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Employment contracts

Employment contracts
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Employment contracts
Kate Lawson - Element Law by Kate Lawson - Element Law
Director - Element Law

As an employer, you are legally bound to provide your staff with a fair contract of employment.  Getting your contracts right provides clarity and protection for both you and your employees.  To help you, CapitalSpace legal expert Kate Lawson of Element Law has pulled together the key points that you need to consider.

What we mean by a contract

The terms of a contract are the rights and obligations that bind the parties to the contract. They can be express, implied or incorporated from other sources. The basic principles of contract law are that there must be:

  1. An intention to create legal relations
  2. Offer and acceptance
  3. Consideration between the parties

These principles apply to the employment contract in the same way that they apply to any other type of contract.

You may have in place a Contract of Employment which contains all your terms and conditions of employment, or you may have a brief document entitled Terms and Conditions of Employment, which is supplemented by certain sections of your Handbook which are contractual (as opposed to policy guidance).

What your employment contracts need to cover

There are certain key terms which by law you are required to have in your contracts.  This must include provisions on job title, place of work, salary, hours, holiday pay, sick pay, notice period and pensions.   You are also required to have in place a Disciplinary and a Grievance Procedure, but is it recommended these are non-contractual.

It is important to be clear and concise in your employment contracts, ensuring they are written in plain and accessible language. 

Restrictive Covenants

If you also wish to include in your contract Restrictive Covenants, restricting your employees for example from working for a competitor or poaching clients or staff after they leave your employment, these clauses must be very carefully drafted and bespoke for each employee, or they may be unenforceable as an unreasonable restraint of trade.

Implied terms

Note that in addition to the terms written into the employment contract, there are also certain terms that are implied into employment contracts which impose obligations on both employer and employee.  For the employee, these include the duty of fidelity, the duty to obey lawful and reasonable orders and the duty to exercise reasonable care and skill.  For the employer, there is the duty to pay wages, the duty to provide work, to give reasonable notice and to provide a safe working environment.

Say what you mean

Clear drafting is important:

  • To minimise the chances of a dispute between the parties about the true meaning of a term. (If the matter goes to court, the court may imply a term, or else refuse to imply one, either of which may lead to one party finding that this is a harsh result.)
  • To avoid the application of the “contra proferentem” rule, which means generally that where there is ambiguity a clause will in general be interpreted in favour of the employee.

Making sure your employment contracts are sound, could save you a lot of headaches in the future.  If you are in any doubt, it’s always best to seek qualified legal advice.

To find out how Capital Space business premises could benefit your growing business,  call 0800 107 3667

Read more about how the law affects your business from the CapitalSpace legal experts:

Meet the expert

Kate Lawson is a specialist employment law solicitor and HR adviser and trainer, offering solution-driven employment law and HR advice to employers and employees.