Drafting Employment Contracts in the United Kingdom
3E Accounting’s quick read on drafting employment contracts in the UK covers all the basics you need to get started.
Employment contracts give the relationship between employers and employees of a company a legal nuance. A well-drafted employment contract safeguards all parties, ensuring both employer and employee perform as contractually stipulated. It is a matter of principle that all terms and conditions of an agreement should be in writing. Drafting employment contracts in the UK, while best done by professionals, can still be cobbled together by following a basic framework.
Contractually Binding Parties
Employment contracts do more than just legally bind parties – they also lay out all duties, responsibilities, termination clauses, etc. It is a sound business practice to ensure all employees have a legally binding employment contract. Engaging professional services from companies such as 3E Accounting will ensure that your contracts are properly drafted.
Employment contracts clarify an employee’s specific role and responsibility in a company. It also clearly states what obligations the employer has in return. Poorly drafted employment contracts can create legal lacunae that complicate matters. This can result in either party having no remedy or recourse in the event of a breach of contract.
Generally, all employment contracts will have a standard framework of usual clauses in the agreement. Important clauses include the names of all parties, the start date, job title and scope, and the remuneration. A good contract will clearly state all duties and responsibilities as well as targets and deliverables of the job. The working hours and work location will also be mentioned along with all paid annual leave and sick leave entitlements. The UK also has a Statutory Sick Pay (SSP) entitlement for up to 28 weeks.
The wages that are paid and when it is paid will also be clearly stated. The United Kingdom does have a national minimum wage according to age, and the rate is required to be stated. Other matters that may be mentioned include income tax or Pay As You Earn Scheme deductions and National Insurance contributions.
To provide a ‘settling in period’ for both employer and employee, most employment contracts will have a three- or six-month trial phase. This is known as the Probationary Period, after which the employer may make a permanent offer of employment. The employee is free to accept or reject this offer.
Terms and conditions covering termination of employment, minimum notice period, and disciplinary procedures should be included. This can save a lot of unpleasantness as well as time and money in the event the employment comes to an end. Some companies may also include confidentiality clauses that aim to protect a business’ intellectual property or sensitive information. Some post-termination restrictions may be required of an ex-employee. This can prohibit taking away customers or working for a direct competitor. However, they can only be sanctioned for a reasonably limited timeframe.
To ensure that you have covered all your bases, it would be sensible to get in touch with professional service providers. 3E Accounting can assist in drafting employment contracts in the UK and customising all details according to your needs. Contact 3E Accounting today to speak to one of our global professionals on the best solution for your company.
