Employment contracts: an employee guide

If you understand the terms and conditions of your contract of employment, you’ll be better able to stand up for your rights at work and to avoid being unfairly dismissed or constructively dismissed. 

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    In this guide, we outline the different kinds of employment contracts that you may be given and what should be included in them. 

    See also our related guides on Contracts for senior executivesBreaches of employment contract, ‘Can your employer change your contract?

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    What is a contract of employment?

    Put simply, a contract of employment is a voluntary agreement (verbal or written) for you as an employee to work and for your employer to pay you for your work.

    An employment contract exists if you’re employed, whether it’s in writing or not.

     

    Is a written contract of employment essential when you’re doing paid work?

    A written contract doesn’t have to exist for there to be a valid employment contract between you and your employer. What’s more, your employer is not legally obliged to provide you with a written contract (but see below).  

    Having said that, a written contract is highly desirable, so as to ensure there’s no misunderstanding about your job role and the terms and conditions of your employment.

    It can help avoid future disputes between you and your employer and also be invaluable in helping to settle any disputes.

     

    Is a written contract the same as a statement of employment particulars?

    A written employment contract is not the same thing as a ‘written statement of employment particulars’.

    Your employer is legally obliged to give you a written statement within two months of your starting employment. (See this gov.uk page for further details.)

    The written statement is usually shorter than a full contract and includes your starting date, job description, pay, hours of work and any disciplinary or grievance procedures your employer has.

    These terms and conditions become part of your employment contract and are one of your most important employment rights.

    What kinds of employment contracts are there?

    The most common types of employment contracts are::

    Permanent contracts

    A permanent contract is for employees who work full or part-time and receive either a salary or hourly rate. The contract only ends when the employee or employer terminates it.

    An employee with this type of contract is entitled to all relevant statutory employment rights.

    Temporary or fixed-term contracts

    When a role is not expected to become permanent it is referred to as a temporary, or fixed-term position.  In most cases, contracts for such roles include an end date.

    After 12 weeks, an individual on a temporary contract will usually have the same rights as someone who is permanently employed to do the same job.

    Freelance contracts

    A freelance contract is an agreement drawn up to hire an external worker (also known as a freelancer or contractor) for a particular project or period of time.

    A freelance contract occurs when the employer is not under any obligation to offer work to the worker. Similarly, the worker is not obliged to accept work offered to them by their employer.

    This means no fixed or regular hours are worked. Either the worker or employer can terminate the agreement at any time.

    Zero-hours contracts 

    Under a zero-hours contract, an individual typically undertakes to carry out work for an employer, although the employer does not have to guarantee how much work or when work will be offered.

    The person doing the work is only paid for the hours they actually work. 

    All zero-hours workers have access to at least some of the benefits enjoyed by traditional employees, such as holiday pay, the national minimum wage and protection against discrimination.

    For more detail see this gov.uk article.

     

    What should be in a written contract of employment?

    A written employment contract details the rights and responsibilities of both your employer and you as the employee. A permanent contract typically includes the following:

    • Employer’s details: Their name and address and your employment location if it’s different from the employer’s main address
    •  Employment location: This has become increasingly important since the move to home-working and remote working during the covid pandemic. Your contract should state whether or not your main place of work is your home or at another work/office location provided by your employer.  If you are not working entirely remotely, then it should also clearly state what proportion of your time you are expected to attend the work location in person.
    • Your details as an employee: Your name, job title and responsibilities
    • Employment dates: The date your employment starts (and ends, if it’s temporary)
    • Salary/wage: Your rate of pay, whether it is a full-time or part-time salary (a fixed payment) or an hourly wage (variable, depending on the hours worked and/or performance) and how frequently you will be paid (eg weekly or monthly)
    • Working hours: The number of working hours associated with your role (usually weekly) and whether these hours can be worked flexibly or are fixed to specified times each day. Also whether the hours will be the same each day/week, or be likely to vary. (See our guide on flexible working for further details)
    • Notice period: As a minimum, the contract should state the notice period that has to be given to you or by you and whether that’s the statutory minimum or your employer’s scheme if it’s more generous. (See our guide on notice periods.)
    • Holiday and sick pay: Your annual holiday entitlement (including when it starts and ends) and sick pay arrangements, whether statutory or based on a company scheme.
    • Any restrictive covenants or ‘non-compete’ clauses: Any restrictions that prevent you from competing with your employer or contacting their clients/customers for a specified period of time after you have left their employment
    • Any ‘non-disclosure’ or confidentiality clauses: These are designed to stop you from disclosing sensitive information to a new employer or other third parties.
    • Any additional benefits: These include financial benefits such as bonuses and non-financial benefits such as life insurance, private health insurance, gym membership

    You should review your contract of employment carefully before you accept it, and take particular note of clauses such as restrictive covenants which will affect what you can do in your next employment.

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    Can your employer change your contract?

    Your employer can make changes to your contract so long as you agree to them voluntarily.  The changes and your agreement with them should always be made in writing.

    If you are not sure about the proposals, we recommend that you seek legal advice before agreeing to anything. 

    There are also some situations where an employer can change some of the terms of your contract, including by way of a ‘flexibility clause’ in your contract.

    See our separate guides on breaches of contract and on changing your contract 

    Next steps

    At Monaco Solicitors, we can check over your new contract to ensure that it complies with your employment rights and that there are no clauses that adversely or unduly restrict you, either when you start your new job or in the future. 

    We can also help you to negotiate compensation terms and a settlement agreement with your employer if they have breached your employment contract.

    If your employers won’t negotiate a settlement, we offer legal support for any related claim you want to make to an employment tribunal or civil court.

    If you would like a no-obligation consultation, get in touch with us today:

    • via this link 
    • by phone 020 7717 5259
    • by email: communications@monacosolicitors.co.uk