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What should be included in a contract of employment?

7 February, 2018

We are often asked when employees should receive their written terms of employment and what they should contain.

Employees have the right to receive a written statement of their principal terms and conditions within 2 months of the start of their employment.

A qualifying employee, who has not received a written statement may refer the matter to an employment tribunal.

A tribunal can award compensation of two or four weeks’ pay (at the tribunal’s discretion).

A week’s pay for this purpose is subject to a statutory limit of £489 per week.

As a minimum this statement must include details of the following:

  • Name of employer and employee
  • Employment start date
  • Job title or brief description
  • Place of work
  • Remuneration and pay intervals
  • Hours of work
  • Holiday entitlement
  • Entitlement to sick leave and pay
  • Pension scheme provision
  • Notice periods or date of expiry of fixed term contract
  • Details of any collective agreements in force
  • Reference to disciplinary and grievance procedures

Although most of these details should be contained in a single document, reference may be made to the information contained in other documents to which the employee has access, such as a disciplinary procedure or pension scheme details.

We also recommend a variety of other clauses, aimed at helping protect the business.

These may include areas such as:

  • Employee warranties
  • Travel, flexibility and expense requirements/entitlements
  • Lay offs / short time clauses
  • Bonus and commission schedules
  • Eligibility for other non-monetary benefits
  • Deductions clauses
  • Holiday clauses including carry over or loss if not taken
  • Property and equipment issued
  • Confidentiality
  • Post termination restrictions
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