Contracts of employment - does my business need one for my employees?

With laptops and personal devices, the whole world is at our fingertips now. As a result, more entrepreneurs and businesses are springing up than ever before and with them, a whole wave of exciting developments through all industries and sectors.

However, as these companies innovate and grow, very few of them will ever stay as a sole trader; and are likely to interact with contractors, third-party services and new employees. In some instances, they will hire their own staff, and in many situations involving others will require a contract of employment. A quick google will uncover thousands of templates for such documents (indeed such a search may well have guided you here!), but these are not always adequate for the role intended and so are unfit for purpose. Need to know more? Read on…

Can I hold a trial period before a contract is signed?

Put simply: no. A contract must be issued from day one, with no delay – even if the person you’re working with may not go on to become a permanent fixture in the business. Employment contracts can include clauses for trial or ‘probationary’ periods and should be issued at the start of any such time beginning.

Some clients and employees will request a copy of the employment contract prior to their work beginning, and this isn’t uncommon, particularly in senior or highly paid roles. You may even need to be prepared to negotiate on contract terms, so an HR advisor will need to be sufficiently skilled in legally acceptable amendments.

But I got a copy of one online...

Oh dear, this is never a good thing! Don't copy and paste one from the internet, it may not suit your business and contractually you may be required to pay more than your business can afford to do, additionally, you need to consultation with employees if you wish to change them, so always get advice and know exactly what is in your contracts before issuing them!

What elements are required for a legally compliant employment contract?

Under law, there are elements that an employment contract must include to be valid and effective, these are:

- The names and addresses of both parties (employee and employer)

- A description of the business

- A clearly defined job and role

- Any company specific requirements or protections

- The length or duration of the job alongside a schedule or set working hours

- Pay, compensation and benefits information

- The employee classification category

- Privacy policies

- Any stipulated performance requirements

- Specific tasks and duties

- The terms of the business relationship

- Termination guidelines

- Signatures of both parties with dates

However, in some industries, there will be either exemptions to these rules and/or other legal requirements – so it is imperative that an HR professional is able to review the contract before it is issued.

This all sounds a bit OTT; I only have a small business. What do I need?

Unfortunately, contract types aren’t determined by business size. You still need a thorough employment contract – and indeed safeguarding your business with one may be even more critical if you’re on the smaller side! A contract sets expectations and outlines rules and regulations, so it’s as much in place for you as it is those you’re working with.

That’s not to say that drawing up an employment contract needs to be a lengthy or expensive process; but it does need some input. Contact us on 01327 640070 or email to discuss your business’ requirements. Our contract templates are just £99 including VAT this January so start the year by taking positive steps to protect your business today.

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