Contract of Employment

What is a contract of employment?

A contract of employment is a legally binding agreement (either written or verbal) that outlines the relationship between an employer and an employee.

Do you need a written contract of employment?

Yes, employers have a legal obligation to provide any employee or worker who has worked at the company for at least a month with a written statement of employment particulars. By law, the employee needs to receive this within two months of starting work.

A written statement of employment particulars should include:

• Both your company name and the employee’s name
• The employee’s start date
• Their job title
• A job description and their responsibilities
• The amount of pay and how often they’ll be paid
• Their hours of work
• Their holiday entitlement
• Detail about training and benefits
• How much notice the employer must give the employee should they terminate the contract of employment
• How much notice the employee must give the employer should they decide to leave
• How long their probation period is
• Where the job is usually based
• Details of any collective agreements that have been made with the employee
• Where the employee can find information on pensions and pension schemes, disciplinary and grievance procedures and the appeals procedure

In addition a more detailed employment contract can include:

• Rules, regulations, policies and practices of the employer
• Confidentiality and/or intellectual property obligations
• If deemed necessary, a non-compete clause or other post-termination restrictions
• Any other general provisions

Types of employment contracts

There are many types of contracts in the UK that govern the working relationships between parties. These include the following:

• Full-time or part-time contract for an indefinite period: A permanent contract is the most common in the UK. Both the employer and the employee have the right to terminate the contract by giving notice or by dismissal.
• Fixed-term contract: Employees with these contracts have the same rights as full-time permanent staff. The contract between the employee and employer is established for a set period that is agreed in advance.
• Agency staff or temporary contract: An employer can hire temporary staff from an agency to meet an increase in demand for a product or service, such as over the Christmas period. Temporary agency workers should receive the same conditions as permanent employees after 12 weeks.
• Zero hours contracts: These contracts cover work or jobs that only happen on a sporadic basis, so employees may be ‘on-call’ to come in, with no set or defined hours of work.
• Self-employed contract: This type of contract covers employees who aren’t part of an organisation, but rather work for themselves or their own business, ensuring its success or failure. A self-employed worker will define their own work activities, and when and where they carry them out and carries more commercial risk.
• Internship contract: An intern is either a worker, employee or volunteer. Volunteers do not get paid. If interns carry out regular work, they can be viewed as an employee and become eligible for National Minimum Wage. Students who carry out an internship as part of their course are not entitled to a minimum wage.
• Apprentice agreement: This agreement details the skills, trade or occupation the apprentice is being trained for and how long the training will last. Anyone 16 or older who is not currently in full-time education can apply for an apprenticeship.

Breach of employment contract

A breach of employment contract occurs when either the employee or the employer fails to uphold the terms of the agreement. For example, an employer can breach an employment contract by not paying wages, not giving enough notice when dismissing an employee, or failing to reach an agreement with an employee before making significant changes to their working conditions.

If you wish to discuss employment contracts or get help drafting your employee contracts, speak to one of our employment law experts today.

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