Employment Contract Lawyers
Employment contracts are a crucial part of doing business. A legally binding agreement between employers and employees, to avoid misunderstandings and legal disputes, employment contracts must be drafted properly. So, while off-the-shelf templates seem attractive and cost-effective, this DIY approach to employment law could cost you much more in the long term.
At Summit Law, our specialist employment lawyers help businesses and employees with a wide range of matters relating to employment contracts, including:
- Drafting and reviewing employment contracts
- The inclusion of specific terms and conditions
- Employment contract changes
- Terminating employment contracts
- Employment contract disputes (including unfair dismissal claims)
Do you require employment contract law advice?
With many years’ experience supporting businesses, directors, and senior executives with employment contract matters, we resolve your legal problems efficiently, effectively, and to your satisfaction. When you instruct our employment contract lawyers, you will benefit from:
- Flexible funding – We provide an affordable service with various flexible payment
- Fast service – We seek an early resolution of all employment contract matters.
- Industry expertise – We have helped all types of organisations, from international
companies with thousands of employees to SMEs.
- Reliable advice – With a partner-led approach and a passion for service excellence,
our expert employment contract lawyers ensure you get the best possible advice.
If you need help with your employment contract(s), contact us on 020 4586 4575 or complete the enquiry form on this page.
The different types of employment contracts
Different employment contracts are used to establish the terms and conditions of employment. But ensuring the accuracy of any legal contract is crucial, regardless of its type.
Each employment contract has different requirements. And the employment status and employer responsibilities differ depending on the agreement entered. In the UK, the main types of employment contracts used include:
A permanent employment contract has no set end date. As such, it provides ongoing employment to employees. Permanent employees typically work regular hours, although this can be on a part-time or full-time basis. Both parties can terminate the contract, either by giving notice or dismissal.
As a minimum, employees on permanent contracts enjoy Statutory Sick Pay (SSP), holiday pay, maternity, paternity, adoption pay and leave, and access to pension schemes. They also benefit from the full range of employment rights and any other benefits provided by their employers.
Casual employment contracts – also known as zero-hours contracts – do not guarantee a minimum number of working hours. Instead, employers can call on employees to work if and when needed. Employees can refuse to work when asked, and employers must not do anything to prevent someone on a zero-hours contract from looking for or accepting work from another employer.
Workers on zero-hours contracts are entitled to statutory annual leave, the National Minimum Wage, and statutory employment rights.
Freelancers and other self-employed individuals do not have an employment contract as they work for themselves. Instead, an agreement for services establishes the relationships between them and the organisations they do business with.
Self-employed individuals determine their own working hours and look after their own tax and National Insurance contributions (NIcs). They do not receive employment benefits such as SSP and holiday pay and do not have the same employment rights and responsibilities as employees
With agency contracts, employers hire temporary staff via agencies. Hiring organisations provide wages, NICs, and SSP to agencies to pass to workers and agencies are responsible for ensuring their workers get the rights, pay, and benefits they are eligible for.
After 12 weeks of continuous employment in the same role, agency workers must get the
same terms and conditions as permanent employees.
Key employment contract clauses
The critical clauses included in an employment contract will depend on the needs of the employer and the nature of the job. Nevertheless, most employment clauses have several standard provisions to ensure that the rights and responsibilities of employers and employees are adequately defined.
Some of the most common clauses found in employment contracts include:
- The job title, duties, and responsibilities of the employee
- The renumeration to be paid to the employee (e.g. wage, bonuses, overtime, etc.) as well as other benefits (e.g. holiday entitlement)
- The days and hours the employee is expected to work (and whether there are any flexible/remote working arrangements)
- Any probationary period, if applicable
- The required termination and notice period
- The procedures for resolving any disputes between employers and employees.
In addition, employers should consider some specific clauses to protect their businesses and reduce the risk of employment disputes.
Restrictive covenants are legal constraints prohibiting employees from undertaking certain activities once their employment is over (and during any notice period). Designed to safeguard the commercial interests of businesses, employers typically use restrictive covenants to protect sensitive business information and valuable stakeholder relationships from the threat of departing directors and senior employees.
However, employers cannot impose any restrictions they want, and unless very carefully drafted, restrictive covenants may not be legally binding.
Intellectual property (IP)
If relevant to the job, employers should include a clause to establish the ownership and rights of any IP created by the employee during the course of their employment. When an employee argues that they created the IP outside office hours and using their own resources, employers might be able to challenge this depending on the terms of the employment contract.
Gardening leave clauses are usually used along with restrictive covenants. They determine whether an employer can insist a departing employee works their notice period at home. In many cases, employment will effectively cease – although the employee will be required to be available and cannot start a new job until their notice period ends.
Gardening leave stops departing employees from communicating with – and potentially poaching – customers and other employees. It also stops the likelihood of data theft. Without a gardening leave clause, employers cannot force an employee to take gardening leave and doing so may result in a claim.
Pay in lieu (PILON)
A PILON clause allows employers to terminate an employee’s employment contract immediately. Rather than working their notice period, the employer pays the employee their full notice pay. Like gardening leave, a PILON clause removes departing employees from the workforce to prevent possible damage.
Without a PILON clause (or agreement from the employee), the employer could be in breach of contract if they prevent the employee from working their notice.
Employee duty of confidentiality
Employers often believe that confidentiality is implied, but by including express provisions, there is less likely to be any misunderstanding.
However, it is essential to understand the legal limitations of confidentiality clauses. For example, they cannot be used to prevent whistleblowing or to stop someone from taking a matter to an employment tribunal (unless a settlement agreement has been agreed to).
Employers can legally monitor employees’ verbal and written communications under specific circumstances. Still, transparency is essential to ensure employees know how they are being monitored and protect businesses from legal action. Including a relevant, carefully worded clause in the employment contract can keep employers on the right side of the law.
Employment contract policies
Employers should establish written policies and procedures alongside the employment contract to cover the range of areas that govern the employer-employee relationship. The specific policies and procedures may vary depending on the organisation and industry, but there are some common areas. These might include:
- Equality & diversity
- Behavioural code of conduct
- Health and safety
- Leave and absence
- Grievance and disciplinary procedures
- Performance management and reviews
- IT and social media usage
- Data Protection
- Training and development
- Remote working
Breach of employment contract
A breach of employment contract happens when either party breaks a term of the employment contract. This can take various forms, for example:
Breaches by employees*
- Disclosure of confidential information
- Violation of the non-compete clause
- Unauthorised absence
- Abandonment of employment
- Unauthorised use of company resources
- Data protection infringements
- Violation of the code of conduct
- Failure to comply with contractual obligations.
Breaches by employers*
- Violation of working hours
- Violation of working conditions
- Non-payment of wages (either in full or in part)
- Failure to provide agreed benefits
- Improper termination
- Failure to comply with contractual obligations.
Depending on the type and severity of the employment contract breach, the wronged party may want to raise concerns, make an official complaint/warning, or even pursue legal action.
* Without proper justification or agreement.
Gig economy workers
A growing number of individuals are opting for self-employment. Mostly, those working in the “gig economy” are self-employed – so no employment contract is needed. But employers must be careful as self-employed people may be classed as workers if they are not given enough control over their work and how they choose to do it.
In 2021, The Supreme Court ruled that while Uber considered its drivers to be self-employed contractors, they were, in fact workers. This means they are entitled to statutory holidays, holiday pay, the minimum wage, and other protections. Following this ruling, other gig-economy staff have won the right to be classified as workers.
Businesses looking to engage self-employed contractors must take legal advice to ensure that the contractual documentation honestly reflects the nature of the working relationship and isn’t open to legal challenges.
Employment contract solicitors - FAQ’s
- A contract of employment is a legally binding agreement between an employer and an employee. It covers crucial aspects such as salary, benefits, work location, and working hours, providing comprehensive information to ensure clarity and understanding between the employer and the employee. An employment contract can be agreed verbally or in writing, and it begins when the employee starts work.
- Employment contracts vary depending on industry practices and the specific needs of the employer and employee. Employers should seek legal advice to ensure that their employment contracts comply with the applicable laws. They should also review contracts whenever an employee changes roles within their organisation.
- Employers cannot change an employment contract without the employee’s consent. But, if employees do not agree to changes after negotiation, employers can terminate their contracts. If not done correctly, this may result in an unfair dismissal claim.
- An employee may accept an employment contract in various ways, even by simply starting work. But, when there isn’t a written agreement, this can cause problems.
- Your employer is legally entitled to reduce your working hours. However, they must give you notice before doing so, and provide a legitimate reason for the change. For example:
- Business changes, such as a downturn
- A drop in the need for your role (e.g. due to the introduction of new technology)
- Change of work structure
- Unforeseen situations (e.g. Covid).
- Even with a legitimate reason, employees do not have to accept a change to their contract. And an employer cannot force a change without approval. However, if an employee does not agree to a change, employers might terminate their contract.
- There are some situations where reducing an employee’s pay is possible. For example, where an employee’s salary is linked to an expected performance level that isn’t met. However, details of remuneration conditions should be set out in the employment contract. If an employer changes a contract to reduce an employee’s salary (for example, to make a business viable), they must follow strict rules. These include:
- Consulting with affected employees
- Not discriminating against specific employees
- Having a sound business case for the reduction
- Ensuring pay does not fall below the National Minimum Wage
- Getting agreement from affected employees.
- Additional rules apply if more than 20 employees are affected by the pay cut proposals.
- Some employment contracts include a ‘variation clause’. This gives employers the right to change certain working conditions without further agreement from employees. However, for the most part, these clauses are relied upon to make simple changes and can be problematic when used to make changes to the employee’s detriment.
- Employees and employers can terminate an employment contract by resigning or dismissing an employee.
- When resigning, employees should follow their employer’s resignation process. Their employment contract should have more information about any notice periods required.
- When dismissing employees, employers must use a fair and reasonable procedure and put the reasons in writing.
- If the dismissal is due to redundancy, employers must follow the proper procedures. Failing to do so can lead to unfair dismissal claims or employment tribunals.
- An employment contract should include everything a potential employee needs to know before accepting a job offer, from salary and benefits to location and working hours. Under the Employment Rights Act 1996, all employees have the right to a ‘written statement of employment particulars’. This statement sets out the main terms of employment. But an employment contract includes a range of other clauses, so it is much more than just the written statement.
Contact our employment contract lawyers today
Need help with an employment contract matter? We’ve got you covered. Our specialist employment contract lawyers are here to help no matter how complex the issues.
If you are an employee who has questions about their contract – at the start, during, or end of employment – we can advise on the best steps to take. We also help employers to correctly draft employment contracts, review and update employment contracts, and defend against any related employment contract claims.
We support clients across a range of sectors, including financial services, banking, media, technology, and more. And whatever type of employment contract legal help you need, we have the experience, aptitude, and talent to support you. Get in touch with our employment contract solicitors on 020 7467 3980 or by completing the website enquiry form.