Employment Contract Healthchecks

By the end of the second month after the date of employment, each employee must be given written particulars giving details of key terms of employment. There's no legal requirement for a written employment contract, but it is strongly advisable to do so.

Not providing a written statement of employment particulars or providing one that does not comply with the requirements of the Employment Rights Act of 1996, exposes the employer to the risk of the employee referring to a tribunal. The tribunal will then determine what the employment contract should cover which could include an assessment of pay for the employee that may not be the same the employer intended. In addition the Employment Act of 2002, section 38 allows any employee who is, for example made redundant or successful in an unfair dismissal, equal pay or discrimination claim, to ask for additional compensation where the employer has not provided a written statement of employment particulars. It is critical to get an employment contract correct.

Employment Contracts need not be inflexible, but can contain areas where specialist legal advice may be required:

  • Flexible arrangements concerning hours of work, overtime and how overtime is paid
  • Flexibility over levels of pay
  • Flexibility over place of work if an employer has more than one location or expects employees to be mobile and prepared to travel for work
  • Sickness benefits, risk of breach of contract if an employer withdraws benefits
  • Confidential information – permissions of use and protection of employer's interests if an employee leaves
  • Notice periods – particularly for key employees
  • Return of company property – if not included in an employment contract, the employer may have to make a claim in the civil court as the police are reluctant to get involved because the employer provided the company property to the employee so there is no crime involved.
  • Different types of terms – express, incorporated, implied discretionary – and which terms can be overridden
  • Health and safety issues, including alcohol and drug use and smoking regulations
  • Gifts from the employer, eg at Christmas or on significant anniversaries
  • Discrimination – terms that affect a certain category of employee may be in breach of discrimination laws.

When buying a business with existing employees, it is vital that existing employment contracts are given a healthcheck to ensure there are no restrictive terms that prevent you as the new owner developing the business according to your business plans. It may be that some terms need amending and we can advise on how to do it. Call our specialist employment advisor, Ashley, on 0116 212 1119 for free initial advice.