A staff contract of employment
is an agreement between an employer and employee and is the basis of the employment relationship. An employment contract can contain both a written statement of terms and any other terms that have been agreed orally or have been implied in to the contract as they are necessary to make it work, such as the implied duty of mutual trust and confidence, or that are so obvious they do not need to be written down, such as an employee will not steal from the employer.
An employee becomes entitled to a statement of main terms after one month of employment - a legal requirement of the Employment Rights Act 1996. Anyone who will be with you temporarily for a shorter period than that is not entitled to receive one but it is best practice to provide one anyway so that everyone is aware of the terms and conditions which govern employment. Enforcement action can be taken by an employee who does not receive a statement within two months of their start date. Main terms need to be included within this such as (not an exhaustive list):
- The business’s name
- The employee’s name and job title or a description of the work to be carried out and a start date
- The amount of pay and how often they will receive this
- Hours of work including rights of overtime and holiday entitlement
- Sick pay provision
- Where the employee will be required to work
- Notice periods to terminate employment
- Pension entitlement
Details on disciplinary and grievance procedures
do not need to be included in the statement itself but can be provided elsewhere, as indicated in the statement.
An employment contract will include both the main terms and more comprehensive issues, such as job duties and responsibilities for each employer or more contentious issues like restrictive covenants so that the employment contract can be used to maintain a degree of control over the employee post-employment.
Employers should update employment contracts whenever this is required in instances where terms have changed, been added or removed on either an individual basis or because of a collective agreement. For example, this can occur in situations where there is an increase in pay, a decrease in hours or a change in job role and duties. Contracts can only be varied in this way when both parties have agreed to the changes and employers should give written notification of the changes within a month of them taking effect.
For further clarification please contact the Peninsula Advice Service on 0844 892 2772.