Laura Charles, our HR Coordinator explains why it is so important to have a contract of employment.
The legal responsibilities of an employer surrounding employment law and HR are not only complex, but essential to running a successful business. When you start a business, employee contracts are probably the last thing on your mind, and you can carry on for years without there being any problems. Then out of the blue, something goes wrong, and you have an employee raising a dispute through the Employment Tribunal Service. Drafting well written terms of employment can help to avoid these problems in the first instance, and if a claim is made, can help you to defend any claims.
So, what is an employment contract?
An employment contract is a legally binding agreement between an employer and their employee. It’s usually a written document that sets out the rights, responsibilities, and duties of both the employer and the employee.
What is the difference between a Contract and Written Statement of Employment?
Employers do have to provide their employees with a “written statement of employment particulars”. This is a written document that sets out important details of the employer and employee relationship. By law, an employer has to provide this main document on the employee’s first day of work. This should give you details of:
- the employer’s name
- the employee’s or worker’s name, job title or a description of work and start date
- how much and how often an employee or worker will get paid
- hours and days of work and if and how they may vary (also if employees or workers will have to work Sundays, nights, or overtime)
- holiday entitlement (and if that includes public holidays)
- where an employee or worker will be working and whether they might have to relocate
- if an employee or worker works in different places, where these will be and what the employer’s address is
- how long a job is expected to last (and what the end date is if it’s a fixed-term contract
- how long any probation period is and what its conditions are
- any other benefits (for example, childcare vouchers and lunch)
- obligatory training, whether this is paid for by the employer
What are the benefits of a Contract of Employment?
Employment contracts are designed to reduce risks for both employees and employers. A well-constructed contract brings clarity to the working relationship, avoids future misunderstandings, and establishes the key responsibilities of the employer and employee.
For employees, contracts state the benefits they are entitled to under employment including pay, sick pay, and other forms of paid leave. They also ensure job security. For employers, contracts are an essential part of protecting business interests and confidential company information.
For further help and advice please contact our Human Resources department on 01981 590514.