Even though my employees are family members, should I issue them with a contract of employment?

Peninsula Team

September 27 2013

All employees are entitled to receive a statement of main terms of employment. Although employment law can sometimes apply differently to family members, there is no exception to the requirement to provide a statement of main terms based on being a family member. An employee becomes entitled to a statement after one month of commencement of employment, and they must receive it within 2 months of commencement. The statement of main terms is the vehicle for confirming the significant terms and conditions that apply the employee’s employment. The law prescribes what pieces of information need to be in the statement, including details on start date; pay; hours of work; entitlement to annual leave; place of work; pension etc. Other details can be provided in a separate document, for example, disciplinary and grievance procedures. Many employers use an employee handbook, to accompany the statement of main terms, for this purpose. Without this document, there may be a lack of certainty as to what the terms of employment actually are, which may be particularly damaging to either party’s position if they wanted to assert a breach, for example. It is not only the statement of main terms that governs the employment relationship, because the notion of a contract of employment is much wider than that alone. Terms can be express i.e. specifically written or spoken, or implied i.e. present through performance or obviousness. A contract can therefore exist in the absence of a written agreement but for clarity purposes, and in order to comply with the law, a written statement must be provided. If the statement is not provided within the timescales set out above, the employee will be entitled to make a claim to tribunal, and the tribunal can make a declaration to confirm the particulars of the statement. No financial recompense is available. However, if the employee brings a successful claim to tribunal, for example, forunlawful deductions, and at the same time tags on a claim for failure to provide a statement, the tribunal may award 2 or 4 weeks’ pay to the employee. Contact the Peninsula Advice Service for further clarification on this topic - 0844 892 2772. 

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