A contract of employment is an agreement between an employer and employee and is the basis of the employment relationship.
A common misconception with issuing a contract of employment is that many employers believe that one only needs to be issued if you have employed individuals on a permanent or regular basis.
However a contract or a ‘Written Statement’ of the main terms and conditions of employment must be issued to anyone (even if they only work one day a week for you) that is going to work for you for longer than one month and this ‘contract’ must be issued within two months of them joining your business.
The Employment Rights Act 1996 stipulates what a Written Statement must include (such as, but not limited to, the employer’s name, the employee’s name, job title, start date, how much and how often an employee will get paid, the hours of work etc.) and as an employer you must satisfy these minimum requirements when employing staff.
A contract of employment goes further than a Written Statement and allows you, as the employer, to include more specific terms relative to your business, such as details relating to your absence or holiday procedures, confidentiality and intellectual property obligations, post termination restrictions etc.
Some people might also assume that a contract of employment consists of only those things that are set out in writing between an employer and an employee. However, contracts are also made up of terms that have not been spelled out and are known as implied terms.
For example, a contract does not need to set out that the employee won’t steal from you – this is an implied term. Conversely, as an employer, you must provide a safe working environment and you shouldn’t ask your employees to do anything illegal, such as drive an uninsured vehicle. Again, these are implied terms.
Perhaps the most crucial implied term of an employment contract is the term of mutual trust and confidence, a term which must exist between an employer and employee.
The key point to remember is that irrespective of how often your staff work for you, every member of staff must be issued with a contract (or Written Statement as a minimum). If you have engaged staff to work for you under any of the following guises, they still need a contract:
- Part time
- Fixed term
- Casually
- Seasonal
- As a temp
- On a zero hour contract
Having a written contract also gives your employee’s certainty about their obligations to you (and yours to them) and can help to prevent or resolve disputes in the future.