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Contracts of employment – basics for employers

A contract of employment, like any other contract, is essentially an agreement between two parties. This means that once agreement is reached it the contract is made – it does not have to be in writing to be valid. But like most other contracts in business, it is much better to have it in writing to avoid uncertainty.

In any case, within two months of starting a job, an employer must provide the employee with a written statement of particulars, but this is not the same as the contract.

A contract of employment between the employer and an individual employee may well refer to other documents which apply more generally, such as the health and safety policies, the employer’s disciplinary procedures or a company handbook. Those documents need to be kept up to date.

  • Remember that, especially in regard to company handbooks, that you may not wish to make certain parts of them contractually binding; otherwise you would have to obtain employees’ consent if you wanted to change them, because you cannot unilaterally change a contract.

A contract of employment may contain a clause by which the employee agrees to opt-out from the restrictions regarding the maximum 48-hour working week. It is often better to have that opt-out as a separate agreement. In either case it needs to be in writing and it can be subsequently revoked by the employee. (You can refuse to employ someone who will not sign the opt-out, but you cannot penalise anyone for revoking it later.)

In some cases it may be suitable to consider a ‘zero-hours’ contract. The essential features of these are that:

  • There is no minimum amount of time for which the employer needs to provide work.
  • The employee would not be obliged to accept work offered by the employer.
  • In other respects, the duties and responsibilities of employers are the same – notably relating to such things as health and safety and the minimum wage.

You can read our full guidance on employment contracts here, and use our drafting tool to create an employment contract for a senior employee or a more junior employee, or a zero hours contract.

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