{"id":1890,"date":"2022-01-18T00:37:28","date_gmt":"2022-01-18T00:37:28","guid":{"rendered":"https:\/\/uk.legalvision.com.au\/?p=1890"},"modified":"2023-02-17T01:24:40","modified_gmt":"2023-02-17T01:24:40","slug":"importance-employment-contracts","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/employment\/importance-employment-contracts\/","title":{"rendered":"Importance of Employment Contracts for Your Business"},"content":{"rendered":"\n<p><span style=\"font-weight: 400\">If you employ staff, you will have employment contracts in place. Employment contracts are an essential business tool, as they enable you to manage your staff legally. It is crucial that you understand the importance of employment contracts. Where problems arise, an employment contract can protect both your interests and the interests of your staff. This is because an employment contract states the terms and conditions you and your employee have agreed to, which can save the potential for legal disputes in the future.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">However, employment contracts should contain specific information and be clear and carefully put together to ensure they are legally effective. This article will demonstrate the importance of employment contracts by providing:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">an explanation of what you need to provide your staff with;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">some tips on what to include in your employment contracts; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">some tips for drafting an employment contract.&nbsp;&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">What is an Employment Contract?<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">An employment contract is a<\/span> legal relationship between you and your employee.\u00a0For example, it states the employees<span style=\"font-weight: 400\">:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">rights;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">responsibilities;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">duties; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">conditions of employment.<\/span><\/li>\n<\/ul>\n\n\n\n<div class=\"box box--icon box--info\">\n<p><span style=\"font-weight: 400\">The type of contract you may require for the person working for you depends on whether the law classes them as an employee or worker.<\/span><\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">What is a Written Statement of Particulars?<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">A <a href=\"https:\/\/legalvision.co.uk\/employment\/written-statement-of-particulars\/\">written statement of particulars<\/a> is not the primary or whole employment contract. Instead, it is a written statement that you must give your employee or worker when they start work. It will state the main terms and conditions of the employment, such as the hours of work and the pay.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">A written statement of particulars consists of:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">a principal statement, which details the name, job description and pay rate; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">a wider statement, which details information such as the pension scheme, for which <\/span><span style=\"font-weight: 400\">you must notify your staff member within one month if any changes to this occur.&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<div class=\"box box--icon box--info\">\n<p><span style=\"font-weight: 400\">All employees and workers have a legal right to a written statement unless they are a worker who began the role before 6 April 2020.&nbsp;<\/span><\/p>\n<\/div>\n\n\n\n<p><span style=\"font-weight: 400\">You must give your employee the principal and broader statement within two months of working for you.&nbsp;<\/span><\/p>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+448081968584\" class=\"not-prose\">0808 196 8584<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div class=\"not-prose flex justify-center text-left gform_input_bg_white    \">\n    <script>\nvar 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Most employment contracts will have written terms that both parties agree to, such as the pay and hours of work. These are called \u2018express terms\u2019.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">However, it may also contain <a href=\"https:\/\/legalvision.co.uk\/employment\/express-implied-terms\/\">\u2018implied terms\u2019<\/a>. These are terms of the employment contract, which may seem obvious. In fact, you may not ordinarily include them in your contract. However, it is good practice to write them into the employment contract to avoid confusion. These could be, for example, what <a href=\"https:\/\/legalvision.co.uk\/employment\/employment-policies\/\">standards of behaviour<\/a> you expect from your staff and the consequences if these are not met.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">Other terms you may choose to include are detailed in the table below.&nbsp;<\/span><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>\n<p><span style=\"font-weight: 400\">\u2018Custom and practice\u2019 terms&nbsp;<\/span><\/p>\n<\/td><td> <p><span style=\"font-weight: 400\">Whilst these do not need to be written in as they are usually standard, you should include them for clarity.&nbsp;<\/span><\/p> <p><span style=\"font-weight: 400\">For example, the amount of a holiday bonus.&nbsp;&nbsp;<\/span><\/p> <\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">\u2018Incorporate Terms\u2019<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">These are those terms that affect most of your employees or workers but will be written in detail in other sources which your employee or workers can refer to.&nbsp;<\/span><\/p>\n<p><span style=\"font-weight: 400\">For example, a staff handbook.<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">\u2018Statutory terms\u2019&nbsp;<\/span><\/p>\n<\/td><td> <p><span style=\"font-weight: 400\">The written employment contract does not contain all terms of employment. There are many areas of employment law that are automatically part of an employment contract but will not necessarily all be detailed in the contract.\u00a0<\/span><\/p> <p><span style=\"font-weight: 400\">However, there may be some parts of employment law that you are required to write into the contract&#8217;s express terms, such as stating the national minimum wage as the pay per hour.<\/span><\/p> <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Important Points to Remember<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">There are many points to consider when writing an employment contract. The table below outlines some important points to remember.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>\n<p><span style=\"font-weight: 400\">The Start Date<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">The start date of an employment contract is the day the person begins to work for you, even if you have not drawn up a written contract. It could start before this where:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">you have already specified the terms of the job elsewhere clearly, whether verbally or in writing;<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">the person either verbally or in writing accepted the job before the start date;&nbsp;<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">you offered the person an unconditional offer of employment; or<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">the conditions for employment have been already met.<\/span><\/li>\n<\/ul>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Legality<\/span><\/p>\n<\/td><td> <p><span style=\"font-weight: 400\">What you include in an employment contract <a href=\"https:\/\/www.gov.uk\/browse\/employing-people\/contracts\">must be legal<\/a>. Therefore, you cannot include a term that is against the law. For example, you cannot include a clause stating the pay per hour is below the national minimum wage.<\/span><\/p> <\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Restrictive Covenants&nbsp;<\/span><\/p>\n<\/td><td> <p><span style=\"font-weight: 400\">You may wish to include further details in an employment contract, such as <a href=\"https:\/\/legalvision.co.uk\/employment\/restraint-of-trade-clause\/\">restrictive covenants<\/a>. These are terms that affect the employee or worker when they leave the job. In effect, it will prevent them from carrying out specific actions, such as contacting your customers for a specific length of time after they have left.<\/span><\/p> <\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Binding<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">Remember, your employment contract terms are binding between you and your employee. However, you may agree to change these. Furthermore, one of you may bring the employee relationship to an end, such as through dismissal or an employee handing in their notice.&nbsp;<\/span><\/p>\n<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Key Takeaways<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">As an employer, your employment contracts are of great importance. A well-drafted employment contract will help your employee understand what is expected of them whilst establishing the terms and conditions of their employment. It is, therefore, essential that you understand what is expected within an employment contract. Importantly, having a clearly drafted employment contract may help to prevent a future legal dispute between you and your employee.<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">If you need help understanding the importance of employment contracts for your business, our <a href=\"https:\/\/legalvision.co.uk\/employment-lawyers-lp\/\">experienced employment lawyers<\/a> can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or visit our <\/span><a href=\"https:\/\/legalvision.co.uk\/membership\"><span style=\"font-weight: 400\">membership page<\/span><\/a><span style=\"font-weight: 400\">.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Frequently Asked Questions<\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1642465833829\"><strong class=\"schema-faq-question\">Why should I have an employment contract with my staff?<\/strong> <p class=\"schema-faq-answer\">It is essential to have an employment contract with your staff as it allows you to set out the terms and conditions of their employment and their rights and responsibilities. Making this clear to your staff should reduce the risk of disputes in the future.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1642465844251\"><strong class=\"schema-faq-question\">What is the difference between express terms and implied terms?<\/strong> <p class=\"schema-faq-answer\">An employment contract will likely consist of both express terms and implied terms. Express terms are specific to the employment contract and need to be written in &#8211; such as the pay and hours of work. Implied terms apply more broadly to most employment contracts, such as elements of employment law.<\/p> <\/div> <\/div>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"9eb4f72322\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/1890\" \/>            <input value=\"https:\/\/legalvision.co.uk\/employment\/importance-employment-contracts\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"Importance of Employment Contracts for Your Business\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>If you employ staff, you will have employment contracts in place. Employment contracts are an essential business tool, as they enable you to manage your staff legally. It is crucial that you understand the importance of employment contracts. Where problems arise, an employment contract can protect both your interests and the interests of your staff.<a href=\"https:\/\/legalvision.co.uk\/employment\/importance-employment-contracts\/\">Continue reading <span class=\"sr-only\">&#8220;Importance of Employment Contracts for Your Business&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13326,"featured_media":590,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"1006,1766,1021,2279,2332,2408","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[35],"tags":[20,21,219,408],"class_list":["post-1890","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employment","tag-small-business","tag-medium-business","tag-employment-law","tag-employment-contracts"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Importance of Employment Contracts for Your Business | LegalVision UK<\/title>\n<meta name=\"description\" content=\"It is crucial that you understand the importance of employment contracts. 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Prior to her freelance writing work, Clare worked for UK central government in policy and communication roles. She has also run her own businesses where she founded a magazine and was editor-in-chief. She is currently studying part-time towards a PhD predominantly in international public law. Qualifications: PhD, Human Rights Law (underway), University of Bedfordshire, Post graduate diploma, Law, Middlesex University.","sameAs":["https:\/\/www.linkedin.com\/in\/ms-clare-susannah-f-4a243545\/"],"url":"https:\/\/legalvision.co.uk\/author\/clarefarmer\/"},{"@type":"Question","@id":"https:\/\/legalvision.co.uk\/employment\/importance-employment-contracts\/#faq-question-1642465833829","name":"Why should I have an employment contract with my staff?","acceptedAnswer":{"@type":"Answer","text":"It is essential to have an employment contract with your staff as it allows you to set out the terms and conditions of their employment and their rights and responsibilities. Making this clear to your staff should reduce the risk of disputes in the future.","inLanguage":"en-GB"},"inLanguage":"en-GB"},{"@type":"Question","@id":"https:\/\/legalvision.co.uk\/employment\/importance-employment-contracts\/#faq-question-1642465844251","name":"What is the difference between express terms and implied terms?","acceptedAnswer":{"@type":"Answer","text":"An employment contract will likely consist of both express terms and implied terms. Express terms are specific to the employment contract and need to be written in - such as the pay and hours of work. Implied terms apply more broadly to most employment contracts, such as elements of employment law.","inLanguage":"en-GB"},"inLanguage":"en-GB"}]}},"_links":{"self":[{"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/posts\/1890","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/users\/13326"}],"replies":[{"embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/comments?post=1890"}],"version-history":[{"count":12,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/posts\/1890\/revisions"}],"predecessor-version":[{"id":179614,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/posts\/1890\/revisions\/179614"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/media\/590"}],"wp:attachment":[{"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/media?parent=1890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/categories?post=1890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/tags?post=1890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}