All you need to know about contracts of employment

01 July 2011
All you need to know about contracts of employment

XpertHR Small Business - a service run by Caterer's sister website, XpertHR - offers an overview of contracts of employment

Must a contract of employment be in writing? There is no legal requirement that an employment contract be put in writing, but it is advisable to do so to avoid dispute.

As a minimum, the employer must give each employee a statement of written particulars giving details of matters such as pay, holiday entitlement and job title, by the end of the second month after their employment has begun. This statement of written particulars of employment is not the same as the contract, although it can be included in the contract. If there is no contract, the statement is good evidence of the terms as seen by the employer.

Must the contract be signed by the employee? There is no legal requirement for the employee to sign a written contract, but it is advisable for the employer to require them to do so, as this will help to avoid uncertainty as to the agreed terms if a dispute arises.

What if there is no written contract? There will still be a contract between the employer and the employee even if it is not in writing. The contract can be made up of terms agreed orally between the employer and employee, or a combination of oral and written terms. There can also be terms that have not been expressly agreed but that are implied into the contract, for example, based on custom and practice in the workplace.

What information must be included in the statement of written particulars? Certain information must be provided in a single document known as the principal statement of written particulars. The statement must include the names of the employer and employee; the date when the employment began; the date when the employee's period of continuous service began; the scale or rate of remuneration and the method of calculating it; the intervals at which remuneration occurs; any terms and conditions relating to hours of work; entitlement to holiday, including public holidays and holiday pay; the employee's job title or a brief description of his or her work; and the place of work or, where the employee works at various places, an indication of this and the employer's address.

The employer must also provide in writing - although this could be in separate documents: terms relating to sickness; any pension terms; the notice to be given by each party; the expected length of employment (if temporary); any collective agreements; any terms relating to working abroad; and details of the disciplinary and grievance procedures.

Can an employer change the terms of an employee's contract? The employer can change the terms of a contract if it has the consent of the employee. The employee can consent to the change orally, in writing or by their behaviour.

The contract might include a clause allowing the employer to change certain terms. Such a clause will be very strictly construed by a court or tribunal if there is a dispute, and the employer must not breach the duty of mutual trust and confidence when exercising its right to change the contract.

If the terms in the contract are changed without the employee's consent, where the contract does not give the employer the right to make the change, the employee can claim breach of contract and damages, and in some cases unfair constructive dismissal, or unlawful deduction of wages.

Is it possible to change the terms of a contract by dismissing an employee then re-engaging them under different terms? If the employer has a genuine business need to change the terms of the contract and dismisses and re-engages in order to do so, it has been held by the tribunals that the dismissal can be a fair dismissal. Depending on the numbers to be dismissed, the employer must comply with the collective redundancy consultation procedure prior to notifying employees of their dismissal. This is because the definition of "redundancy" for collective consultation purposes is any dismissal for a reason or reasons not related to the individual. This applies where the employer is proposing to dismiss 20 or more employees within 90 days.

If a candidate accepts a job offer can the employer change its mind and withdraw the job offer if nothing has been put in writing? A contract of employment comes into force as soon as there has been an unconditional offer of employment and acceptance, even if these are verbal. Any withdrawal of the offer will constitute a breach of contract, entitling the prospective employee to sue the employer for damages. In most instances this would be an amount corresponding to payment for the notice period that the employee would have had in the job.

XpertHR Small Business is the easy-to-use online resource specially tailored to small-and medium-sized businesses, which gives you simple, up-to-date guidance on all employment law and staff issue

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