It is a common misconception that the contract of employment is the document that employees must receive within 2 months of commencement of their employment. Whilst this document, known as a statement of main terms, makes up part of the contract of employment, it is not the only element of a contract. In reality, the contract of employment is a notional concept, rather than one tangible document, that encompasses several different elements. This can include an employee handbook, policies, memos, letters etc.

The ‘statement of main terms’ (SMT) is generally the main document that sets out the terms and conditions governing an employee’s employment. The Employment Rights Act 1996 requires that the employer gives this document to the employee within 2 months of the start of employment. The law also stipulates certain pieces of information that must be included in that document. A long list is given of the required information, and this includes:

  • the name of the employer and employee and the employee’s job title;
  • the date that employment began;
  • details about pay and the frequency of payment;
  • holiday entitlement;
  • entitlement to sick pay;
  • details of applicable collective agreements;
  • information on disciplinary and grievance procedures;
  • notice periods etc.

If this statement is not provided, or it is not provided in full, the employee is entitled to make a claim to an employment tribunal for failure to provide the statement. The tribunal will make a determination on the particulars to be included, and may amend or substitute them.

If an individual brings a claim of failure to provide a statement at the same time as bringing another claim e.g. unfair dismissal, unlawful deductions, and is successful in that other claim, then the failure to provide a statement of main terms can carry an award to the employee of 2 or 4 weeks’ pay.

A tribunal may also make an award to an individual for failure to provide a statement when it becomes apparent, during a hearing of an unfair dismissal claim, for example, where they have not actually brought the specific claim of failure to provide, that a statement has not been provided.

Many employers use the statement of main terms as the document to include many other policies and procedures. In may be more advisable, however, to include all of those procedures in a separate employee handbook. The law permits certain of the required elements to be provided in a separate document that is accessible to the employee, for example, information on disciplinary and grievance procedures.

Just because a policy or procedure does not appear in the SMT or employee handbook does not mean that it is not contractually binding, and it will be open for employees to point towards their offer letter, or the job advertisement, as including contractual terms that they can rely on. This reinforces the wide scope of the notional contract of employment.

For further clarification on contracts of employment contact the Peninsula Advice Service on 0844 892 2772