What is a UK Employment Contract?
A Contract of Employment (also called an employment agreement) is an agreement between the employer and employee setting out detailed terms and conditions of the employment.
How to create a UK Employment Contract
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What are Contracts of Employment?
Employment contracts determine the terms of an individual’s employment. It is a legally binding document signed when an individual is hired.
Whilst UK employers don’t have to issue official written employment contracts, they are often preferred over the statutory minimum ‘Written Statement of Particulars’ because of the certainty contracts afford. This Statement will still be required, but contracts of employment offer increased clarity concerning the rights and responsibilities of both parties. For this reason, both are usually used by companies when hiring.
What needs to be included in a Contract of Employment?
Employment contracts don’t have to be complicated. A lot of the information to be included can be taken directly from the statutory Written Statement of Employment Particulars.
Basically, you want to include any information you believe to be relevant to the role, the employee or the employer. This will likely include details of:
- The employee and employer
- Salary and other benefits
- Paid annual leave
- Other leaves of absence
- Location of work
- Scope of the role
- Pension entitlements
- Termination provisions
- Confidentiality obligations
When considering these provisions, remember to take into account any relevant legislation such as that surrounding minimum wages and working conditions.
For more information on what to include in an employment contract, click here to read our blog, ‘What should be included in a UK employment contract?’.
Why Use a Contract of Employment Template?
Using our template will make sure that you cover all the important terms of the employment. It will also help you to set out the relevant duties and responsibilities of the employee and the employer clearly and comprehensively.
This is of benefit for the following reasons:
- Aiding dispute resolution- employment contracts that are clearly written can significantly reduce the legal burden on an employer in the event of an employee/employer dispute. While there is significant legislation in the UK that protects employees, the employment contract will often be the first document reviewed.
- Ensuring baseline employee performance- An Employment Contract has a clear description of the duties of the employee. If an employee is consistently underperforming and not meeting the agreement set out in their contract, their employer will have reason to take action.
- Decreasing the likelihood of needing to make changes or additions to the contract- future additions and changes to the contract cannot be made without employee consent. This makes getting it right the first time all the more important, and using a template helps to ensure this.
When Do You Sign an Employment Contract?
The contract should be signed before employment starts, and at the latest, on the day the employment commences.
Can you make changes to an Employment Contract after it has been signed?
If the contract is still in force, changes can only be made with the consent of both the employer and employee. Changes cannot be imposed unilaterally by the employer. Attempting to do so may give rise to unfair or wrongful dismissal claims by affected employees.
It is also important to note that alterations to the terms in the contract are further restricted on an acquisition of the employer business in an asset sale. Only specific changes can be made to the contracts of employment of those employees transferred to the new undertaking. Specific legal advice should be sought prior to the acquisition if changes are needed to the relevant contracts by the Buyer.
Are there different types of Employment Contract?
The different types of employment (for example full- or part- time, fixed-term contracts, agency work, freelancing, consultancy or zero-hours work) will result in different types of employment contract. This is because each type of employment will have different obligations on the parties.
For tax and employment law reasons, it is important for both parties to be clear what sort of employment they are signing up to.
How to Use a Zegal Employment Contract Template
A Zegal template is easy-to-use and includes a clear definition of roles, responsibilities, payments, and benefits. A well-written employment contract helps set a better relationship between the employer and employee and aids in the success and growth of any organization, and this is what the Zegal Employment Contract will help you to achieve.
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