Hiring a new staff member means you need to provide them with an employment contract. This helps the employee understand what’s expected of them in their new role and ensures you are legally compliant.
However, if you’ve never written an employment contract, knowing when to begin can be challenging. Our HR experts have put together everything you need to know about employment contracts, including:
- What is an employment contract?
- Is an employment contract required by law?
- What should be included in a ‘written statement of employment particulars’?
- How to write an employment contract in 4 steps
What is a contract of employment?
All employees have an employment contract with their employer. This is a legally binding agreement. The employee and employer must stick to the contract until it ends or the terms change (which both parties must agree on).
An employment contract sets out an employee’s:
- Terms and conditions of employment
- Rights and benefits
- Responsibilities and duties
As soon as an employee accepts the job offer, they have a contract with their employer. An employment contract can be verbal (for example, a job offer agreed through a phone call) or written down (for example, an email accepting a job offer).
However, most employers will provide their employees with a written contract that includes information on the job role, the employee’s responsibilities and company policies. This document is typically signed by both the employee and employer after the employee has accepted the job offer or on the employee’s first day of work.
Is an employment contract required by law?
According to the Employment Rights Act 1996, anyone legally classed as an employee or worker has the right to a ‘written statement of employment particulars‘. This is different from an employment contract.
The difference between an employment contract and a written statement
A written statement includes the main terms of employment. Although this is sometimes referred to as an employment contract, an employment contract contains more information than a written statement.
What should be included in a ‘written statement of employment particulars’?
The ‘written statement of employment particulars’ consists of:
- the main document (the ‘principal statement’)
- a wider written statement
The employer must provide the principal statement on the first day of employment (or before) and the broader written statement within two months of the employee’s first day.
The principal statement
The principal statement must include:
- The employer’s name and address
- The employee name
- The employee’s start date
- The date that ‘continuous employment’ started for an employee
- The job title or job description
- The usual place of work
- Details on pay, including how much, how often and the payment date
- The working hours and days (including details on if this will change and how much notice will be provided)
- Annual paid holiday entitlement and holiday pay
- Sick leave entitlement and sick pay
- Any other paid leave
- Any contractual and non-contractual benefits
- The notice period for both the employee and employer
- The fixed term of the job (if relevant)
- Details of any probation period
- If the employee will work abroad and any relevant information
- Any compulsory training
The wider written statement
The wider written statement must include the following:
- Details of pension and pension schemes
- Collective agreements (terms and conditions that apply to other employees too)
- Any rights to non-compulsory training provided by the employer
- The company’s disciplinary and grievance procedures
How to write an employment contract in 4 steps
1. Title the employment contract
Give your employment contract a relevant title so the employee knows what they’re signing. This is particularly important if you’re emailing it to them.
2. Include the names of both parties
You should include the company’s and employee’s full name and address.
3. List all the relevant terms and conditions of employment
You should ensure you include everything legally required in the ‘principal written statement of employment particulars’ within the broader employment agreement. Additionally, you can include what’s legally required in the ‘wider statement’ or update the employee with this information later (legally, this information must be given within two months of the employee starting work).
The employment contract can also include anything else you deem relevant to your company or industry, for example:
- A detailed job description and responsibilities
- The company’s expenses policy
- Rules around retirement
- Privacy policy
- Social Media Usage Policy
- GDPR policy
- Confidentiality and non-compete clauses
- Restrictive covenants
- Remote working policy
- Monitoring policy
4. Have your contract of employment reviewed by HR experts
After you’ve completed the first draft of your employment contract, it’s essential that you have it reviewed by a team of HR experts to ensure that everything is worded correctly and you’ve included everything that’s legally required.
Tailored employment contracts
If your organisation is hiring a new employee, our team of specialist HR consultants can draft a legally compliant employee contract that’s bespoke to your business. We’ll meticulously craft your contract using precise wording and policies approved by accredited Employment Law experts to ensure your company is legally protected.
Our HR consultants can provide you with tailored, ready-to-issue contracts, staff handbooks and paperwork on a case-by-case basis. If you require further HR support or need ongoing advice, we also offer a retainer HR service, which includes tailored documentation and contracts.
Trusted HR offers a free, 60-minute, no-obligation consultation on any HR issue to help you see if working with us is the right fit for your business. Request your free initial consultation to take the first step.
