Employment contracts

What is an employment contract?

An employment contract (also known as an employment agreement, contract of employment, or employee contract) sets out the employment conditions and the rights, responsibilities, and duties of the employer and the employee as agreed between them.

What should be included in an employment contract?

Employee and employer relationships are regulated in two ways: through contractual terms and by statutory law.

Employment rights and responsibilities

Statutory law provides the minimum level of employment rights guaranteed to each employee. These include, amongst others, the right to be granted the National Minimum Wage, the right to rest breaks, statutory sick pay, holiday pay, maternity leave, maternity pay, maximum working hours).

If any term of the employment agreement reduces the right granted to the employee by statutory law, that term will not be enforcable by a court or tribunal (e.g. if the employee contract grants a wage lesser than the National Minimum Wage or does not grant statutory sick pay to the employee). However, the employer can grant further rights if the employer desires to do so (such as a greater holiday allowance).Therefore, it is pertinent for employers and employees both to know what a contract of employment can and cannot cover.

Note: the Working Time Regulations provide that the legal maximum number of hours an employee can be required to work is 48 hours per week (including work for any other employers), unless the employee agrees to specifically opt out. If the employee does not opt out, you must take reasonable steps to ensure that the working time stays under the legal limit.

Statement of particulars of employment

To be compliant with the Employment Rights Act 1996, an employer must provide a statement of particulars of employment (also known as a principal statement) to all new hires. This document serves to make the new employee aware of certain important employment terms (such as start date, job title, entitlement to statutory sick pay, entitlement to holidays including public holidays, working hours, notice period for terminating the contract of employment, probationary period, end date if it is a fixed term employment, and pension scheme details).

A contract of employment itself can serve as the principal statement if the contract of employment covers all the points required.

All of our documents include all the necessary information to act as a written statement of employment particulars. You don’t need to provide this information separately in an additional document.

Organisational policies and procedures

Other policies and procedures that are not required to be provided in a written statement of particulars (such as data protection) could be included in the contract of employment. However, especially when you have many employees, changing each employment contract (and ensuring consistency between employees) every time a new law changes can be time consuming and difficult. Therefore, it is usual to place all procedures and policies common to all staff (including such things as general holiday entitlement, notice periods for paid leaves, pension scheme membership and grievance procedures) in an employee handbook and refer to the handbook in the contract of employment.

Our employment contract templates

Each Net Lawman employment contract template covers the terms required to comply with the law and also provisions that many employee contract templates do not contain.

Using one, you'll be able to create your own employment contract for your own business without needing to navigate extensive employment law.

While our employment contract templates provide extensive options and cover a wide range of possibilities, they are available for download in microsoft word format. So you will have no trouble editing the document to fit your needs.

Further terms of employment

We include terms in our employee contract templates that protect your business from, for example: purposeful or accidental intellectual property theft; and that reduce the likelihood of ever being called to tribunals by disgruntled employees.

Our employee contract templates are completely up-to-date with the law. We also follow best practice recommendations by ACAS and other bodies.

Easy to understand and edit

We use plain English and modern language throughout our employee contract templates.

Doing so makes clear your expectations for your employee without reducing the legal effect of the document. It has the additional advantage of making editing easy.

Details such as the employee's job title, employee duties and training provisions can be added in our employee contract templates if required, either within the existing text, or by reference to a job description.

You can amend employment terms in our documents to cater to a change in circumstances, provided the written consent of both parties is available. 

Suitable for all businesses and organisations

Our employee contract templates can be used by any type of organisation (including companies, charities, trusts, partnerships, and governmental organisations) of any size and in any industry.

Suitable for:

• any new employee
• for updating existing employment agreement that does not comply with the latest law
• any level of employee (we provide fuller contracts for senior staff)
• permanent employees (full or part time employee) and temporary employees (such as zero hours workers)

Why is it important to have a written employment contract?

An employment contract, written or verbal is made as soon as the employee accepts a job offer. To minimise future misunderstandings, we recommend providing a written employment contract with the offer letter so that the new employee can return an acceptance letter with a signed copy of the contract of employment.

Different types of employee contracts

There are several different employment types. Each requires a slightly different employment contract.

Permanent employee: A permanent employee can be either part or full-time. A permanent employees’ employment continues for an indefinite duration unless the contract of employment is terminated by either party. If you want to hire a permanent employee, you can use our standard employment contract template 

Fixed term employee: A fixed-term employee is a person whose contract of employment is due to end when a specified event does or does not happen or when a specified task has been completed. For hiring fixed term employees, use our fixed term employment contract template.

Causal employee: Causal employees are hired by employers on an ad hoc basis without any guarantee of continuous employment or a certain number of work hours. If you require a causal worker, use our zero hours employment contract template.

How does apprenticeship differ from employment?

Apprenticeship is differentiated from other types of employment. The contract of employment and operation are subject to the terms of the regulations of the National Apprenticeship Service (NAS). You cannot set up your own training scheme and call it an apprenticeship.

To encourage businesses to take on apprentices, Parliament passed The Apprenticeships, Skills, Children and Learning Act 2009, which included the power to prescribe a model apprenticeship agreement as a contract of service rather than a contract of apprenticeship.

Employment rights of an apprentice

The difference between contracts of employment and contracts of service is important because a contract of service can be terminated on notice, just like any other employment contract, without the apprentice being able to claim compensation for loss of training, for loss of status or for unpaid wages for the rest of the training period.

The actual model - the information that must be included to qualify as an apprenticeship agreement - is set out in The Apprenticeships (Form of Apprenticeship Agreement) Regulations 2012 and came into force on 6 April 2012.

Of course, many employers prefer to avoid the bureaucracy of the formal scheme and simply train their own less experienced employees in the way that best suits them.

When to use an apprenticeship agreement

You can use the apprenticeship scheme to train new and existing employees of any age, although most apprentices are young workers in a first job.

The advantage of taking on an apprentice as against a normal employee in a training scheme is that training costs are typically lower than through other training programmes.

If you are employing apprentices under the formal scheme, use our specific apprenticeship agreement. If you simply train your staff on the job, use our standard employment contract.

Our apprenticeship agreement

Our apprenticeship agreement strongly protects the employer’s confidentiality, information, and intellectual property.

It also provides for fair and full protection of the employer and compliance with other employment law. It includes the required information to qualify as an apprenticeship agreement.