you communicate any changes to your employees and ensure that they understand what these mean. The change will need to be proposed and then discussed, and this may involve representatives from trade unions as well. The changes that you make must be agreed upon by both parties and should always be fair and reasonable. You cannot unilaterally impose changes without the consent of your employee.
Dealing with Contract Breaches
A breach of a contract of employment occurs when either the employer or employee breaks one of those terms. It's important to remember that not all of the terms of the contract are unnecessarily written down and so a breach may be a verbally agreed term, a written term or an implied term of a contract.
If you believe that your employee has breached their contract or they have accused you of doing so, then you should try and sort the problem out directly in the first instance. It is important that you follow all necessary policies regarding grievances throughout. It may be necessary to go through mediation or other dispute resolution matters to try and sort things out, but if this fails, it can resort to legal action or an industrial tribunal.
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How Lovedays Solicitors Can Help
Lovedays Solicitors have a Derbyshire based team of employment solicitors who are ready to assist you in drafting your contracts of employment and to help navigate any disputes or breaches of contract that may occur. We have an in-depth understanding of employment law and we have vast experience in working in this field.
Our team is available to help you understand what terms need to be included within any employment contract that you offer and can ensure that it meets all your legal requirements as an employer. We understand that employment law is something that continues to grow and change, and so we are here to assist you and offer ongoing support throughout the life and growth of your business.
This means that we can offer a regular review service to ensure that your contracts keep up with any changes to the law and are still continuing to meet the needs of your business and its employees.
We can also help with more complex aspects of employment law, such as negotiating employment contracts and dealing with any disputes that might arise.
We can help you to challenge any suspected breach of contract by your employee or defend any accusations that may come your way. We are committed to supporting your business and ensuring that it is always on the right side of employment law and so we can offer dedicated support to any aspect of your employment contracts through tailored solutions designed specifically for your business needs.
Conclusion
Employment contracts are essential in order to protect the well-being and rights of the employee whilst also ensuring that they work for the employer as well. This means there are key elements that need to be included in every contract, and it is also important to consider the type of contract that you want to offer, and any specific terms or clauses that need to be included. It is important to remember that employment contracts do not just need to include the right details, but they also need to be clear and unambiguous so that both parties can be absolutely sure of what is required of them.
It is therefore essential to seek the professional legal advice on offer from Lovedays Solicitors to ensure that your business is always compliant with the latest employment laws and to protect your business interests at all times.
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