Contracts of Employment

Contracts of Employment2021-08-07T15:20:54+01:00
Do I have to give my employees a contract of employment?2021-08-06T16:52:50+01:00

As an employer, you are required by law to give your employees a written statement of the main terms and conditions of employment. You may choose to go further by giving them a more detailed contract of employment. This can provide additional details of terms and conditions and provide greater protection for the employer.

When do I have to give my employees a contract of employment?2021-08-07T15:22:57+01:00

You must give your employees a written statement of the main terms and conditions of employment on the day they start to work for you.   This applies even if they are on a temporary contract.  There is no benefit in delaying issuing the contract – in fact, the sooner you issue it, the sooner they are bound by the terms and conditions.

What information should be in a contract of employment?2021-08-07T15:33:36+01:00

There is some essential information that you will need to include within the statement of main terms and conditions.

  • The name of the employee and of the company employing them
  • Their job title – full details of the job do not need to be included
  • The date when the employment began and start date of continuous employment, if different
  • The intended duration of the employment if it is not permanent
  • The employers address and the place of work
  • The rate of pay and the intervals at which it is to be paid
  • The hours of work
  • Holiday entitlement and pay
  • Notice required by each party to end employment
  • Details of any probationary period and any conditions relating to it
  • Any training the employee must complete and whether or not the employer will pay for it
  • Whether the employee will work abroad
  • Reference to any relevant collective agreements.

You should also provide details of the following, although these may be provided separately:

  • Sick leave and pay entitlements
  • Any other paid leave
  • Pensions and pension schemes
  • Disciplinary and grievance procedures, including appeals procedure.

Many employers will refer to these in the contract of employment and include more details in an employee handbook.

Should I give my casual workers a contract?2021-08-06T16:53:59+01:00

Casual workers may not be classed as employees if they are not obliged to work any fixed hours or to accept work if offered. However, if the period of work is longer and there is an obligation to accept work, they may be classed as an employee and be entitled to additional rights. It is a good idea to have contract in place to clarify the working relationship and, if genuinely casual, to make clear that each period of work is a separate employment.

What is a probationary period?2021-08-06T16:55:09+01:00

A probationary period is sometimes agreed at the start of employment. It usually lasts between 1 and 6 months, depending on the complexity of the role. During this time, the employee’s performance and suitability for the role will be assessed. At the end of this period, employment is either confirmed or terminated.

It is beneficial to give the employee feedback during the probationary period to give them the best chance of succeeding in the role. It also means that there are no surprises at the end of the probationary period.

Different terms and conditions may apply during the probationary period, such as notice period and access to benefits.

How long should a probationary period be?2021-08-06T16:55:53+01:00

A probationary period will typically last between one six months, although there are no set rules on the duration.

What notice period do I need to give my employees?2021-09-02T14:05:07+01:00

You must give your employees at least the statutory notice period which increases with length of service:

  • Up to one month’s service – no notice required
  • Between one month and 2 years’ service – 1 week
  • Over 2 years’ service – 1 week per completed year of service to a maximum of 12 weeks

You can have a longer notice period which should be set out in the Contract of Employment.  This might be particularly relevant if a person has particular skills that may take some time to replace.

What notice do my employees have to give me when they leave?2021-09-02T14:07:59+01:00

The law doesn’t set out the notice that an employee is required to give their employer, it just states that “reasonable notice” should be given.  This is usually taken to mean a week.

You can require a longer period of notice, in which case you should include this in the Contract of Employment.

Can I pay employees who are leaving or do they have to work their notice?2021-09-02T14:08:24+01:00

If you want to have the option to pay employees for their notice period rather than have them work it, you should include a PILON (pay in lieu of notice) clause in the contract.

If you pay a departing employee in lieu of notice, their employment ends on the day they stop working for you, not at the end of the notice period.  So, for example, if an employee has a 4-week notice period and you decide to pay them in lieu of notice on the day they resign, the employment ends on that day and not in 4 weeks time.

What is Garden (or Gardening) Leave?2021-09-02T14:12:09+01:00

If someone hands in their notice but you don’t want them to work their notice period, you may want to put them on Garden Leave.  This means they continue to be employed by you until the end of the notice period but are not required to work.

Garden Leave is most commonly used with senior employees or sales staff, where you do not want them in the workplace but you don’t want to release them from their contract to work for another employer or set up in business themselves.

If you want the option of putting an employee on Garden Leave, you should include a clause to that effect in your contract.

Can I stop an employee going to work for a competitor?2021-09-02T14:36:55+01:00

You can include post-termination restrictions or “restrictive covenants” in the contract of employment.  However, these are designed to protect legitimate business interests and should not go beyond what is reasonably necessary to protect those interests.  They are not allowed to prevent or restrict competition in general.  This means that such clauses need to be carefully drafted and are likely to restrict the ex employee only from contacting or soliciting business from customers that he has personally had contact with.  They also need to be appropriate to the level of the employee  – more senior employees are likely to have access to more business critical information, which would justify more onerous restrictions.

Restrictive covenants that are deemed to be too wide or inappropriate for the person’s role are likely to be unenforceable.

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