The purpose and importance of an employment contract
Questions to be answered in this article
What is the definition of an employment contract?
An employment contract is a legally binding agreement between an employer and their employee, which states the conditions of employment.
What is the purpose of an employment contract?
The purpose of an employment contract is to ensure that both you and your employer have a clear understanding of what is expected during the term of employment.
What can an employment contract include?
- The names of the employer and employee
- The date of commencement of employment
- Salary before tax
- Duration of employment
- Job title and description, listing the general responsibilities
- Working hours
- Probation period
- Grievance and disciplinary policy
- Work-related expenses
- Holiday entitlement
- Sickness and Absence policy
- Notice period
- Details and eligibility of the employer’s occupational pension scheme (if there is one)
Why are employment contracts so important?
Having clear, well-drafted contracts and policies is essential for any business. Employment contracts help you manage your staff effectively and protect your interests if issues arise.
It’s important to have well drafted contracts that are tailored to your business and individual employees and their responsibilities.
Our employment solicitors can help you put in place contracts that protect your business whilst also ensuring they are reasonable and enforceable.
Does an employment contract have to be in writing?
Employment contracts can be written or verbal but written contracts are clear and provide evidence for both the employer and employee.
By ensuring that the employment contract is clear and easily accessible, it is less likely that disputes will arise because both the employer and the employee know what is expected.
Can a contract of employment be changed?
An employer or an employee might want to change a contract of employment. However, neither an employee or employer can change your employment contract without each others’ agreement.
How can an employee be in breach of contract?
An employer can be in breach of contract if they do something that doesn’t match what’s outlined under the terms of the employment contract.
- Breach of confidentiality
- Repeated misconduct
- Working for a competitor when prohibited
- Resigning without working or giving proper notice
- Persistent lateness resulting in financial loss to the business
- Not performing duties listed in the contract resulting in financial loss to the business
How can an employer be in breach of contract?
An employer can be in breach of contract if they do something that doesn’t match what’s outlined under the terms of the employment contract. This can include:
- Making unauthorised changes to the contract
- Doesn’t follow correct procedures as outlined in the contract
- Failure to pay monies owed such as salary.
An employer isn’t allowed to make changes to an employees working hours, job duties or rate of pay within the employment contract without notifying the employee, and in many cases reaching agreement.
How can Goughs help me?
At Goughs, our employment specialists can draft and tailor contracts and policies to fit your business needs, whilst ensuring they are reasonable and enforceable. We can help with both writing and reviewing existing contracts and advising on breach of employment contract issues.
How else can Goughs employment solicitors help me?
Whatever your business structure and available resources, our employment specialists can provide expert advice and guidance on a range of topics including:
- Employment Contracts and Policies
- Service Contracts and Consultancy Agreements
- Contract Variation
- Discrimination and Equality Legislation
- Grievance and Disciplinary Procedures
- Performance Management
- Reorganisation, Restructure and Redundancy
- Transfer of Business/ Business Assets
- Executive Terminations, Managed Exits and Severance Negotiations
We can also advise employees on the following topics:
- Unfair / wrongful dismissal
- Breach of contract
- Discrimination (sex, race, maternity, disability, trade union membership, age, gender or religion)
- Pay disputes
- Family friendly rights
- Severance deals and Settlement Agreements