A contract of employment is a legally-binding agreement between an employer and employee. The term is defined by the Employment Rights Act 1996 as a contract of service or apprenticeship. Employment contracts consist of a mixture of express and implied terms.
Express terms are those which are actually stated in writing or given verbally. Written express terms are not restricted to written employment contracts but can include a number of other documents, such as a staff handbook.
The terms must meet any minimum legal standards such as the right to paid holidays and the right to daily and weekly rest breaks.
Any employee who has been employed for one month or more has the statutory right to a written statement of particulars of employment. This is covered in more detail below.
Other terms are implied into contracts. This may happen because the term is:
Examples of terms that are implied into a contract of employment include:
As many terms as possible should be clearly set out in writing and given to the new employee before or when they start the job. This will help avoid uncertainty or dispute between the employer and the employee about the terms.
A contract of employment is in many respects no different from any other contract that two parties might enter into. As such, it is governed by contract law, which means that there needs to be:
A contract of employment only applies where there is an employer/employee relationship. There’s an important distinction between a contract of service, which is a contract of employment and a contract for services, which might apply to a subcontractor or freelance worker.
It’s important that employers make the relationship clear at the outset, not least because employees have many more rights in law than non-employees.
Permanent Contracts – the employee is employed by the organisation on an ongoing a basis with no predetermined end date to the agreement
Fixed Term – the employee is employed by the organisation on an ongoing a basis with a predetermined end date to the agreement (note back tobacco fixed term contracts add up to create continuous service)
Term Time – a contract for workers who only work during the school terms, they normally have special terms for the treatment of holidays
Zero Hours – this is an evolution of a casual agreement, they are binding under law, but state that the relationship exists only when the employee works, when not working they are not tied to the organisation or its rules
The essential elements of the written statement of particulars of employment are set out in the Employment Rights Act 1996, as amended by the Employment Act 2002. Some information must be included in one document while other information can be delivered in instalments.
Items to be included in the main document:
Items that can be provided in instalments:
While the Employment Rights Act 1996 states certain items that must be included in the written statement of particulars, employers can refer their employees to their employee handbook or other policies for precise details of issues such as:
The written statement may additionally contain other clauses that an employer wishes to rely on. Where an offer letter or written contract sets out the main employment terms and conditions, this can satisfy the requirements of the written statement.
The written statement of particulars must be provided within two months of the employment starting.
There are exceptions to the requirement to provide a written statement of particulars for those employed for one month or less, or for employees in particular categories. However, it may still be advisable and good practice to provide such employees with a written statement to avoid dispute.