Contracts of Employment

Everything you need to know about contracts of employment.

The contract of employment is the most important document in the employment relationship. The right contracts of employment will protect your business and provide flexibility. The wrong contracts won't! They will restrict you and leave you vulnerable to unnecessary costs and disputes.

When there is an employment 'issue' or 'dispute' the first question is often 'what does the contract say?' (followed by what does the policy say?). 

Clearly drafted contracts (and supporting documentation) can prevent disputes arising. If everyone is clear from the outset about what the terms are (and what is expected) there is less chance of misunderstandings or disagreements. If disputes do arise, they can generally be resolved more quickly, easily and amicably. 

The contract of employment is simply the most important document when it comes to employment, so it's worth getting right. 

There are also legal requirements to comply with in regard to providing employees with a written statement of their terms of employment.  This can be achieved by providing a clear contract within the required time frame (ensuring the areas required under legislation are included). 

In this section you will find everything you need to put in place contracts of employment and to document any changes to terms throughout the employment. 

Start by reading the guidance notes and then look at the contract templates. 

Frequently asked questions

Yes and No! Not if they have raised objections to its terms. See implementing contracts (and implied consent) and look at the section changing terms.

Just because you do not have a written contract, this does NOT mean there is not a contract in place. There will be a verbal contract and an employee will have been employed under a (verbal) contract of employment since they started with you. You therefore need to consider and understand the terms of the contract (this is where disputes can arise if the contract is not in writing).

If you are going to dismiss someone, you need to follow the correct procedures.  The employee may have the right to claim unfair dismissal depending on their length of service and reason for dismissal. Also see ending employment and notice periods

It is a legal requirement to provide a written statement of terms (i.e. this is normally the contract of employment) of employment within 2 months of starting.  The 5 core terms must be issued to an employee within 5 days of starting. 

In legislation, an employer must give employees a document stating the main conditions of employment. This is known as a ‘written statement of employment particulars’. There are 5 key terms of employment that need to be given to the employee within their first 5 days of employment and other terms can be given within 2 months. However in practice, the simple way to ensure you meet legal requirements and provide clarity of terms is to issue the employee with their full contract of employment on or before their first day. See the guidance on the written statement for more details.

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Case Study - Contractual Terms in Action

This case study looks at how good contracts can give you options and flexibility in certain situations and save you money. It compares two fictitious companies, but is based on real situations.

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