If you employ someone, you need to have an employment contract. There are no two ways about that. It’s part of UK law, and is the way that the government makes sure businesses treat their employees fairly and legally (and the other way around). But for small businesses, employment contracts can seem like a bit of a minefield – particularly if you don’t have a swanky legal department on staff to help you write it. So how then, do you make sure you have a good employment contract in place, and how do you know what to put in it?
What Is An Employment Contract?
An employment contract is a binding legal contract between an employer and an employee. If you employ someone to work for you, then you need to be able to provide this within 8 weeks of them joining your business., or you might be breaking the law. According to the UK government, there are 4 things you have to include in any employment contract:
• The employment conditions
• Rights of the business and the employee
• Employee responsibilities
• Employee duties
Both employee and employer are bound to stick to this contract until it ends – either by the termination of the employee, or the employee giving their resignation. You can alter an employment contract later down the line, usually when the employee’s role changes, with the agreement of both employer and employee. There is no set formula for an employment contract – other than the fact that it needs to be written out, signed and dated by all parties. Depending on the kind of employment or the type of business, an employment contract could be anything from a few pages to 20+ pages long, and written in anything from complicated legalese to plain and simple English (we prefer this one!).
So Why Do Small Businesses Need Them?
Well, for starters they are a legal requirement! But beyond that, an employment contract means that everyone involved understands what is expected of them, and what their own rights are. This ensures that there are no misunderstandings, and that the employee knows what’s required of them, and what they can expect from you in return.
However, we don’t recommend you use a standard employment contract template. After all, the right employment contract for one company might be unsuitable for a different company – so you need to use one that matches your needs. There are a number of types of employment contract: permanent or fixed term; full time or part time; flexible hours; term-time; casual hours and the high profile zero hours contracts. It is important to choose the right contract for each member of your staff—it may well be that you need several different types of employment contract. You can also choose to include a number of clauses and restrictive covenants in your contract(s) if you wish to. For example, you might want to restrict some of your staff with strong sales relationships from moving to a competitor straight after leaving your company, or from poaching other members of your team. In all, small businesses need contracts to protect themselves, and their employees should anything go wrong. In a lot of cases, an employment contract has saved businesses from some very nasty situations!
What To Include In An Employment Contract?
So, what should your employment contract include? After all, your contracts don’t just serve the business but the employees as well. So, as well as the essential 4 things mentioned above, what else should you think about putting in your employment contracts? Well, we have a few suggestions:
• The term of employment
• Any benefits your business will be providing – like health insurance, life insurance, pensions and so on
• Holiday
• Sick policies
• Reasons for termination
• Non-compete and non-disclosure clauses
• A process for resolving disputes
At AJ HR Solutions, we can provide you with contracts of employment that are specific to your business, and your employment needs. Along with the generic items that have to be legally included, our experts can help you understand anything else you should be including in your contracts. For example, if you run a retail business, then you may need a clause in your contract that explains how you will deal with till shortages. Our experience means we can think of situations you may not have come across yet, and make sure you have a legal document to fall back on if you do. We can also review your existing contracts of employment and update them if they’re a bit out of date. For more information, please just get in touch with us today.
