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Back to Basics: The Employment Contract

It’s ‘back to school’ this month and I am sure those of you with school age children may be jumping for joy. Therefore, this month we thought we would write a few articles on back to basics, starting with the employment contract.
While, I am sure, most of you will have employment contracts in place, you might not be surprised to hear that when asked how often these are reviewed and updated, this number is significantly lower.

So, if you haven’t reviewed your contract in a while, here are 9 things for you to consider:

  • Ensure that the contract sufficiently defines the relationship. A simple contract may suffice for general office workers; however, you may require a more complex one for say drivers, shift workers or senior management.
  • Ensure the termination clause is correct. An employment contract can be terminated in a variety of ways, either with or without notice. Notice requirements should be written into contracts. If no notice is stated, the statutory minimum of one week per year served (after the first month) up to a maximum of 12 weeks will apply.
  • Payment in lieu of notice can be stated as a contractual term and, in the absence of such a clause, employers cannot make such a payment as this would represent a breach of contract.
  • Non-competition and non-solicitation clauses are useful, particularly for certain types of key employees. These are usually known as restrictive covenants. However, they need to be tailored to the specific business and specific employee. The courts default position is that these terms are unenforceable (because they often restrict the individual’s ability to find work) unless it can be demonstrated they are reasonable considering all of the circumstances.
  • Specific clauses should be carefully considered for different types of employees, e.g. mobility, lay off, bonus, intellectual property, garden leave and restrictive covenants.
  • Making changes. A variation clause is useful for allowing minor changes in a contract (such as when your holiday years begins and ends). However, varying key terms (e.g. pay, hours, overtime, etc), can only be done by agreement.
  • Probationary periods can be useful if you want to restrict the benefits available to employees in the early months (e.g. extended notice periods). However, a probationary period makes no difference to the employee’s basic contractual rights. Dismissal during the probationary period should be treated no differently to any other dismissal. Remember that employees with less than two years’ service cannot claim unfair dismissal but may still be able to claim breach of contract.
  • Legislation dictates minimum terms with regard to notice of termination of employment, hours of work, breaks, rest periods and holidays. Ensure that your clauses are in-line with current legislation particularly in relation to overtime and accrual of holiday.
  • The Pensions Act 2008 places a legal duty on employers to automatically enrol qualifying workers into a pension scheme and contribute towards their retirement.

If you found this article interesting why not read our article about probation periods and holidays.

Here at SCE Solicitors, we have a wealth of experience in assisting employers maintain contractual documents. If you would like to discuss any questions relating to your employment contracts or would like us to review your contracts, please contact me on 01133 50 40 30 or at hello@scesolicitors.co.uk for a free legal audit.

If you would like to be kept up to date with any Employment Law changes, please subscribe to our monthly newsletter.

SCE Solicitors is a boutique employment law practice based in Leeds which advises clients nationwide.  Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with SCE Solicitors or other professional counsel before acting on the information contained here.

Samira Cakali

Samira Cakali is a pragmatic and approachable solicitor advocate with extensive contentious and non-contentious experience in the fields of employment law as well as civil litigation, within a range of commercial businesses from SME’s to multinationals as well as senior executives.

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