In the UK, the term “employment contract” covers the agreement between employer and employee about the terms of their work. This contract can be partly oral and partly written – indeed, a verbal job offer that is accepted forms a basic contract. However, UK law requires that employees (and workers) receive a written statement of their main terms and conditions on or before their first day of work. This is often referred to as the “written statement of employment particulars” and is essentially the core of a written employment contract.
Here are the must-have elements that should be included:
- Names of the Parties: The legal name of the employer (e.g., ABC Ltd.) and the name of the employee.
- Job Title or Job Description: What role the employee will perform or a brief description of duties. This sets expectations of their responsibilities.
- Start Date and (if applicable) Continuous Service Date: The date the employment begins (and if any previous employment counts towards their continuous service for statutory rights, that earlier date). If it’s a fixed-term contract, the end date or duration of the contract should also be stated.
- Place of Work: Where the employee will be working. If they are expected to work in various locations or remotely, note that too. For instance, “Your normal place of work is our High Wycombe office, but you may be required to travel to client sites throughout the UK.” If remote/hybrid, mention any office days or if they can work from anywhere. Also, include if the job involves working abroad for over a month, in which case additional details must be given (like currency of pay, any extra benefits for working abroad, etc.).
- Hours of Work: The working days and hours, and whether those hours are fixed or variable. For example, “40 hours per week, Monday–Friday 9am–5:30pm with a 1-hour lunch break” or if shift work or variable, explain how it varies or that the employee may be required to work weekends/overtime. If there’s any guaranteed overtime or how overtime is handled (paid or time off in lieu), include that. Recent law also requires stating if work schedule is variable, how it varies and what the reference hours/days are.
- Pay: The salary or wage and the payment frequency (e.g., £25,000 per annum paid monthly; or £15 per hour paid weekly). Also, the method of payment (such as BACS transfer) and perhaps the usual pay date (e.g., last working day of the month). If there are any bonuses or commission structures, you might refer to them or include details (or in a separate bonus scheme document referenced by the contract).
- Holiday Entitlement: The amount of paid annual leave the employee gets, and whether that includes the UK bank holidays or not. For example, “28 days’ paid holiday per year (inclusive of the 8 public/bank holidays in England and Wales).” If it’s part-time, how it’s calculated. Also mention any rules like carry-over of unused holiday or if holiday scheduling is subject to approval.
- Sick Pay and Procedure: You must inform about any sick pay entitlement beyond Statutory Sick Pay and the requirements for notifying sickness. Many contracts outline that SSP will be paid and any company sick pay scheme if provided (some small employers might just do SSP). Also mention the process: e.g., “If you are unable to work due to illness, you must notify [manager] by 9am on the first day of absence and provide a self-certification or doctor’s note as required.”
- Other Paid Leave: Information on other types of paid leave like maternity, paternity, adoption leave, etc., or usually a reference that these will be provided in line with statutory requirements. Often the contract itself might not spell out all those details but might say “Details of our family leave policies are available in the Staff Handbook, and these form part of your terms.” Still, at least a mention that such policies exist is needed.
- Pension: The contract should state what pension arrangements are in place. Since most employees must be auto-enrolled in a workplace pension scheme, it might say “You will be auto-enrolled into the company’s pension scheme with XYZ provider; the current contribution is X% from the employer and Y% from the employee.” Or if the employee opts out, etc., still the availability must be stated.
- Notice Period: Both the notice the employee must give to resign and the notice the employer will give to terminate (after any probation – see next). For example, “During the first 3 months (probation) either party may terminate with 1 week’s notice. After confirmation in post, you must give 1 month’s notice to resign. The company will give you statutory minimum notice or 1 month, whichever is greater, to terminate your employment.” Statutory minimum notice for employers to give is one week per year of service after the first month, up to 12 weeks. Many contracts provide more generous notice for senior roles. It’s important to comply with at least the statutory minimum. If you don’t explicitly state notice, the law implies the statutory minimum, but it’s better to be clear contractually.
- Probationary Period (if any): Many contracts include a probation period at the start (commonly 3 or 6 months) during which performance is evaluated and often notice periods are shorter. If you have this, state its length and any special terms (e.g., “During probation, either party can terminate with 1 week notice; this probation may be extended once by up to 3 months if needed” etc.). If there are differences in benefits during probation (some companies delay certain benefits until after probation), mention those too.
- Disciplinary and Grievance Procedures: You should inform the employee where they can find information about the company’s disciplinary rules and the process to raise grievances. Often contracts reference the Staff Handbook or attach the discipline/grievance procedure. It’s a legal requirement to provide at least a note of these procedures (or state there are none, though practically you should have them). Many contracts say “Your employment is subject to the Company’s disciplinary and grievance procedures, copies of which are provided to you and are available in the Staff Handbook. These procedures do not form part of your contract (we reserve the right to amend them).” Often employers keep them non-contractual so they can tweak them without requiring consent.
- Collective Agreements: If any collective agreements (with a trade union) affect the terms, you must say so. If none, it’s common to state “No collective agreements affect your employment”.
- Working Time and Overtime: If the role might require more than the standard hours, mention how overtime is handled or if the employee might opt out of the 48-hour work week limit (if they agree). If the job is one where the Working Time Regulations 48-hour limit might be exceeded, you might include an opt-out clause (and have them sign a separate opt-out form). This is often done for senior managers or any role requiring frequent long hours.
- Other Key Policies: While not all need to be in the contract text, it’s wise to reference your key workplace policies (e.g., anti-harassment, data protection, IT use policy, health and safety policy). Many employment contracts incorporate the Staff Handbook by reference, noting that it contains policies that employees must follow (though often stating the handbook policies are not contractual except where required by law).
- Company Property and Intellectual Property: Common contractual clauses include requiring the employee to take care of company equipment and return it on termination, and if the employee might create intellectual property (designs, code, inventions) as part of their job, a clause to ensure the company owns any IP they create in the course of employment. (By UK default, IP created by an employee in the course of employment does belong to the employer, but it’s good to spell it out to avoid doubt, especially for anything that might fall in a gray area or be created off-hours using company resources).
- Confidentiality: A clause binding the employee to keep company secrets and confidential information private, both during and after employment. This is important to protect things like client lists, trade secrets, etc. It should specify they must not use or disclose such information except for the company’s business. This obligation generally can survive indefinitely even after they leave (trade secrets, for example, are protected by law as well).
- Restrictive Covenants (if applicable): For certain roles, especially senior or client-facing ones, you might include post-termination restrictions: non-competition (don’t join a competitor for X months after leaving), non-solicitation of clients or staff, non-dealing with clients, etc. These must be reasonable in scope (duration, geography, and limited to protecting legitimate business interests) to be enforceable. Not every employment contract has these – typically they’re for higher-level positions. If you include them, they become part of the contract the employee signs on joining, which is the best time to get such obligations agreed.
Given the legal requirement, yes, you do need to provide the main terms in writing. Practically, it’s best to have a full written employment contract issued and signed before or on the first day of employment. The law requires key particulars on day one, so don’t delay this. If you fail to provide it, an employee could take action (though typically the enforcement is that if they bring another claim, they might get additional compensation for not receiving a written statement). It’s also just good business practice – a new hire will feel more comfortable knowing exactly what the deal is.
You can draft an employment contract yourself, but given the numerous required elements and the importance of getting it right, many small businesses have bespoke contracts of employment drawn up. British Contracts offers provide custom employment contracts for highly competitve fixed fees under our Gold and Platinum packages and we can review and advise on your existing contracts under our Bronze and Silver packages. With a solid written contract in hand, you set the employment relationship off on a clear, legally compliant footing, which is beneficial for both you and your employee.