Contracts of Employment

Posted 13 Aug 15

When you decide to develop your business, one way to make management easier is by hiring an employee.

In a previous article, we talked about the recruitment process, but when you find a perfect candidate for the role you’re looking someone to fill, you will be required to form a legal agreement between you and your new employee.

In order to avoid any confusions and problems in the future, it is important that you understand your responsibilities and privileges as an employer, as well as responsibilities and rights of your staff. Legally, you are required to sign a contract with your employee in the first two months of them starting to work with you. However, the sooner you do this, the easier it will be to avoid any difficulties and inconsistencies in the future.

What to Include in the Contract?

The written statement of terms and conditions of employment must contain:

job title and a short description of the main duties and responsibilities of the role

name of the employer and the address of the company

name of the employee and their address

employee’s start date

information about employee’s income - how much they earn, how often they get paid and dates of when and how much they will be paid

any benefits company covers, such as company’s car, insurance

pension and the information about company’s scheme

hours of work

location of work, including any outside the UK. If your employee is working overseas for more than one month, you should discuss all the conditions in the contract

information about holidays, leave entitlement, when it can be taken and what usused leave ca be carried over to the next year, as well as, bank holiday entitlement

details about sick leave

details of the probation period

whether or not the position is permanent, fixed-term or temporary, along with the dates

period of notice- how long beforehand does the employee must tell you about their leaving, and how much notice you are required to give them if you are letting them go

Apart from the above crucial information, in the contract with a new employee you should also include the details of:

any agreements with other staff, called collective agreements, for example how your staff handles tips, travel expenses etc.

how you handle issues of discipline when an employee has a problem or is making a complaint. You need to make sure your employees understand who they inform in case of any issues occurring and what approach they can expect to be taken

absence policy - make sure your employees know when and whom they should report to when they are off ill from work

company procedures, policies and important documents affecting the employment and where they can be found

How to Change a Contract?

Contracts can be only changed when there is a mutual agreement between you and your employees. You need to talk to your employees to reach a compromise on the new agreementl explain the reasons behind the changed and make sure they undertand your new proposal.

If you can’t agree on the change with your employee you have a few options:

imposing the change

termination of the existing contract

compromising

If you need help in forming a contract which will satisfy both you and your employee, contact our team and we will create the best strategy for your company.

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