Contract of Employment
Verbal contract
Even if a contract may be entirely or partially oral (also known as verbal), the employment contract is the most crucial document that governs the relationship between the employer and the employee. However, in order to ensure that there is no room for doubt, it is strongly suggested to provide all members of staff with detailed written employment contracts that include all of the significant facets of the relationship.
Terms
Theoretically, there is a nearly limitless number of different terms that may be included in a commercial contract. However, the number of clauses that can be included in employment contracts is severely limited due to regulatory requirements and constraints, as well as the personal nature of the service that is provided between an employee and an employer. In most cases, the courts will not require a party to carry out an action that is specified in an employment contract; but they will prohibit parties from carrying out activities that would violate the terms of the contract.
Written particulars
It is essential that the new employee or worker be provided with a copy of written particulars if not the contract before they begin working, if at all feasible, with sufficient time for them to examine it and ask questions, with the end goal being that all of the essential terms and conditions of employment or engagement be agreed upon in advance. If this is not possible, it is still essential that they be provided with sufficient time to do so. This is of the utmost importance in the situation of an employee whose employment contract contains major confidentiality terms as well as post-termination restrictive covenants, since these clauses will not bind the employee unless the covenants are explicitly agreed to by the employee (and given that they are reasonable).
Custom and Practise
An employer may be able to rely on a custom and practise argument later down the line in relation to terms and conditions, such as pay and benefits and employee duties, as the day-to-day practise will have already been established, and it can be proven. If a contract is not agreed upon in advance, as can occasionally occur, the employer should be able to rely on this argument. This line of reasoning, however, won't hold water when it comes to clauses that discuss occurrences and circumstances that occur less often or that are designed to take effect after the employment relationship has come to an end, such as restrictive covenants.
Statutory requirement to give information
There is no legal obligation for restrictive covenants to be included in a contract of employment; nevertheless, there is a legal duty to provide an employee and, beginning on April 6, 2020, a worker with a large quantity of information from the very first day of employment. A single document containing the majority of the required information must be handed over on or before the first day of work at the latest. That can be the contract of employment (or the contract for services for a worker), but the information can also be given in a separate document called a principal statement of employment particulars (sometimes called a 'section 1 statement' after section 1 of the Employment Rights Act 1996, which is where the obligation is set out). The following information is required to be included in it:
the names of the employer, and the employee or worker;
the date the employment began
with respect to an employee only, the date their period of continuous employment began;
the scale or rate of pay, or the method of calculating pay;
how often payment will be made;
that the employee or worker has to work on a Sunday, if relevant;
that the employee or worker has to work overtime, if relevant;
terms and conditions relating to:
hours of work, including normal working hours, the days of the week to be worked and whether they are variable (and if so, in what way;
holiday entitlement, public holidays and holiday pay; and
any other benefits.
the job title or a brief description of the work;
how long the employment is intended to last, and, if it is a fixed-term contract, what the end date is;
any probationary period, including its conditions and duration; and
the place of work, or an indication that the employee or worker is required to work at various locations, and the employer’s address.
If an employee or worker is expected to perform their duties outside of the United Kingdom for a length of time longer than one month, the employer is obligated to inform them in the primary statement of employment:
the length of time that they will be forced to work overseas;
the currency in which they will be compensated;
any extra compensation and other benefits that will be offered as a consequence of being compelled to work overseas; and
any terms and circumstances pertaining to their return to the United Kingdom.
Recent Updates
Since April 2020, the employer is obligated to notify the employee or worker about any training the employer needs them to take, as well as whether or not the employer will pay for the employee or worker to complete the training. In addition, the employer is required to inform the employee or worker about whether or not the employer will pay for the employee or worker to complete the training.
In addition, on the first day of employment, employers are required to provide the employee or worker with information about the following topics, however this information is not required to be included in the primary statement:
sick leave and sick pay;
any other paid leave; and
length of notice of termination the employee must give and is entitled to receive.
There is an additional set of information that businesses are required to provide to their workers and employees. This information may be provided at any time, and it does not have to be provided immediately, as long as it is provided during the first two months of the worker's employment. This article contains information regarding:
pensions;
any relevant collective agreements that directly affect the terms and conditions of the employment;
any non-compulsory training the employer requires the employee or worker to complete; and
disciplinary and grievance procedures.
Up-to-date statement
In addition, workers and employees have the right to seek from their employers an up-to-date statement of particulars, which must be sent to the worker or employee no later than one month after the request has been made. Because employers run the risk of inadvertently converting a non-contractual benefit into a contractual one if they include some of this information in a contract rather than a non-contractual separate statement of employment particulars, rather of include this information in a contract.
What if employers don’t give a statement?
Employees and workers do not have the legal right to assert on their own that they were not provided with the information necessary by section 1 of the Employment Rights Act 1996. However, if an employee or worker wins a second claim in the employment tribunal and can show that they were not given a compliant written statement, they may be granted an extra two to four weeks' pay (subject to a statutory ceiling of £1,142 or £2,284 for the time period from 6 April 2022 to 5 April 2023). While not a significant figure in and of itself, it may increase if several employees of a major company are all successful in asserting claims in connection with other cases. To avoid using language or terminology that may be used to prove that a worker was truly an employee, the advice is to provide workers a statement that is distinct from the one that employers give employees.
