So you’re
thinking of hiring a new team member? This is a very exciting time for a business owner. Just make sure that you know what should be included in an employment contract so you can avoid any future misunderstandings, disagreements or, if worst comes to worst, employment tribunals.
Similarly, if you’re starting a new job, you will also want to be aware of what should be included in the employment contract so that you and your boss can get off on the right foot and you know your rights if you ever run into an issue at the workplace.
So if you find that you’re asking yourself ‘what does an employment contract include’, keep reading as we will be explaining exactly what should be included in a contract of employment.
Why is an employment contract necessary?
An
employment contract is an agreement between an employer and employee that clarifies the conditions, rights, responsibilities and duties of the employee whilst they are employed.
This clarification is important as it means that both parties are aware of what is expected of them and what they expect from the other person at work so that everyone is accepting of the work-life that the employee will have.
What are the main things that should be included in a contract of employment?
So, seeing as they are so useful, what does a contract of employment include?
Whilst there are basic details that should be covered in every contract of employment, every job is different so you may want to speak to a lawyer about certain clauses that are more complicated before including them. You may also want to get legal advice if as an employee you do not fully understand these more complex clauses in your written contract.
First of all, names and addresses should be included so it’s clear who the agreement is shared by.
Then, you should include the job title of the employee. If you are a large company you may have very specific job details and titles so you may want to include this too. However, if you’re a smaller company or want a level of flexibility when it comes to what tasks your employee will be carrying out, don’t include many details about the role, just use the job title.
Next, one of the main things that should be included in a contract of employment is information about the employee’s salary. It should state whether they will be paid weekly, monthly or annually and how much they will receive. Make sure to be realistic and don’t promise anything your company cannot deliver in the future.
Location and hours and duration of the job are also main things to include in an
employment contract. You do not have to give an address, just the name of a town or city.
Whether you want to estimate hours that will be worked in a day or times when the job starts/finishes, you should include hours of work in an employment contract. Remember that as an employee you will need to adhere to these hours so make sure they will work for you before starting the job.
Finally, if there are any benefits, statutory or enhancements added by an employer (e.g. annual leave, sick pay or pensions), these should be included in the employment contract, and you should make it known to the employee where they can find information about any disciplinary and grievances procedures. Hopefully an employee will not need this information, but if you have a falling-out, they will need to know who to talk to about any grievances or appeals, so make sure this is also included in the contract.
What are the terms of an employment contract?
The ‘terms’ of an
employment contract is the information included that needs to be respected by both parties. It usually concerns the conditions, rights, responsibilities and duties of the employee. The different terms that an employment contract includes can also be split into express terms, statutory terms, implied terms and incorporated terms.
Statutory terms are factors implied by the law, such as making sure you are paying at least the national minimum wage.
Express terms are the facts that have been mentioned in the employment contract.
They include:
- Salary, including any overtime or bonus pay
- Working hours including overtime hours - there is a legal limit for most employees on the maximum number of hours they can work per week
- Holiday pay
- Sick pay
- Redundancy pay, notice period and probationary period (you cannot give your employees a shorter notice period than the statutory minimum).
Implied terms are terms that must be followed but do not have to be written down, such as employers making sure the work environment is safe and that employees act lawfully when they are at work.
Incorporated terms may come from another set of documents such as an employee handbook or policy.
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Read more of our latest blog posts on
employment law, featuring all the latest legal news, analysis and opinion from our expert employment lawyers.
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Now that you know what should be included in a contract of employment, you may have realised that your contract does not reflect the situation you have found yourself in as an employer or employee.
