How do I draft an employment contract correctly?

If you’re offering a job to a new member of staff, it’s worth asking an employment solicitor to draft or review the contract before they sign on the dotted line.

We have the experience and the expertise to draft or look at any proposed employment contract and advise you on whether it's in your best interests to offer those terms, or to make changes.

This involves checking that the employment contract complies with all legal requirements and a detailed analysis on specific terms relating to benefits packages, confidentiality provisions, intellectual property protection and termination provisions. We'll also review any restrictive covenants, such as non-compete covenants, to make sure they’re likely to be enforceable by the courts and therefore protect your business.

We can also advise on the content of Staff Handbooks and workplace policies. These are very important as they establish what the employee both knows and is deemed to know about how they must conduct themselves at work and out of work and what the consequences could be if they act in breach of policy.

What information must be included in an employment contract?

Some terms and conditions need to be given to employees at the outset of their employment. These include information on:

• the name of the employer and employee
• the date employment commenced
• the date when continuous employment began
• the scale, rate and method of calculating pay
• intervals at which remuneration is paid
• terms and conditions relating to hours of work
• entitlement to holidays, including public holidays and holiday pay
• the job title or a brief description of duties
• the expected place of work

Some further information must be provided to employees; however, this can be referred to without being included in the main statement of terms of employment.

The law concerning who you need to provide this information to, the information you need to supply, and when it needs to be supplied was changed on the 6 April 2020. Employers are now required to provide their employees with a written statement on or before their first day of employment. If you have not yet reviewed your contracts following these changes you should consider doing so.

What additional information will I need to supply in employment contracts?

The changes in the law require further information to be provided, such as:

• the specific hours and days of the week the employee or worker is required to work whether these can be amended and the procedure for amending them
• details of any other paid leave, such as parental or family leave
• details of further benefits
• details of any probationary period
• details of any training provided by the employer

When will this information need to be supplied?

The right to the information noted above will become a ‘day one right’ meaning this information must be provided on or before the first day of work.

You’ll also have to provide this information if you offer a new contract to an existing employee or worker, if a current worker requests a statement of terms, or if you’re planning to change a current employee or worker’s terms of employment. If a current employee requests updated terms of employment, these must be provided within one month of the request.

Who will I have to supply this information to?

This has been expanded to employees and workers. This means that you may have staff who were not previously entitled to a statement of terms, who will be from 6 April 2020.

Workers have different rights to employees. Determining the employment status of a member of staff is an important decision and can be a difficult legal task unless you have expert advice.

The best way to ensure that your contracts are compliant is to make sure that the contract reflects the reality of your relationship with your staff. Rarely is the ‘one size fits all’ the best solution to employee contracts.

We have the experience to ensure that your contracts are compliant with legal requirements, and don’t mischaracterise the employment relationship, avoiding complex and costly disputes.

What can I do now?

The best time to act is before any issues arise. Failure to comply with the requirements can lead to employment tribunal applications, whereby the tribunal can make its own declaration as to the terms of employment.

If a staff member has brought another successful substantial claim such as a discrimination, unfair dismissal or breach of contract claim along with an application for a declaration of terms, the tribunal must award between two weeks’ and four weeks’ pay in relation to the contract terms issue, in addition to any compensation for the other successful claims.

If you’re thinking about taking on new staff, harmonising your employment contracts, or you deal with staff who have flexible working arrangements, you should ensure that your business complies with the new requirements.