Understanding Employment Contracts in the UK
Employers in the UK are legally required to provide employees with a written statement of terms and conditions on their first day of employment. Within two months, a more comprehensive contract must be provided, outlining policies on training, pensions, and disciplinary procedures.
It is advisable to establish the person’s employment status, whether as an employee or a worker, and provide a single contract from day one. This allows employers to cover important areas such as data protection, confidentiality, and reference requirements.
“We recommend that employers provide the widest-ranging contract as early as possible during the engagement.”
This approach not only creates a culture of rigor and trust but also saves time in the long run by avoiding the need for a wider statement or contract later on.
What should an employment contract include?
As an employer, the principal employment statement must include the following details:
- The names and addresses of the employer and employee/worker.
- The job title and description, including potential duties.
- The start date of the engagement.
- Salary details, including payment frequency and expected date of payment.
- Working hours, including variations such as Sundays, night shifts, or overtime.
- Holiday entitlement, including pro-rated allowances for part-time employees.
- Location details, including potential for relocation.
- Job duration, including end-date for fixed-term contracts.
- Probationary period details.
- Employee benefits, such as childcare vouchers or provided meals.
- Training requirements and cost responsibilities.
- Sick leave and payment procedures.
- Other paid leave, such as maternity or paternity leave.
- Notice periods for termination.
Employment contracts for international assignments
If an employee or worker will be working abroad for more than a month, additional details must be included:
- Duration of the assignment.
- Currency of payment.
- Additional pay or benefits.
- Terms for returning to the UK.
Employers can choose to include this information in the principal statement or as a separate document. Either way, the employee or worker must have reasonable access to it.
The importance of a comprehensive contract
Providing a comprehensive contract early on in the engagement can minimize the risk of unfair dismissal claims and establish clarity in the employment relationship. If provided at the two-month limit, the wider statement must also include information about pensions, collective agreements, non-compulsory training, and disciplinary procedures.
It is crucial to carefully consider the terms of the employment contract to reflect the specific circumstances of the business. Seeking professional advice in this matter can be beneficial.
About the Author: Sue Tumelty is the founder and executive director of The HR Dept.
Further information on employment law
Employment law changes in 2023 – holiday entitlement for zero-hours workers, higher Minimum Wage pay, and upcoming changes to EU regulations.