It is an exciting time for your business when you take on a new person; especially if it is illustrating growth in your marine business through increased employee numbers.

We have set out below some considerations to ensure you have a good contract in place which will deal with the key employment terms for this new employee and also preparing for the situation when things don’t work out quite how you expected.

Contracts of Employment

Employment legislation only requires that you provide an employee with a statement of the key terms of their employment within two months of them starting. This must include the following information:

  1. Name of employer and employee
  2. Date employment commenced and when any continuous employment started
  3. Job location
  4. Salary and payment terms e.g. weekly
  5. Hours of work
  6. Holiday
  7. Job title
  8. Details of any collective agreement that directly affect the employee’s conditions of employment.

The employee will also need to be given information about:

  1. Sick pay and the process
  2. Pensions
  3. Disciplinary and grievance procedures (including appeal)

The information above can be provided within an offer letter or a standalone document but we would advise that a full contract is drawn up and given to the employee from day one of their employment so they are aware of their obligations and responsibilities; along with any relevant policy documents. By having a clear contract in place it may also provide protection for your business if any dispute arises during the employment relationship.

Please note than from April 2020 following the Government’s Good Work Plan you will be obliged to provide this statement of terms before the first day of employment for both workers and employees.

When drafting your contracts you should consider what specific clauses your business may need. For example, if you have a commission or bonus structure, you may want a clause clearly defining that scheme. Or if the person you have employed is going to be a senior key employee to your business then consider having a more detailed contract for him which may also include restrictive covenants or a longer notice period so your business is not left ‘high and dry’ if they leave at short notice or the employee sets up in competition weeks after leaving your employment.

If you are taking on an apprentice remember that you will need a different type of employment contract. More details around this area are found here


Probation Periods

It’s useful to have a probation period in the contract as a management tool to assess how they are getting on in the business. If your new recruit is not quite up to the job, you want to be able to easily remove them from your business as soon as it does not feel like they are the right fit. Probation periods of six months are common.

These are often helpful to have in your probation period clauses:

  • Shortened notice. This means if you dismiss in this period, you will give less notice than once the employee passes their probation. Remember that the statutory minimum notice that you have to give is one week’s notice once they have been with you for more than a month. Before then there is no statutory notice you have to give. Make sure your contract of employment reflects this.
  • Reduced salary – with an increase once they pass probation.
  • A shortened process to go through if you do wish to dismiss during that time. In the absence of this, your full disciplinary and capability processes will apply.
  • The ability to extend the probation period if you choose to do so. If you want to exercise this you do need to tell the employee you are extending BEFORE the probationary period runs out.

Be aware that during the probation period they are still an employee – with basic employment rights.  You should still ensure if dismissing that your reasons are reasonable and you are not at risk of a claim even though they have limited service with you.

In most cases, your new employee who has not passed probation, will not have worked for you for long enough to have the requisite two years service to be able to bring an ordinary unfair dismissal claim. However, your employee may still be able to bring what we call a ‘day 1 claim’ against your business. These are claims that do not have a minimum period of employment before someone can make a claim – for example claims for discrimination or whistle-blowing. So if your new employee believes that the real reason that you have not retained them is because of their gender, disability or age then they may bring a discrimination claim against you.

If you are in any doubt as to whether your employee may have a ‘day 1 claim’ if you were to dismiss them then please get in touch with us and we can work with you to assess the risk of this.

The above is just some key points to consider when dealing with new recruits who will be land based.  Be aware that there are different specific rules for Seafarers – see our article .

If you need any assistance with your employment contracts or help with the recruitment process as a whole, our employment team have a keen interest in the marine sector and would be happy to assist you with any of your queries.