Every employee should have a contract of employment, laying out the terms of their employment and containing certain terms and conditions that give both the employee and the employer specific rights and obligations.
Here’s our guide to contracts of employment and what they should include.
What is a contract of employment?
A contract of employment is a contract signed by an employer and each of their employees.
By law, an employee must receive a contract of employment within 2 months of starting work.
An employment contract makes staff management and HR easier, ensuring both parties know where they stand and providing a point of reference in the event of a dispute. It also provides protection against legal action and sets an expectation of what is expected in the workplace.
What should a contract of employment include?
An employer and employee can usually decide between themselves the terms they want to include in the contract, but it’s important to note that the contractual terms can’t give either party fewer rights than they have under employment law.
An employment contract will contain express terms and implied terms. Express terms are specifically stated in the contract, while implied terms are ones that aren’t written down in the contract but are implied.
Explicit terms of employment
Explicit terms in a contract of employment should include:
- Names of the employer and the employee
- Start date
- Job title and description
- Salary – the employee’s salary before tax, national insurance, and any other deductions. Details of overtime or bonus pay should also be included.
- Hours and place of work
- Probationary period, if any
- Holiday pay and details of how many days holiday the employee is entitled to take each year.
- Sick pay and sickness procedure
- Deductions – Details of the circumstances in which the employer can make deductions from the employee’s salary
- Expenses – Details of any work-related expenses that will be covered by the employer, and when they will be reimbursed.
- Notice period
- Pension
Implied terms of employment
Implied terms of employment include:
- Trust – The contract should imply that there is an expected level of trust between the employer and the employee. If, for example, the employee lied about an absence, this would be considered a break of the implied contract.
- Duty of care – The employer and employee have a duty of care to each other, as well as their colleagues. So, for example, the employer has a duty to provide a safe working environment.
- Reasonable instruction – The employee has a duty to follow any reasonable instructions issued by the employer.
At Oculus HR, we are experts when it comes to employment contracts. If you have any questions about employment contracts, or you’d like help putting a contract together, please get in touch.
