Contract of employment

The contract of employment is an agreement that forms the basis of a relationship between employer and employee.

However, the contents of this contract don't need to be presented as formal written document in order to be considered legally valid.

In terms of physical documentation, employers are legally required to give all of their employees a written ‘statement of main terms’.

In addition to this, the contract of employment also covers verbal agreements and implied terms.

Statement of main terms

By law, the statement of main terms must include the following pieces of information:

• Name of employer and employee
• Start date
• Place of work
• Details about pay
• Holiday entitlement
• Pension entitlement

Employees must receive this by the start of their employment. The statement of main terms is commonly accompanied by an employee handbook.

In that, you can include detailed rules of employment and any other important information the employee needs to know.

Those classified as ‘workers’ must also receive a written statement by the time they start work.

Importance of documentation

The statement of main terms and conditions of employment and the employee handbook together form the contract of employment and the framework for the employment relationship.

They detail important procedures for both the employer and the employee to follow, such as raising grievances.

These documents allow employers to inform staff what is expected of them in their respective job roles, but also provide an opportunity to detail any benefits that apply to their employment.

They can also be used as a key reference point if it's alleged that an employee has broken a rule or is in breach of contract.

Employment Contracts: The Acas guidelines

As the primary written agreement documenting the nature of working relationship between employer and employee, it's important to get the employment contract right for every member of staff.

With so much necessary detail required by law, as well as the recommended inclusions for best practice, we recommend cross-referencing your approach with the established Acas guidelines on employment contracts.

This ensures that every possibility is covered and that a clear agreement is in place that serves the interests of both parties involved.

Beyond this, we recommend getting in touch with our team of HR experts for further Acas and employment law advice that is tailored to the specific needs of your business.

The law behind contract of employment

The Employment Rights Act 1996 details the requirement to give an employee a statement of main terms.

The Employment Act 2002 details the compensation that can be awarded for failure to provide a statement of main terms, the equivalent to either two or four weeks’ pay.

However, the employee must ‘piggy back’ that claim onto another claim e.g. unfair dismissal, unlawful deductions, discrimination, which they must win in order to receive compensation for failure to be provided with a statement of main terms.

Summary

• The contract of employment is a legally binding agreement between employer and employee that covers both express and implied terms of employment.
• Although the contract of employment is not a tangible item, a physical statement of main terms must be issued to an employee by day one of their employment.
• The Employment Rights Act 1996 details the essential elements that must be included within the statement of main terms.

Need our help?

Get in touch with us for assistance with your contracts of employment. We're here to help: 0800 028 2420.