Employee Contracts: Advice and Assistance

Understanding Employee Contracts: Your Rights and Protections

All employees should have a contract of employment. Such contracts are a legally binding agreement to protect both the employees and the employer’s interests under the Employment Rights Act 1996.

An employee contract sets out the employment rights of the employee, such as their daily responsibilities and role within the workplace.

Under the terms set out in the employee contract, both the employer and employee are legally bound by the agreement until the contract comes to an end. A contract may end due to an agreed end date (such as if it is a fixed-term contract), resignation or dismissal.

Most employee contracts are written down so that both parties can clearly refer back to the mutually agreed terms. However, it is important to note that a verbal agreement is also legally binding, yet harder to prove if any dispute arises.

What Should Be Included in an Employee Contract?

A crucial document for both employers and employees, an employment contract is a formal agreement that outlines the terms of a working relationship. This includes clearly defined rights, responsibilities, and expectations of both parties. These are called the ‘terms and conditions of employment’ and typically include:

• Express contract terms, such as the agreed date to start work, salary, days of work and working hours, job title and paid leave entitlement.
• Implied contract terms, such as sick pay and the concept of mutual trust and confidence – whereby employers trust employees not to destroy company property and employees trust employers not to treat them unfairly.
• Process of how changes to employment conditions will be handled.
• Notice periods and termination conditions.
• Any restrictive covenants, for example non-compete clauses.

Verbal vs. Written Contracts: What’s the Difference?

Both verbal and written contracts are legally valid in England and Wales. However, proving and disputing the terms of a verbal agreement can be extremely difficult as there is no written proof of what was agreed between the parties.

Written contracts provide clarity on the agreed terms for both employees and employers and can be referred back to if a grievance does arise.

While a verbal agreement may exist for some workers, employers are still legally required to issue a written statement of employment to their employees. This statement must clearly outline the main terms and conditions of their employment.

It is worth noting that employers may alter terms in a written statement after a verbal agreement, which is why an initial written contract provides employees and workers with more security.

The terms and conditions of employment may also be supplemented by an Employee Handbook, which must be referred to in the employee contract, and must also be provided to the employee to consider and be aware of.

The Employee Handbook ultimately allows company policies to be updated as and when needed, or for the introduction of new policies to supplement the original employee contract, without having to update each individual’s employee contract.  Employees must be informed of any changes made to the Employee Handbook, and have ease of access to the most up to date version of the Handbook.

What Is A Written Statement of Employment?

An employment contract outlines the legal agreement between an employer and employee, while a written statement of employment particulars summarises the essential terms of this agreement.

All employees are legally entitled to a written statement on their first day of work. This initial document is known as the ‘principal statement’ and will include the main aspects of the terms of employment, such as salary, hours of work and holiday entitlement.

Employers must then provide what is known as a ‘wider statement’ within two months of the employee’s start date, which can include details on pension schemes and disciplinary and grievance procedures.

If the terms of the employee contract change, then an employer must provide the new information in writing within one month.

Common Employee Contract Disputes

Employment contract disputes can arise for various reasons, often leading to financial loss, job insecurity, or legal claims. Below are some of the most common disputes.

Unfair Changes to Contract Terms

Employers cannot change contract terms without the employee’s agreement. Common disputed changes can include a reduction in salary and changes to working hours.

Breach of Contract by the Employer

A breach of contract occurs when an employer fails to uphold contractual obligations. Examples of breaches include not paying wages on time and wrongful dismissal.

Disputes Over Notice Periods and Dismissal

Employees are entitled to a minimum notice period based on their length of service. If an employer attempts to dismiss an employee without the correct and agreed upon notice period or dismisses them without a valid reason, an employee may have grounds to claim for wrongful dismissal or breach of contract.

Disputes Over Job Roles and Responsibilities

Job descriptions should be clearly defined in the contract, and a breach of contract may occur if an employer tries to assign duties outside the agreed role or increase workload without additional pay.

How AFG Law Can Help with Your Employee Contract Dispute

If either you or your employer fail to uphold the terms of your employment contract, it’s considered a ‘breach.’ This can lead to a grievance.

AFG LAW recommends attempting an informal resolution first. If a formal grievance is necessary, we advise following the ACAS Code of Practice. Non-compliance with the code may impact potential compensation in a tribunal claim. Strict time limits also apply to grievances and tribunal claims.

Our employment team experts can help you draft letters, raise concerns, propose resolutions, and appeal decisions. If mediation or early conciliation is an option, we can guide you through the process before a tribunal hearing.

If you’d like more information on employee contract law or employment contracts, get in touch. Our specialist employment law team can help you with a full range of legal services.

Contact disputeresolution@afglaw.co.uk for further information or call us on 01204 377600.