Contracts of Employment

It is all too often the case that an employer will only see how important it is to have adequate contracts of employment after they have lost at an employment tribunal. If a challenge is made to an employer and they cannot show that their contracts are legally compliant and up to date, then the reality is that any disputes will usually be resolved in the employees favour. It can almost be said that using inadequate contracts is as risky as not having any contracts at all.

As an employer, you have a minimum requirement to provide your employees with a written statement of terms and conditions of employment. These should be issued within 8 weeks of the employee starting and should not be confused with a contract of employment. Terms and conditions of employment are required by law under section 1 of the Employment Rights Act 1996, and the following are some examples of what must be included:

• It may sound basic, but include the name of the employee
• Details of when the employee started work. This will be used to calculate an employee's statutory rights
• The employee's job title or duties must be stated. It is advisable to retain the capacity to be flexible in this area
• The wages/salary of the employee, along with how and when it will be paid
• The employee's work location or locations must be stated. Due to the nature of some sectors, it is sometimes the case that a 'mobility clause' is included, in order that you can request employees to work at different locations
• You must list normal working hours, the holiday year, holiday entitlement and the rate at which holiday accrues.
• With regards to pensions, you must indicate whether a contracting out certificate is in force.

There are just a few of the mandatory details that you must include in the terms and conditions. You then have the capacity to start to pad these terms and conditions out so that it forms a comprehensive contract of employment.

When you look at the operations of a typical business, there will be numerous other activities and occurrences that your staff undertake during their day to day routine which will not be covered in a basic set of terms and conditions. These could include driving company vehicles, external training and using the Internet for example.

A comprehensive contract or employee handbook enables you to give clear guidelines to your employees on how to conduct themselves whilst working; it places an onus on the employee to work to the terms of the contract, and also provides you with an opportunity and documentation to counter any spurious claims. Imagine trying to defend a claim made against you for deducting wages, when you do not even have a section concerned with deducting monies within your contracts.

You should not feel that using contracts of employment and employment policies is an unnecessary luxury. You will be ensuring that not only are you making your employees fully aware of what is expected of them and fulfilling your obligations as an employer, you are also protecting yourself against the consequences of non-compliance, which can be crippling to any business.

_{* Compiled by Citation Plc}