A contract of employment is an important agreement between the employer and employee that sets out the terms of employment. While many assume the contract of employment is merely a formality, it includes the various terms on employment conditions, rights, responsibilities, and duties.

Many are unaware of just how binding a contract of employment is or if it needs to be in writing for it to be valid. A contract dispute lawyer will tell you that the agreement is binding until it comes to an end when the employee gives notice or is dismissed or the terms are changed. However, a contract of employment doesn’t necessarily have to be written down and comes into effect as soon as a job offer is accepted.

While a written contract or similar document is a contract of employment, verbal agreements, the terms outlined in an employee handbook or company notice board, offer letter from the employer, collective agreements, and implied terms are all legally binding.

Implied terms, as employment contract solicitors would tell you, include employees not stealing from employers and a safe and secure working environment being provided by the employer. In addition to this, any terms required by law are also applicable.

Collective agreements

What if the employer comes to an agreement about working hours with a trade union? Is this not applicable until it’s included in each individual contract of employment? Employment contract lawyers say that a collective agreement, which is when an employer has an agreement with employee representatives like trade unions or staff association, are also binding.

Collective agreements can include terms like how negotiations will be organised and who will represent employees.

Written statements

While verbal agreements are binding, employers are required to give employees a written statement of employment if the contract of employment lasts for a month or more and this statement must be provided within two months since the start of employment. If the employee works in another country for more than a month during their first two months of employment, the employer is required to give a written statement before they leave.

While this written statement isn’t a contract of employment, it includes the main conditions of employment. Additionally, the written statement isn’t necessarily one document as an employer may give the employee different sections at different times. In the event that this happens, employment contract lawyers say that one of the documents, called the principal statement, must include certain terms.

The name of the business, the employee’s name, job title or description of work, and start date must be included in the principal statement, as should how much and how often the employee will get paid. It should also be mentioned if a previous job counts towards a period of continuous employment and if so, the date the period started.

Hours of work as well as specifics like working on Sundays or at night and overtime must also be included, as should holiday entitlement and if that includes public holidays. The principal statement must also include where the employee will be working and if they may have to relocate. If an employee works in different places, employment contract solicitors say, the principal statement must include where these places will be and the employer’s address.

While these are terms that must be included in the principal statement, a written statement must include how long a temporary job is expected to last, end date of a fixed-term contract, notice periods, collective agreements, and pensions. Who to go to with a grievance, how to complain about how a grievance is handled, and how to complain about a disciplinary or dismissal decision must also be included.

According to regulations, a written statement need not include sick pay and procedures, disciplinary and dismissal procedures, and grievance procedures, but must mention where the relevant information can be found.

In the event that an employee has to work abroad for more than a month, the employer is required to state how long they will be abroad, the currency they’ll be paid in, additional pay or benefits, and terms relating to their return to the UK. This can be given to the employee in a separate document.

If the employee is working in a country in the European Economic Area, the legal minimum in that country for working hours and rest breaks, holiday entitlement, and minimum pay including overtime has to be given to the employee.

Published date - April 17, 2020