Employment Contracts – Do you have to give your employees at contract?

Yes you do! You are legally required to provide your employees with a written statement of their employment particulars (known as a ‘statement of terms’) within the first two months of their employment. As a minimum, the statement must cover their basic terms such as pay, hours of work, location and pension rights, as set out by the Employment Rights Act 1996.

It is a common misconception that many employers believe that employment contracts are only necessary in larger organisations when that ‘element of trust’ between employee and employer becomes harder to manage or that by not having contracts in place, employees have less ‘rights’. In fact, employees will still have certain statutory rights such as minimum pay, notice and pension, regardless of whether or not a written contract exists. From an employers perspective, a well-drafted employment contract can actually offer greater protection for the business than having nothing in place.

Take for example the scenario that an employee chooses to resign and goes to work for a competitor.
If they don’t have a contract of employment they could theoretically leave straightaway; there is no express obligation for them to keep information about your business confidential; and they could entice other employees or customers away.

And what if that employee is expecting to receive a bonus before they leave?
Without specifically stating your rules – such as they must be employed by the business, and not working their notice, at the time that the payment is due – it would be difficult to enforce this and you may find yourself paying out more that you had intended to.

Without specifying in a contract you can’t put an employee on garden leave or pay them in lieu of working their notice and you may be required to pay out for additional holidays and other benefits during this time.

Whilst paying the upfront costs of getting a professional to prepare a comprehensive contract of employment may be off putting, the added protection it will give your business in minimising the risk of potential claims, will be worth it in the long run.

Is there anything else you are required to do as an employer when it comes to written documentation?

If you have five or more employees, it is essential that you have a written health and safety policy in place which sets out both employer and employee responsibilities along with written grievance and disciplinary policies. Furthermore, it is well worth including extra policies such as sickness, the use of social media and flexible working. Any such policies that you introduce can be specific to your requirements and will go a long way to ensuring that your employees know what is expected from them and in turn how they can be expected to be treated by you.

To help businesses ensure they have up to date and legally compliant contracts of employment and employee handbooks we offer fixed price packages starting from £450 plus VAT.

If you would like more information or support regarding your employments contracts and handbooks please get in touch with us at www.keystonehr.co.uk for an initial free, on obligation chat.

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