Employment Contracts | What should be included?
advertisement	Why have an employment contract?An employer must provide an employee with their employment terms, (known as a "statement of terms") within two months of the employee's start date. However, a statement of terms is the bare minimum required by law, and does not protect employers properly. That is why an employment contract is much better for both employers and employees. A comprehensive contract of employment allows an employer to specify an employee's duties and responsibilities - so an employee knows exactly what is expected of them. See below for what should be included.
Contract of Employment - ContentsSee our Contract of Employment Templates for all the different employment contracts we provide.
Save Time & MoneyFor employers who want all the necessary contracts, employment policies and documents required to manage employees we would recommend buying a Staff Handbook. This is the quickest and most cost-effective way to comply with all current employment regulations.
1. Names of the PartiesThe employer's organisation details and the employee's full name and address.
2. Start DateThis is important as it also includes a brief statement to say that employment with a previous employer does not count towards the various rights that are gained by employees after one and two years of service. In other words, the employee starts again from zero with the new employer. (Exceptions to this are where an employer has taken over an organisation with existing employees - their employment rights are maintained.)
3. Job Title and DescriptionThis usually follows the job title and description specified in any recruitment advertisement and subsequent offer letter. To suit the employer it also allows for flexibility in the employee's role.
4. Place of WorkAllows the employer to specify the location where the employee will work. However, it also allows for the employer to specify any other location in the future. This gives the employer much greater flexibility.
5. Hours of WorkThe employee's hours are specified in the contract; however, the employee also agrees to work additional hours if the employer reasonably requests it. However, the hours cannot exceed the 48-hour per week as specified by the Working Time Regulations, (unless the employee has signed a voluntary opt-out from the Regulations).
6. Probationary PeriodThe employer can specify a trial period for the employee with the option of a short notice period at the end of the trial if the employee does not fulfil expectations. The employer can also extend the trial period.
7. SalaryDetails the employee's gross salary before tax, national insurance and any deductions. It also specifies when payment is made.
8. AssessmentsThe employer can state when the employee will receive their first work assessment and the timing of all subsequent regular assessments, for example, every 12 months.
9. DeductionsThis clause details all the circumstances in which the employer can make deductions from the employee's salary.
10. ExpensesThe employer can agree with the employee, which work-related expenses will be covered and when the employee will be reimbursed. However to prevent errors and possible fraud the clause makes it clear that proof of payment is required.
11. HolidaysThis clause specifies when the holiday year will run from. This is important as the employer may wish to prevent employees taking busy work periods off, for example Christmas time for hospitality, retail or entertainment industries. This clause also allows the employer to specify the number of days per year that an employee can take, (subject to a statutory minimum of 28 days) and whether bank and public holidays are included or excluded from this. The clause also includes further details regarding rolling-over holidays into the next year, restrictions on holidays where the employee has already given notice and on termination the pro rata payment in lieu of any unused holiday entitlement.
12. Sickness & DisabilityAbsence through sickness is a significant cost burden on employers. This clause states by what time the employee must inform the employer that they will be unable to attend work, (it does allow for a third party to contact the employer on the employee's behalf). The clause also states when a doctor's certificate is required and whether the employee will receive statutory or contractual sick pay. It is recommended that organisations have a separate Sickness & Absence Policy.
13. PensionThis clause states the pension provision - company pension scheme, a stakeholder pension scheme or whether the employment comes without a pension provision.
14. NoticeThe notice period to be given by either the employer or the employee. However, this clause also provides a detailed list of actions that constitute gross misconduct allowing the employer to dismiss without giving notice. Please see our Grievance & Disciplinary Policy, which is included free with all our contracts.
15. Restrictive CovenantsThis is only included within the CompactLaw Long Employment Contracts. It protects all confidential and commercial information belonging to the employer. Prevents an employee from setting up a competing business whilst still employed. Also prevents an employee from competing for a set period of time and within a defined geographical area once they have left the employer. Other restrictions include attempts to encourage other employees to leave and work in a competing business. Finally, the clause states that any breaches will entitle the employer to seek legal redress, including damages for any loss.
16. Grievance and Disciplinary ProcedureThis clause refers to the detailed separate Grievance and Disciplinary Policy that comes free with each CompactLaw Employment Contract.
17. RetirementRefers to a separate Retirement Policy - which every organisation should have in place. This clause and the retirement policy ensure compliance with the Employment Equality (Age) Regulations 2006 - age discrimination legislation.
18. SeverabilityThis standard paragraph states that each paragraph, sub-paragraph or clause is independent of each other, so if one is invalid or does not apply to the employee the rest of the contract remains valid.
19. Prior AgreementsAnother standard paragraph, stating the contract contains all the terms agreed between the employer and the employee and that no previous agreement (written or verbal) counts.
20. JurisdictionConfirms the contract of employment comes under the jurisdiction of the English courts; however, it can also be changed to specify the Scotland, (if required).
21. Particulars of EmploymentUnder Section 1 of the Employment Rights Act 1996, all employee contracts must set out the main terms of the contract in a separate schedule. This is so that the employee (and the employer) can easily refer to this schedule when they wish to remind themselves of the main terms.
Further Information Staff & Employee Handbooks Additional Clauses Procedures for Grievance & Disciplinary Action
Recommended Reading The Career Itch - by Grace OwenVery practical 4-step approach for turning your career around or starting an entirely new one.
Employment and Business NewsTravis Perkins to close 30 sites, risking 600 jobs - BBC NewsFirms will not have to list foreign workers, following government climbdown - BBC NewsSports Direct states has paid £200m in bonuses over five years - BBC NewsRise in maternity and new mother discrimination - BBC NewsImmigration raids at burger chain, 35 arrested - BBC NewsFemale members of staff harassed for taking leave - The GuardianBlind recruitment, names removed from applications - BBC News	advertisement	Free legal information & documents
Employment Contracts | What should be included?
advertisement	Why have an employment contract?An employer must provide an employee with their employment terms, (known as a "statement of terms") within two months of the employee's start date. However, a statement of terms is the bare minimum required by law, and does not protect employers properly. That is why an employment contract is much better for both employers and employees. A comprehensive contract of employment allows an employer to specify an employee's duties and responsibilities - so an employee knows exactly what is expected of them. See below for what should be included.
Contract of Employment - ContentsSee our Contract of Employment Templates for all the different employment contracts we provide.
Save Time & MoneyFor employers who want all the necessary contracts, employment policies and documents required to manage employees we would recommend buying a Staff Handbook. This is the quickest and most cost-effective way to comply with all current employment regulations.
1. Names of the PartiesThe employer's organisation details and the employee's full name and address.
2. Start DateThis is important as it also includes a brief statement to say that employment with a previous employer does not count towards the various rights that are gained by employees after one and two years of service. In other words, the employee starts again from zero with the new employer. (Exceptions to this are where an employer has taken over an organisation with existing employees - their employment rights are maintained.)
3. Job Title and DescriptionThis usually follows the job title and description specified in any recruitment advertisement and subsequent offer letter. To suit the employer it also allows for flexibility in the employee's role.
4. Place of WorkAllows the employer to specify the location where the employee will work. However, it also allows for the employer to specify any other location in the future. This gives the employer much greater flexibility.
5. Hours of WorkThe employee's hours are specified in the contract; however, the employee also agrees to work additional hours if the employer reasonably requests it. However, the hours cannot exceed the 48-hour per week as specified by the Working Time Regulations, (unless the employee has signed a voluntary opt-out from the Regulations).
6. Probationary PeriodThe employer can specify a trial period for the employee with the option of a short notice period at the end of the trial if the employee does not fulfil expectations. The employer can also extend the trial period.
7. SalaryDetails the employee's gross salary before tax, national insurance and any deductions. It also specifies when payment is made.
8. AssessmentsThe employer can state when the employee will receive their first work assessment and the timing of all subsequent regular assessments, for example, every 12 months.
9. DeductionsThis clause details all the circumstances in which the employer can make deductions from the employee's salary.
10. ExpensesThe employer can agree with the employee, which work-related expenses will be covered and when the employee will be reimbursed. However to prevent errors and possible fraud the clause makes it clear that proof of payment is required.
11. HolidaysThis clause specifies when the holiday year will run from. This is important as the employer may wish to prevent employees taking busy work periods off, for example Christmas time for hospitality, retail or entertainment industries. This clause also allows the employer to specify the number of days per year that an employee can take, (subject to a statutory minimum of 28 days) and whether bank and public holidays are included or excluded from this. The clause also includes further details regarding rolling-over holidays into the next year, restrictions on 
holidays where the employee has already given notice and on termination the pro rata payment in lieu of any unused holiday entitlement.
12. Sickness & DisabilityAbsence through sickness is a significant cost burden on employers. This clause states by what time the employee must inform the employer that they will be unable to attend work, (it does allow for a third party to contact the employer on the employee's behalf). The clause also states when a doctor's certificate is required and whether the employee will receive statutory or contractual sick pay. It is recommended that organisations have a separate Sickness & Absence Policy.
13. PensionThis clause states the pension provision - company pension scheme, a stakeholder pension scheme or whether the employment comes without a pension provision.
14. NoticeThe notice period to be given by either the employer or the employee. However, this clause also provides a detailed list of actions that constitute gross misconduct allowing the employer to dismiss without giving notice. Please see our Grievance & Disciplinary Policy, which is included free with all our contracts.
15. Restrictive CovenantsThis is only included within the CompactLaw Long Employment Contracts. It protects all confidential and commercial information belonging to the employer. Prevents an employee from setting up a competing business whilst still employed. Also prevents an employee from competing for a set period of time and within a defined geographical area once they have left the employer. Other restrictions include attempts to encourage other employees to leave and work in a competing business. Finally, the clause states that any breaches will entitle the employer to seek legal redress, including damages for any loss.
16. Grievance and Disciplinary ProcedureThis clause refers to the detailed separate Grievance and Disciplinary Policy that comes free with each CompactLaw Employment Contract.
17. RetirementRefers to a separate Retirement Policy - which every organisation should have in place. This clause and the retirement policy ensure compliance with the Employment Equality (Age) Regulations 2006 - age discrimination legislation.
18. SeverabilityThis standard paragraph states that each paragraph, sub-paragraph or clause is independent of each other, so if one is invalid or does not apply to the employee the rest of the contract remains valid.
19. Prior AgreementsAnother standard paragraph, stating the contract contains all the terms agreed between the employer and the employee and that no previous agreement (written or verbal) counts.
20. JurisdictionConfirms the contract of employment comes under the jurisdiction of the English courts; however, it can also be changed to specify the Scotland, (if required).
21. Particulars of EmploymentUnder Section 1 of the Employment Rights Act 1996, all employee contracts must set out the main terms of the contract in a separate schedule. This is so that the employee (and the employer) can easily refer to this schedule when they wish to remind themselves of the main terms.
Further Information Staff & Employee Handbooks Additional Clauses Procedures for Grievance & Disciplinary Action
Recommended Reading The Career Itch - by Grace OwenVery practical 4-step approach for turning your career around or starting an entirely new one.
Employment and Business NewsTravis Perkins to close 30 sites, risking 600 jobs - BBC NewsFirms will not have to list foreign workers, following government climbdown - BBC NewsSports Direct states has paid £200m in bonuses over five years - BBC NewsRise in maternity and new mother discrimination - BBC NewsImmigration raids at burger chain, 35 arrested - BBC NewsFemale members of staff harassed for taking leave - The GuardianBlind recruitment, names removed from applications - BBC News	advertisement	Free legal information & documents