Concept for - What does an employment contract need to include?

It is important that you have employment contracts in place for anyone who is an employee or a worker. Then both parties (employer and staff member) start off on the right foot, being clear on the terms agreed between them to ensure a good working relationship and to guard against potential misunderstandings, plus employment claims going forward.

When do you need to issue a contract of employment?

An employment contract should be issued on an employee or worker’s first day of employment or beforehand.

Employers have a statutory obligation to give employees and workers a document that states their main conditions employment when they start work, sometimes referred to as a ‘section 1 statement’. A wider statement with additional information must be provided within the first two months of employment. The best way to achieve this is usually by way of a contract of employment.

Failing to do so can result in a potential breach of the obligation to provide a section 1 statement leading to compensation being awarded in Employment Tribunal proceedings, of 2 -4 weeks’ pay (subject to the statutory cap, currently £700 per week). But, perhaps more importantly not being clear on contractual terms can damage the employment relationship. If you have failed to do this already, do not delay. It is better to issue a contract of employment now than not at all.

What should an employment contract include?

These are the minimum terms we advise that you should include in a contract of employment:

  • Name of employer
  • Name and start date for the employee or worker (including if any previous employment counts towards service).
  • Terms of any probation period (or confirmation there isn’t one).
  • Their job title or description of duties.
  • Their place of work if there might be different places of work.
  • Salary – rate of pay, how it is calculated and intervals of pay. Please see our article on the latest updates to national minimum wage.
  • Hours of work. The days of the week the worker is required to work, and whether the working hours or days may be variable, including details of how they may vary such as working on Sundays, during the ‘night period’ or overtime.
  • Terms and conditions relating to sickness, including sick pay, self-certification and delivery of medical certificates.
  • Holiday entitlement including public holidays, when the holiday year runs and approval process. Whether holiday can be carried forward and entitlement on termination.
  • Any other benefits provided to the employee e.g. accommodation and if this is provided you must ensure it is correctly documented so that staff do not have greater rights to occupy your property than intended. (Taking specialist legal advice is highly advisable).
  • Termination and notice periods for both employee and employer.
  • Disciplinary and Grievance Procedures and where to find them, including how to appeal.
  • Details of any pensions scheme. Your staff may be eligible to be enrolled into an auto-enrolment pension scheme and if this is a legal requirement, it is important you comply as an employer. It is important to get this right so ensure you speak to your accountant if you have any concerns.
  • Any entitlement to paid leave (for example maternity leave and paternity leave).
  • Any training provided which the employee/worker is required to complete and any other right to non-compulsory training provided by the employer.
  • Details of any collective agreement (or confirmation is there isn’t one).

Are there enhanced rights for agricultural workers?

Agricultural workers that have been employed before 1 October 2013 may have enhanced rights under the Agricultural Wages (England and Wales) Order 2012, for example, enhanced rights to paid holiday, sick pay, on call allowances and breaks from work. It is important that you adhere to these rights otherwise you could end up changing your employees’ contract without their permission, which could lead to a potential claim.
How can we help you?

At Stephens Scown we have templates for contracts of employment that cover all of these key points and we can adapt these for your bespoke business and employment needs.
This is the document that starts your working relationship with your employee or worker and it is important that this is done right.