Thinking of employing Staff? Are your Contracts fit for purpose?
Posted on 29th November 2019 at 16:33
An employer must provide an employee with their employment terms, (known as a "statement of terms") within one month of the employee's start date. However, a statement of terms is the bare minimum required by law and does not protect employers properly. That is why an employment contract is much better for both employers and employees. A comprehensive contract of employment allows an employer to specify an employee's duties and responsibilities - so an employee knows exactly what is expected of them.
Below are some of the main things to include in an Employment Contract.
1. Names of the Parties
The employer's organisation details and the employee's full name and address.
2. Start Date
This is important as it also includes a brief statement to say that employment with a previous employer does not count towards the various rights that are gained by employees after two years of service. In other words, the employee starts again from zero with the new employer. (Exceptions to this are where an employer has taken over an organisation with existing employees and the TUPE regulations apply. In this case their employment rights are ringfenced).
3. Job Title and Description
This usually follows the job title and description specified in any recruitment advertisement and subsequent offer letter. To suit the employer, it also allows for flexibility in the employee's role.
4. Place of Work
Allows the employer to specify the location where the employee will work. However, it also allows for the employer to specify any other location in the future. This gives the employer much greater flexibility.
5. Hours of Work
The employee's hours are specified in the contract; however, the employee also agrees to work additional hours if the employer reasonably requests it.
6. Probationary Period
The employer can specify a trial period for the employee with the option of a short notice period at the end of the trial if the employee does not fulfill expectations. The period is usually 3 months, but the employer can also extend the trial period.
Details the employee's gross salary before tax, national insurance, and any deductions. It also specifies when payment is made.
The employer can state when the employee will receive their first work assessment and the timing of all subsequent regular assessments, for example, every 12 months.
This clause details all the circumstances in which the employer can make deductions from the employee's salary.
The employer can agree with the employee, which work-related expenses will be covered and when the employee will be reimbursed. However, to prevent errors and possible fraud the clause makes it clear that proof of payment is required.
This clause specifies when the holiday year will run from. This is important as the employer may wish to prevent employees taking busy work periods off, for example, Christmas time for hospitality, retail or entertainment industries. This clause also allows the employer to specify the number of days per year that an employee can take, (subject to a statutory minimum of 28 days) and whether bank and public holidays are included or excluded from this. The clause also includes further details regarding rolling-over holidays into the next year, restrictions on holidays where the employee has already given notice and on termination the pro rata payment in lieu of any unused holiday entitlement.
12. Sickness & Disability
Absence due to sickness is a significant cost burden for employers. This clause states by what time the employee must inform the employer that they will be unable to attend work, (it does allow for a third party to contact the employer on the employee's behalf). The clause also states when a doctor's certificate is required and whether the employee will receive statutory or contractual sick pay.
This clause states the pension provision provided by the Employer, all employers have a duty to provide a pension scheme now.
The notice period to be given by either the employer or the employee. However, this clause also provides a detailed list of actions that constitute gross misconduct allowing the employer to dismiss without giving notice.
15. Restrictive Covenants
This is usually only included in Employment Contracts for Senior Staff. It protects all confidential and commercial information belonging to the employer. Prevents an employee from setting up a competing business whilst still employed. Also, prevents an employee from competing for a set period of time and within a defined geographical area once they have left the employer. Other restrictions include attempts to encourage other employees to leave and work in a competing business. Finally, the clause states that any breaches will entitle the employer to seek legal redress, including damages for any loss.
If you are thinking of employing staff, it is very important that you get legal advice about your employment contracts to ensure that they are fit for purpose.
Contact our team on 0113 2007480.
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