Employment Knowhow: Contract of employment

All employees must have a written contract of employment, which must contain certain minimum information. However, parties can (and should) carefully consider what other terms they want to include in their employment contracts. Whilst such terms are optional, they provide clarity and structure to the employment relationship.

The minimum provisions that an employer must include are:

  • the names of the employer and employee;
  • the job title or a brief description of the work;
  • the date when the employment began;
  • the date on which the employee’s period of continuous employment began;
  • the rate of remuneration or other method of calculating it;
  • the intervals at which the remuneration is paid;
  • any terms relating to hours of work, including normal working hours;
  • any terms relating to holidays, including public holidays and holiday pay;
  • any terms relating to incapacity for work due to sickness or injury, including any provision for sick pay;
  • any terms relating to pensions and pension schemes;
  • the notice requirements;
  • where the employment is not permanent, the period for which it is expected to continue or, if it is for a fixed period, the date when it is to end;
  • the place (or places) of work;
  • where the employee is required to work outside of the UK for a period of more than a month, the period for which this will be so, the currency they will be paid in and any additional remuneration or benefits, which will apply and any terms and conditions relating to their return to the United Kingdom;
  • whether or not there are any collective agreements;
  • a reference to the disciplinary and grievance rules applicable to the employee, which must include details of the person whom the employee can apply if dissatisfied with any disciplinary decision, and to whom the employee can raise grievances.

Optional but important further provisions that would normally be included in an employment contract are:

  • a probationary period and any shortened notice period applicable during it;
  • a warranty from the employee that when entering into the contract they are not in breach of any obligation owed to a third party;
  • the employee’s consent to monitoring and recording use made of electronic communication systems;
  • the right for the employer to relocate the employee;
  • provisions protecting confidential information;
  • terms restricting outside interests;
  • the right to suspend;
  • the right to make a payment in lieu of notice and/or place the individual on garden leave;
  • terms detailing to whom intellectual property belongs;
  • the obligations which are to apply to the employee upon termination, such as returning confidential information and company property;
  • any restrictions which apply on termination, such as non-solicitation of clients and staff and non-competition (see Restrictive Covenants)

This information is necessarily of a general nature and doesn’t constitute legal advice. This is not a substitute for formal legal advice, given in the context of full information under an engagement with Bates Wells.

All content on this page is correct as of October 24, 2018.