What’s In A Contract Of Employment

I often find that once a new employee has signed on the dotted line, the employer forgets about the contract of employment, whilst employees only get interested when it is too late – after they have fallen out with the employer.

But what is the legal position? Every employee is entitled to receive a written statement setting out the most important terms of employment no later than two months after he or she starts work. Whenever there is a change in those terms the employee is entitled to a written statement within a month setting out those changes.

The most important terms in the main statement are the job title, the scale or rate of pay or the method of calculating it, when the period of continuous employment began, how often you will be paid, any terms and conditions relating to hours of work, entitlement to holidays and holiday pay (including whether there is an entitlement to any of the Bank Holidays), sickness and sick pay details as well as what notice should be given. Disciplinary and Grievance rules and procedures must also be identified.

If you are working for an employer who has not given you either a written contract of employment or a written statement of your main terms of employment, you should ask for what you are legally entitled to, that is a written statement setting out the main terms on which you are employed. Working for someone on the basis of a verbal agreement is at best undesirable and at worst a recipe for an expensive legal dispute.

If you are about to accept a new job make sure you read any contract or statement you are given before you sign it. Make sure it accurately reflects what you have been told verbally. Particular things to look out for are things like notice periods. Remember most people have little job security for the first year of employment. If your new employer wants to get rid of you, how much notice or notice pay will you get? Is there a probationary or trial period with a shorter notice period than what you were told at your interview? If you were told that you would be included in a bonus scheme what does your contract say? How fixed or flexible are your hours of work? If you are required to work longer than you were told at your interview, will you be paid overtime? If so, at what rate? Do you have to take your holidays at set times of the year? Can you be required to work on Bank Holidays? If you want to leave are you prevented from working for an organisation that competes with your employer? If you are paid commission will you still get paid what you thought you are due once you have left?

You will have heard the saying “don’t sign anything unless you have read it” and you will all do exactly the opposite from time to time (as I have done). For most of us our job is vitally important to our financial well-being. You wouldn’t buy a house without looking around it – don’t take a job without reading the contract.

Employment law currently changes at least twice a year. Employers who do not update their contracts of employment to meet their own changing requirements, let alone the changing law, are making a mistake.

Employers should set out up to date express terms of employment in a written contract to ensure that there is no doubt or ambiguity about the terms on which someone is employed. If the contract is unwritten or not complete it is down to the Courts to decide what the parties must be taken to have agreed. The Courts will do this in a variety of ways. Terms of employment can be implied by the conduct of the parties. Similarly, a term may be implied if it is so obvious that the parties must have intended it, sometimes this is call the “officious bystander test”. Sometimes terms can be implied by custom and practice.

What is certain is that an employer who leaves it to the Courts to write or complete his contracts of employment is a braver man than me.