Why You Should Provide Written Contracts of Employment
The relationship between employer and employee is based on the law of contract. However, unlike some types of agreement, only certain aspects of a contract of employment are required by law to be in writing. This has been the cause of confusion and disagreement, and is one of the main causes of employment tribunal claims.
As they based on the law of contract, you can be forgiven for thinking that a contract of employment consists of only those things that are set out in writing between an employer and an employee.
In fact, contracts of employment often consist of these elements:
- The terms and conditions that have been agreed between the employer and employee;
- Terms and conditions that have been negotiated through a collective agreement;
- Terms and conditions that are set by legislation, such as the National Minimum Wage and the minimum number of paid holidays the employee is entitled to in year;
- Terms and conditions that have been established by custom and practice;
- Terms that are necessary to make the contract work. For example, if the employee is employed as a driver it is assumed that they will have a valid driving licence for that class of vehicle; and
- Terms that are too obvious to mention. For example, that the employee should act in good faith, and that the employer should have trust and confidence in the employee.
The first three items on the above list are usually written terms expressing the agreement of the parties. Whereas, the last three items are terms that are implied into the agreement.
Written statement of employment particulars:
It is a legal requirement to give your employees a written statement of certain particulars of their employment. This statement must be given with two calendar months of them starting work. The statement, which can be contained in more than one document, must give the following information:
- The business’ name and address;
- The employee’s name, job title or a description of the work they will do, and the date on which they will start work;
- If a previous job counts towards a period of continuous employment, the date the period started;
- How much, how often, and how an employee will be paid;
- Hours of work (and if employees will have to work Sundays, nights, and or overtime);
- Holiday entitlement (and if that includes public holidays);
- Where the employee will be working, and whether he or she might have to travel for work; and
- If the employee works in different places, where these are.
The most convenient way to provide this information is in the contract of employment, which means the contract of employment must be provided within the above time period.
A written statement must also contain information about:
- How long a temporary job is expected to last;
- The end date of a fixed-term contract;
- Notice periods;
- Collective agreements;
- Pension provisions;
- Who to go to with a grievance;
- How to complain about how a grievance was handled; and
- How to complain about a disciplinary or dismissal decision
What a written statement does not need to include:
The written statement does not need to cover the following, but it must say where the information can be found:
- Sick pay and procedures;
- Disciplinary and dismissal procedures; and
- Grievance procedure.
As an employer, it is good practice to:
- Give each employee a written contract of employment that sets out the terms and conditions of employment agreed between you and employee, including sick pay and procedures. The best time to provide the contract of employment is when making the job offer so that the terms on which the employment is offered are clear; and to
- Have an employment handbook that sets out your policies and procedures, including your disciplinary and dismissal procedures, and your grievance procedure. The employee need not have their own copy of your employment handbook, but they must have reasonable access to a copy.
The policies and procedures in your employment handbook will reflect statutory procedures and entitlements, such as maternity and adoption leave, parental leave and shared parental leave, and a policy on requesting flexible working. It will also include your policy on the acceptable use of I.T. equipment, the use of company vehicles, and reclaiming expenses, amongst may others.
The written contract of employment will, in addition to the information you are legally required to provide, include other provisions of a contractual nature. These might include the benefits you provide, such as payment of salary or wages during sickness, life assurance, private medical insurance, personal use of a company vehicle, and a bonus scheme.
The contract ‘starts’ as soon as an offer of employment is accepted.
It is always best for contracts of employment to be writing. Having written agreements avoids potential confusion and disagreement about what terms and conditions of employment were, and were not agreed. Providing your employees with a written contract of employment also removes one of the main causes of employment tribunal claims.