Contract of employment

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 Employment Law Questions & Answers
Other Regulations Affecting Employment



What should be included in an employment contract?

Q1: Is a worker an Employee or Self-Employed?
A1: The difference between being an employee or self-employed will affect that person's employment rights. In deciding this question the law says that the following has to be looked at:
a) Does the employer control what work is done?
b) Does the employer control where, when and how the work is done?
c) Does the employer provide holiday and sickness pay?
d) Is the employer taking the financial risk?
e) Is the employer responsible for paying Tax & National Insurance Contributions?
If the answers to the above are yes then that person is likely to be employed, rather than self-employed, no matter what the employment contract says.

Q2: What information must an Employer give to an Employee when they start?
A2: The employer by law has to give an employee a "statement" of employment, within 2 months of the employee starting work.
This covers what would normally be in a Contract of Employment; however this is not a contract between the employer and the employee.
If there is a dispute and the employer has not given the employee a contract, the court may use the terms in the statement to decide the terms of employment.
If no statement has been given within 2 months, an employee can apply to an Employment Tribunal at any time after the 2 month period, (or within 3 months of termination of the employment) for the tribunal to determine what should have been in the statement.

Q3: What should be in an employment statement?
A3: The employer must include the following terms in an employment statement:
a) Names of the Employer & Employee.
b) Date the employment started, including any periods of continuous employment with a previous employer, where the previous employer was taken over by the new employer.
c) Pay, including the employee's scale of pay and how it is calculated.
d) When the employee will be paid (weekly, fortnightly or monthly).
e) Hours of work and terms related to the employee's hours (for example if the employee works shifts or overtime).
f) Holidays (how much, when and whether the employee will get holiday pay).
g) Sickness procedure and entitlements.
h) Pension Scheme details.
i) Notice period.
j) Job Title and description of job.
k) Where the employee is expected to work.
l) Any collective agreements which directly affect the terms and conditions of employment.
m) Details of work abroad, if it is for longer than 1 month.
n) The length of the contract, if the employee has been employed on a fixed term contract.
o) Disciplinary Rules and Complaints Procedure


Q4: What happens if the employer decides to change the employment statement?
A4: The employer must tell the employee of any changes as soon as possible.
The law states that this must be within 1 month of the change.

Q5: Should an employer give an employee a written contract?
A5:An employer does not have to give the employee a written contract or if they do it may not necessarily cover all the details of their employment.
However, an employee is entitled to an employment statement.

Q6: If an employee does not have a contract what are the terms of their employment?
A6:If there is a dispute the court will decide what the actual terms are by looking at all the other documents and evidence. The terms will then usually be what is in the employee's "statement" given to them by the employer. See Answer 3
Other sources of terms that a court may say are part of the contract are as follows:
a) The letter the employer sent offering the job (if one was sent). These letters often contain important information about the terms if the job is accepted.
b) Terms agreed between the employer and any Trade Union that represents the workforce. This includes local and national agreements made between employers and Trade Unions.
c) Any terms stated in an advertisement for the job.
d) The employer's works rules and staff handbook, this includes rules placed on the staff notice board by the employer.
e) Spoken agreements between the employer and all the employees or individual employees.

Q7: What obligations/duties does the employee owe to their employer?
A7: These may be explained in the contract of employment, but the law also says that there are certain obligations and duties owed by an employee to their employer, even if the contract does not mention them.
These include:
1. To do what a reasonable employee would do in any situation.
2. Duty to be honest.
3. Not to disrupt business, for example, taking part in industrial action.
4. Disclose wrongdoing (does not include "spent" convictions). But, the employee must disclose wrongdoing by other employees, even if this will incriminate them.
5. Carry out and follow orders of the employer, (as long as they are legal).
6. Not to disclose the employer's confidential information.
7. Work with reasonable care and skill.
8. Look after the employer's property if using it.
9. Not to compete in business against the employer while still working for them as an employee.
10. Not to take bribes.
11. Be prepared to change when the job changes, for example, if computers or other machinery are introduced to help the employee do their job.
12. Give any inventions to employer if these are developed by the employee during their employment.

Q8: What obligations/duties does the employer owe to the employee?
A8: An employer owes their employee the following duties, which again can be implied by the law or may be found in the employment contract.
1. Duty to pay the employee the agreed amount if the employee arrives for work and is able to work.
2. Provide the employee with work to do, (this is limited). However, for example, if the employee is paid by commission and the employer does not give the employee any work or if not working could damage the employee's reputation, for example if you are a senior executive in a company. Then the employer may have broken their duty to the employee.
3. Observe Health & Safety Regulations.
4. Give employees correct information about rights under their contract.
5. Give employees reasonable opportunity to have their complaints looked at.
6. There is no duty to provide references to an employee. (Except where the reference is required by the Financial Service Authority.) However, if a reference is provided the employer owes a duty to the employee to make sure the reference is completed with reasonable skill and care and is true, accurate and fair. The employer also owes a duty to the receiver of the reference not to make any negligent statements about the employee.
7. The employer and employee also owe each other a duty of "Mutual Trust & Confidence", basically they must show respect for each other.
Examples of breaches:
Harassing or victimising employees, particularly in front of other employees who are less senior than the victim.
Physical violence by employer or employee.
Theft by employee.
There is no duty to pay Contractual Sick Pay.
There is an obligation on an employer to pay statutory sick pay for the first 28 weeks an employee is absent due to sickness in any period of 3 years. If an employee is eligible.
They will be entitled to at least 4 weeks holiday in any one year period.

With thanks to BB