Contracts of Employment

A Contract of Employment is a mandatory requirement for all employees who work for you. The heart of the Contract is the Statement of Principal Terms and Conditions, but it may also be formed of other documents such as Handbooks and Policies.

The Contract of Employment is a legally binding agreement between you and your employee, which is formed when the employee agrees to work for you, for pay. The Contract is made up of both oral and written agreements and may include:

• Express Terms: which are terms explicitly agreed
• Implied Terms: which may include:
  Terms that are too obvious to mention (e.g. that the employee will not steal from the employer)
  Those necessary to make the contract workable (e.g. that a person employed as a driver must have a current driving licence) although it is often better to write down such terms
  Those that are at the custom and practice of the industry
• Terms incorporated into individual contracts by reference to other documents, such as Company Handbooks, or Collective Agreements with Trade Unions and Employee Forums
• Terms imposed by law (e.g. the right not to be discriminated against on grounds of race or sex)

If you want to make changes to an employee’s contract of employment, you should note the following:

• As a general rule, alterations to the contract can only be made with the agreement of both parties - preferably in writing
• Changes can also be agreed through collective agreements such as those between employers and employees or their representatives, or through a term which provides for a variation in the contract - for example, a clause which requires an employee to carry out a range of duties
• Changes should be agreed wherever possible. If changes are imposed, employees could claim damages in the civil courts (breach of contract) or resign and claim constructive dismissal before an Employment Tribunal

If you are unable to reach an agreement with the affected employees to make a change to their contract, you may be able to impose a change anyway, although this does carry with it a risk and you should always seek professional advice before proceeding.

Contracts can also be changed by amendments or additions to employment legislation. An employee’s statutory rights, as laid down by employment legislation, cannot be withheld or undermined by a lack of reference to them in the contract.

Changes can also come about through custom and practice. This often catches employers unawares as it is only when a problem arises that the organisation realises that a term laid down in their contracts has been superseded by a custom and practice, which has become 'a way of life' in the organisation over a period of time.

It is an implied term in every contract of employment that an employer will not, without reasonable cause, act in a manner that is calculated and likely to undermine the relationship of trust between the parties, or act in a manner that is likely to seriously damage that relationship. This term is fundamental to the employment relationship, which means if the employer breaks it, an employee will be justified in treating themselves as constructively dismissed. Whether the term is actually broken, is ultimately a question for an Employment Tribunal to determine.

We can help you with the following:

• Statements of Principal Terms and Conditions - the heart of the Contract, which can include the following variants:
  
  
  • Permanent: For Full Time and Part Time employees on 'permanent' contracts
    
    
  • Casual: For employees who only work 'as and when required'
    
    
  • Fixed-Term or Temporary: For employees who will work for a fixed duration period, or until a fixed date
    
    
  • Job Sharing: Where 2 or more employees 'share' one job between them
    
    
  • Flexible Contracts: including Annual Hours, Term-Time, and Home Working
    
    
• Related documents - including Employee Handbooks, Policies, Procedures, and Benefits
  
  
• Consent Forms for - Data Protection, Sunday Working, and Working Time Regulations
  
  
• Consultation Processes - how to agree changes to Contracts with your employees

Related Topics

Discipline and Grievance Procedures

Employee Handbooks

Employment Documentation

Employment Law