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What you need to know about Contract of Employment

Contract of Employment – are they just a worthless piece of paper or a great tool for employers?

We take a look at the main points you need to consider when drafting and varying contracts in this Contract of Employment Q&A .

Do I need to provide my employees with a written Contract of Employment?

Contrary to popular belief, a Contract of Employment does not have to be in written form to be legally valid. However, if you entered into a Contract of Employment verbally, you are legally required to provide each employee whose employment is to continue for more than one month with a ‘statement of written particulars of employment’ within two months of the employee’s start of employment.

The statement should include, amongst other elements, the following:

  • The employer’s name and address
  • Employee’s details – name, job title, job description, start date
  • Salary, including payment intervals (e.g. weekly, monthly)
  • Working time and holiday entitlements
  • Notice periods
  • Pension schemes
  • Any applicable collective agreements

It is strongly advised to have a written Contract of Employment for all employees, laying down the rights and obligations of both the employer and the employee.

Do I need to consult the employee before implementing any changes to the contract?

In most cases employers will need to consult before making a change to a Contract of Employment. Making changes without the agreement of the employee may be considered a breach of contract and may give rise to a claim.

An employer who wishes to make changes should consult with the employee or, if applicable, their trade union or other employee representatives.

There are instances where contractual terms will change from time to time without needing formal consent from the employee. A good example of this is pay rises, where you can send the employee a brief note about their pay change and keep a copy for their staff file

What happens if an employee does not want to accept the change? 

If after lengthy consultation you cannot reach agreement, you can serve the individual employee notice that you will terminate the existing contract and offer a new contract with the new employment terms and conditions. If you wish to do this with 20 or more employees, you have an obligation to consult collectively with employee representatives or, if applicable, trade union representatives.

Author: Laura Chalkley, Senior Employment Law adviser and Partnerships team leader of Ellis Whittam

To obtain advice on this topic, please contact bira legal