How we can help with Employment Contracts
Our contracts are prepared with your specific needs in mind. We will consult with you to learn about the needs of your business, and tailor employment contracts to best benefit your organisation. We can draft contracts for roles of all levels across your business.
All of our contracts are written in plain English to make them easy to read and understand. This can avoid unnecessary misunderstandings and disputes, saving you time and money in tribunal claims.
We can:
Prepare new employment contracts for your business
Review your existing employment contracts
Support you in a dispute about an employment contract
Why are contracts of employment so important?
Whilst you don't necessarily always need to have written contracts of employment, it can save you considerable time and money if you make use of well written contracts. Once your verbal offer of employment has been accepted, you have a legally binding contract. It's just a bit vague until you write it down. A written contract which clearly sets out the terms and conditions of the employment can save a lot of confusion for you and your employee.
The law does require that you provide your new employee with a written statement of their particulars of employment as soon as they start work, and it is common for this be included in a contract of employment.
The statement must include:
Names of the employer and employee
date the employment began
where the job is located
hours of work
holiday and sick pay entitlement
a job title and description
details of pay and frequency
notice period
any pension provisions
Do I need an Employment Solicitor to prepare my employment contracts?
Like staff handbooks, many firms make contracts too complicated, meaning employees and even managers skim read them or don't understand the full impact. This results in unnecessary dispute, which could be avoided by using clear terms in plain English.
The wording of your contracts is very important and could leave your company open to financial loss if they haven’t been professionally prepared by an Employment Law specialist. Each year we deal with legal challenges to contracts of employment that could have been avoided with professional help.
For example, many contracts contain restrictive covenants to prevent former employees using information or connections they gained at your business to benefit your competitors. However, a court may refuse to uphold restrictive covenants that are poorly drafted, ambiguous or unreasonably restrictive. In the 2018 High Court case Freshasia Foods Ltd v Jing Lu, a company claimed they had lost around £200,000 worth of business when one of their employees left them to work for a competitor. The business tried to enforce a covenant intended to prevent the former employee from poaching customers, but the court found that the covenant was unreasonably restrictive. Only the reasonable elements of the clause could be upheld, but the court had to consider whether the restrictive covenant would make sense with the overly restrictive parts removed (severance). How well the clause was drafted was central to success or failure of the claim.
Employment Status
While we tend to talk about ‘employees’ in general terms, it is important to understand the legal status of your workforce when creating contracts. The status of your workforce determines the employment rights they are entitled to, but also the obligations they have towards you.
Depending on your working arrangement, staff may be:
Employees, who are entitled to employment rights such as the right not to be unfairly dismissed (after two years’ service), holiday pay, sick pay and parental leave.
Workers, who have some employment rights, including holiday, rest breaks and the minimum wage, but overall less protection than employees.
Self-employed, who have only basic employment rights, such as health and safety protections and the right not to be discriminated against.
Employment status also has an impact on tax and National Insurance obligations. You may need to discuss this with a tax specialist.
Which type of contract is best for you will depend upon your business needs. We can help you to understand which type of contract best suits the roles within your business, and the resulting benefits and obligations.
Does it matter?
It is important to get this right so that you don’t deny employees the rights they are entitled to. This would not only be bad for employees, but bad for your business as you would risk costly legal claims and reputational damage.
If a claim is made against you, the tribunal will base their findings on the relationship in practice. It is important to draft your contracts so that the wording reflects the reality of how your business works.
If the tribunal believes that you have denied employees their rights, you could be ordered to pay compensation. A claim by one employee could open you up to similar claims from other employees.
In one case, Pimlico Plumbers could have been ordered to pay £74,000 in holiday backpay had the claim been brought in time. Uber faces pay-outs of up to £12,000 each for more than 2,000 workers wrongly treated as self-employed.
Such an unexpected outlay could put your business into serious financial trouble. It is far better to be realistic about your workforce needs and obligations from the outset, and to factor your legal obligations into your budgeting.
Determining Employment Status
Factors that have been used by the tribunals to help decide the employment status of claimants include:
bargaining power of the parties when entering a contract to do work
the obligation of the individual to do work when required to do so
whether the individual must give personal service or can send a substitute to do the work
whether the individual is in business on their own account
the level of control the employer exerts over the relationship
whether the individual does, or can do, work for someone else
provision of a uniform or equipment to the individual by the entity engaging the individual
whether pay is calculated by the employer or individual
notice required for time off
the description given to the relationship by the parties
the economic reality of the situation
whose responsibility it is to pay and National Insurance contributions
The list above is not exhaustive and no one factor carries more weight than another. Each case will depend on its particular facts and circumstances.
Get in touch
Do you have a legal matter you'd like to discuss with us? Get in touch using the details below or use the form here and a member of our team will be in touch to discuss your enquiry.
Address: Spencer Shaw Solicitors Limited
St Mary's House, 68 Harborne Park Road,
Harborne, Birmingham, B17 0DH
Opening hours:
Monday - Friday 9:00AM - 5:00PM
Saturday, Sunday & Bank Holidays - Closed
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