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Under the Employment Rights Act 1996 employers are required to provide most employees with a written statement of the main terms of their contract within two calendar months of starting work. Many employers now incorporate that written statement into a contract of employment.
A contract of employment is the agreement between employer and employee which forms the basis of the employment relationship. However, although employment contracts do not need to be in writing to be legally valid, having written terms is more likely to reduce disagreements later on in the employment relationship.
The complexity of the employment contract will normally vary depending on a number of factors. For instance, the seniority of the employee, the type of confidential information that employee is likely to come into contact with and so on.
The terms of a contract of employment may be oral, written, implied or a mixture of all three. If you do not have any kind of contract of employment with an employee, you must – at the very least – issue them with a written statement.
For obvious reasons, clearly documenting the terms with which you are employing your staff is vital. If a dispute does crop up the contract will form the basis of what was agreed and on what terms.
Failure to provide employees with the minimum of a written statement of employment within two months is unlawful and could result in an employment tribunal. To ensure that the terms of a contract are also lawful and appropriate, it may be advisable to use a specialist employment lawyer to help you draw up a basic template for future use.
Core information to be covered includes:
- notice period
- sick pay and incapacity
- holiday entitlements
- pension schemes
- company cars
- restrictive covenants
- collective agreements
- disciplinary procedures
- share option schemes
- home working
- part-time working
Contracts can be used in conjunction with an employee handbook containing more detailed HR and employment policies.
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