What Managers Need: The Fundamentals of Employment Contracts

Getting that initial contract of employment template ready can be a real hassle, and it’s tempting to get a professional to draft it up, but even at that stage, it’s important to know what you’re promising your employee, and to make sure that there are no loopholes that can be exploited by less scrupulous employees. Whether or not you’re using a contract of employment template or writing one from scratch, you need to make sure all the bases are covered. For that reason, I’ve written up this guide to explain what you might need to have on the form, and why:

Firstly, it’s important to note that you must give your employees a contract – in fact, by law you’re required to give them a statement of terms within 2 months of them joining, but that’s the bare minimum, and it’s really in your interests to give them something more comprehensive. This is the kind of thing that company employment contracts should contain:

Names

Can’t have an employment contract without names - both your employee and the company’s. This should also include addresses of both parties

Start Date

This is particularly important to keep a track of, because it can be used to work out when employees gain new benefits, as well as keeping a track as to when they should be up for review.

Job Title and Description

Put down the same job title that you advertised with, and then any duties that you feel they may be undertaking. It might be worth covering your back here and including something to the effect that the duties are down to your discretion and are open to change. If not, they could theoretically refuse to undertake anything else – and have the law on their side, so be sure to leave some space to manoeuvre in your company employment contracts.

Place of Work

This keeps a legal note of the office location in the employment contract, but can also extend to allow occasional working from home and of course for potential office moves in the future.

Hours of Work

This is where you stipulate the number of hours the employee needs to keep, and the manner in which they can keep them (e.g: do they have a flexitime setup where they need to complete a certain number of hours within any given week?) The employee can also agree to additional hours, as long as the employer does not demand more than 48 hours a week, which would be illegal. The employee can voluntarily opt out of the law, should they wish.

Probationary Period

This is a nice one to include in the contract, because sometimes things just don’t work out – either they employee isn’t what the employer was looking for or the job isn’t right. This trial time typically has a shorter notice period and employment can be terminated by either side at any time. This is typically a number of months or weeks, but can be extended by the employer if they put such a clause into the UK employment contract.

Salary

This is what your employee expects to see on their wage slip at the end of each month and an area fundamental to the employment contract. It’s worth noting that the figure will be before any tax deductions or national insurance is taken into account.