Employment Contracts: What Employers and Employees Need to Know

As working practices evolve and employment law becomes increasingly regulated, it is more important than ever for employers and employees to understand their rights and obligations and to ensure that employment contracts are up to date and fit for purpose.

Legal Requirements

Under section 1 of the Employment Rights Act 1996, employers must provide employees and workers with a written statement of employment particulars. This must be given on or before the first day of work.

The statement must include key terms, such as:

• The names of the employer and employee or worker
• The start date of employment (and continuous service date, if a previous job counts towards a period of continuous employment)
• Job title or a brief description of duties
• Salary and the intervals at which it is paid
• Working hours, including days and times to be worked and whether hours vary
• Sick leave and sick pay arrangements
• Any other paid leave
• Place of work, including any requirements to work at different locations or from home
• Details of whether the person will work abroad, and any terms that apply
• Notice periods
• How long the job is expected to last if it is temporary or fixed-term
• Details of any probationary period
• Pension arrangements
• Contractual and non-contractual benefits
• Training requirments, whether or not this is paid for by the emloyer

Certain additional particulars, such as information about disciplinary and grievance procedures and details of collective agreements, must be provided within two months of the start date. However, the core information must be issued from day one.

Why does the contract matter?

Legal Consequences

If an employee succeeds in an Employment Tribunal claim relating to another specified issue (such as unfair dismissal, discrimination, or unlawful deductions from wages) and the employer has failed to provide a compliant written statement, the Tribunal must award compensation of an additional two weeks’ pay unless there are exceptional circumstances and may increase this to four weeks' pay. A statutory cap applies to a week’s pay.

Practical Benefits

A well drafted contract can provide important protections for both parties.

For employers, a good contract can:

• Protect confidential information and intellectual property
• Include enforceable post termination restrictions
• Set expectations around flexibility, hybrid working and mobility
• Provide clarity around bonuses, commission or performance related pay
• Maintain the abiliy to make reasonable changes to duties or location

For employees and workers, a strong contract offers:

• Certainty around pay, hours and working conditions
• Clear protections around holidays, sick pay and benefits
• Clear protections around holidays, sick pay and benefits
• An understanding of their obligations during employment and afterwards

By contrast, poorly drafted or outdated contracts can create uncertainty, increase the likelihood of disputes, and undermine an employer’s ability to manage its workforce effectively.

The Importance of a Staff Handbook

Alongside the employment contract, a well maintained staff handbook is a crucial part of the employment framework. While the contract contains legally binding terms, the handbook complements it by providing detailed information about workplace practices.

A staff handbook:

• Sets out clear policies and procedures
• Helps employers comply with legal and regulatory requirements
• Ensures consistent application of rules across the workforce
• Offers employees practical guidance on day-to-day matters
• Reduces the need to aend the emoployment contract regularly, as handbooks can often be updated more easily

Typical policies include:

• Disciplinary and grievance procedures
• Sickness and absence management
• Hybrid working or home-working rules
• Equal opportunities and anti bullying and harassment policies
• Family leave and flexible working processes
• Data protection and IT/Communications rules

Together, the contract and handbook form a comprehensive set of employment documents that support fairness, consistency and compliance.

For employers, investing time in compliant, tailored employment contracts and a robust staff handbook can prevent problems later and significantly reduce the risk of Employment Tribunal claims. For employees, understanding contractual rights and obligations provides confidence and security throughout the working relationship.

If you need help reviewing or drafting employment contracts or handbooks, we can assist. We advise both employers and employees to ensure documents are compliant, clear and fit for purpose.

For further advice and guidance, please contact Alice Kinder.alicekinder@bexleybeaumont.com  |  07526372580