Drawing up a contract of employment. - Free Online Library
Introduction
This checklist details the steps involved in drawing up a contract
of employment. It is primarily aimed at new contracts, but many points
will also be useful to those who have to modify an existing contract. As
with any legal document it is essential that advice is sought before a
contract is put into effect.
Legislation does not require that an organisation has to have a
formal written contract with its employees, but such a contract can
prevent disputes over terms and conditions at a later date, whereas oral
agreements can often be called into question. Well-drafted contracts of
employment enable employees to be clear about their rights, can help to
avoid costs incurred by disputes over terms and conditions, and ensure
that the employer can
justifiably jus·ti·fi·a·ble
adj.
Having sufficient grounds for justification; possible to justify: justifiable resentment.
jus terminate employment if an employee
does not meet the contract's requirements.
National Occupational Standards for Management and Leadership
This checklist has relevance to the following standards:
B: Providing direction, unit 8
D: Working with people, unit 3
Definition
A contract of employment is a legally enforceable agreement, either
oral or written, between an employer and employee that defines terms and
conditions to which both parties have agreed and must adhere. Whilst not
all parts of the contract have to be in writing, the Employment Rights
Act 1996,
amended a·mend
v. a·mend·ed, a·mend·ing, a·mends
v.tr.
1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive.
2. under the Employment Act 2002, requires all employers
(ie regardless of size of organisation) to provide employees, within 2
calendar months of starting work, with a written statement of the main
terms and
conditions of employment conditions of employment
that part of an employment that sets out the duties, responsibilities, hours of work, salary, leave and other privileges to be enjoyed by persons employed, for example a veterinary nurse, in private practice. . Some standard information must be
included in the written statement. Extra clauses can be added.
Action checklist
1.
Analyse an·a·lyse
v. Chiefly British
Variant of analyze.
analyse or US -lyze
Verb
[-lysing, -lysed] or -lyzing, the job to be contracted
Look at the job description if there is one, as this will provide
information on what the employee's job entails. Clauses in the
contract must allow the employee to carry out his or her duties without
restrictions. The post may require the person to have a professional
qualification--would the person be allowed to continue in the role if
the awarding body were to withdraw their professional status?
2. Consider future plans and objectives
Would you expect the size of the workforce to be reduced in the
future? If so, a permanent contract may not be appropriate. A particular
job title may not be suitable if you have to transfer the employee to a
different department; a general title, such as 'Admin Officer'
may offer more scope for change. If you have plans to open further sites
throughout the country, you may need to incorporate a mobility clause to
cater for employees who will have to work there from time to time. By
including clauses such as mobility, the organisation can ensure that its
workforce will adapt to its future needs and developments.
3. Look back at problems
The organisation may have had problems with contracts of employment
in the past. This could have been due to the nature of the work the
organisation does, for example, or an employee could have left taking
some customers with them in the process, or have created some
intellectual property whose ownership is disputed, or have resisted
relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation.
2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. because a contractual statement was lacking.
4. Gather information and
confer with Verb 1. confer with - get or ask advice from; "Consult your local broker"; "They had to consult before arriving at a decision"
consult
ask, enquire, inquire - inquire about; "I asked about their special today"; "He had to ask directions several times" colleagues
Try to obtain some sample contracts of employment used in
organisations in the same field, and get hold of literature
relating to relating to relate prep → concernant
relating to relate prep → bezüglich +gen, mit Bezug auf +acc the current requirements of personnel legislation. Colleagues can offer
good advice over what has and has not worked in the past, both in the
current organisation and in others where they may have worked. Trade
union representatives can point out contentious issues that may arise.
If your organisation has a legal department, consult it. If not, be
prepared to go outside; costs incurred here could well save in the long
term.
5. Incorporate written statement
The Employment Rights Act 1996, S. 6, requires a written statement
of employment containing main terms and conditions to be given to
employees within two months of the start of their employment. This
document is evidence of the employment contract, but the actual contract
exists in the agreement between the employer and employee on the terms
of employment.
The particulars that must be stated in the document are:
* the employer's and employee's names
* the date the employment started (and will end if fixed term)
* the rate of pay and frequency of payment
* terms and conditions relating to hours of work, holidays, holiday
pay,
sickness SICKNESS. By sickness is understood any affection of the body which deprives it temporarily of the power to fulfill its usual functions.
2. Sickness is either such as affects the body generally, or only some parts of it. leave and sick pay, and pensions and pension schemes
* the notice required to be given by both employee and employer to
terminate employment
* any collective agreements which affect the terms and conditions
of employment, for example, those negotiated by a trade union (even if
the employee is not a member)
* the job title
* discipline and
grievance procedure A term used in Labor Law to describe an orderly, established way of dealing with problems between employers and employees.
Through the grievance procedure system, workers' complaints are usually communicated through their union to management for consideration by the employer. , or where these can be found
in documented form
* details of the place(s) of work
* details of collective agreements (eg redundancy agreements) that
affect terms and conditions of employment
* details of overseas work requirements
* the length of time and currency in which
remuneration REMUNERATION. Reward; recompense; salary. Dig. 17, 1, 7. will be
made if the employee is required to work abroad for a period of more
than one month.
In cases where another document can be referred to, such as a
disciplinary procedure disciplinary procedure A sanction, or restriction of the right to practice medicine, imposed on a professional , a staff handbook can be used. This document must
be accessible; a copy should be given to the employee as part of their
induction induction, in electricity and magnetism
induction, in electricity and magnetism, common name for three distinct phenomena.
Electromagnetic induction .
6. Consider possible extra clauses
There are a number of clauses that may be included in a contract of
employment, depending on the nature of the job and the needs of the
organisation.
Relocation expenses--it may be appropriate to include a clause
which requires an employee to repay any relocation expenses incurred if
they leave within a certain period.
Uniform or clothing--where there is a standard dress code or
protective clothing is needed, make this clear in the contract. Check on
sex discrimination legislation over differences between male and female
appearance.
Qualifications--if the
jobholder job·hold·er
n.
One who has a regular job.
Noun 1. jobholder - an employee who holds a regular job
earner, wage earner - someone who earn wages in return for their labor is required to obtain or hold a
certain qualification by a certain date (educational or professional),
define which one and the consequences of failing to have it. Where the
employee is funded to obtain a qualification, they may be required to
repay the cost if they terminate their employment within a certain
period.
Driving licence--employment may be terminated if the employee loses
his or her licence.
Mobility--where the employee is expected to work at different
bases, make it clear.
Travel--in many jobs travel is necessary to meet customers or
clients, so you may need to include a clause to cover this. Clerical
workers are usually only expected to be as mobile as far as is
reasonably possible on a daily commuting basis, whereas managers can be
expected to travel as far as the business requires.
Probation--if a probationary period is used for new employees then
its length should be given, with the ability to terminate the contract
at the end or an earlier date, or to extend the length of the
probation probation, method by which the punishment of a convicted offender is conditionally suspended. The offender must remain in the community and under the supervision of a probation officer, who is usually a court-appointed official. .
Include a statement which says that permanent employment will be
confirmed in writing, subject to the probationary period being completed
satisfactorily.
Retirement--it should be made clear if the contract is terminated
when the employee reaches the organisation's set retirement age.
Restraints--in some
circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact.
2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or it is possible to restrain the
activities of an employee once employment has terminated, through the
use of clauses known as
restrictive covenants Restrictive covenants
Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. . An example would be the
use of trade secrets acquired while working for an organisation. Expert
advice is essential as the employer is required by law to show that the
restraining RESTRAINING. Narrowing down, making less extensive; as, a restraining statute, by which the common law is narrowed down or made less extensive in its operation. clauses are not more than is needed to protect their
interests.
7. Produce a draft
Have the contract of employment checked over,
preferably pref·er·a·ble
adj.
More desirable or worthy than another; preferred: Coffee is preferable to tea, I think.
pref by someone
with legal expertise. Ensure that all terms are clear and unambiguous,
and do not restrict the employee from carrying out or further developing
the role.
8. Review the contract
The employee should be made aware that signing the contract is
tantamount tan·ta·mount
adj.
Equivalent in effect or value: a request tantamount to a demand.
[From obsolete tantamount, an equivalent, from Anglo-Norman to a legally binding contract and therefore subject to the
law of the land.
At a later date, ask the employee if there is something that they
think needs changing, although the employer is not
obliged o·blige
v. o·bliged, o·blig·ing, o·blig·es
v.tr.
1. To constrain by physical, legal, social, or moral means.
2. to make
suggested changes. Sometimes a term that permits an employer to vary a
contract is included, but the right to vary without an employee's
consent is quite limited. Problems that occur elsewhere in the
organisation may affect contracts wholesale, so be aware. Keep an eye on
the personnel literature for court cases and changes in legislation
which may affect current or future contracts.
How not to draw up a contract of employment
Don't:
* leave yourself with no time to examine the job and the future of
the role
* begin writing without looking at the law relating to contracts of
employment
* use difficult or ambiguous wording in the contract
* forget to draw on the experiences of your colleagues
* cut corners--pay for legal advice if it is not available
internally
* try to restrain the employee too much--allow for some flexibility
in the contract.
Additional resources
Books
Contracts of employment: a legal guide London: Labour Research
Department, 2005
Producing a written statement London:
ACAS ACAS Cardiology A clinical trial–Asymptomatic Carotid Atherosclerosis Study which evaluated the 5-yr risk of fatal and non-fatal stroke-primary outcome in Pts with asymptomatic but severe carotid atherosclerosis. See Carotid stenosis. , 2004
Safe employment contracts Ashford: Indicator, 2004
Contracts of employment: legal essentials, 3rd ed, London:
Chartered Institute of Personnel and Development The Chartered Institute of Personnel and Development (CIPD) is the leading professional body for those involved in the field of personnel, training and development. Membership of the CIPD is highly respected and widely accepted by employers as a requirement of practice. , 2004
This is a selection of books available for loan to members from the
Management Information Centre. More information at:
www.managers.org.uk/mic
Organisations
Advisory,
Conciliation conciliation: see mediation. and Arbitration Service (ACAS)
Brandon House, 180
Borough High Street Borough High Street is the last section of the road from Dover to London as it approaches London Bridge. It is also the northern section of the A3 road from London to Portsmouth.
It divides historic Southwark in two. , London, SE1 1LW
Tel: 020 7210 3613 www.acas.org.uk
Introduction
This checklist details the steps involved in drawing up a contract
of employment. It is primarily aimed at new contracts, but many points
will also be useful to those who have to modify an existing contract. As
with any legal document it is essential that advice is sought before a
contract is put into effect.
Legislation does not require that an organisation has to have a
formal written contract with its employees, but such a contract can
prevent disputes over terms and conditions at a later date, whereas oral
agreements can often be called into question. Well-drafted contracts of
employment enable employees to be clear about their rights, can help to
avoid costs incurred by disputes over terms and conditions, and ensure
that the employer can
justifiably jus·ti·fi·a·ble
adj.
Having sufficient grounds for justification; possible to justify: justifiable resentment.
jus terminate employment if an employee
does not meet the contract's requirements.
National Occupational Standards for Management and Leadership
This checklist has relevance to the following standards:
B: Providing direction, unit 8
D: Working with people, unit 3
Definition
A contract of employment is a legally enforceable agreement, either
oral or written, between an employer and employee that defines terms and
conditions to which both parties have agreed and must adhere. Whilst not
all parts of the contract have to be in writing, the Employment Rights
Act 1996,
amended a·mend
v. a·mend·ed, a·mend·ing, a·mends
v.tr.
1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive.
2. under the Employment Act 2002, requires all employers
(ie regardless of size of organisation) to provide employees, within 2
calendar months of starting work, with a written statement of the main
terms and
conditions of employment conditions of employment
that part of an employment that sets out the duties, responsibilities, hours of work, salary, leave and other privileges to be enjoyed by persons employed, for example a veterinary nurse, in private practice. . Some standard information must be
included in the written statement. Extra clauses can be added.
Action checklist
1.
Analyse an·a·lyse
v. Chiefly British
Variant of analyze.
analyse or US -lyze
Verb
[-lysing, -lysed] or -lyzing, the job to be contracted
Look at the job description if there is one, as this will provide
information on what the employee's job entails. Clauses in the
contract must allow the employee to carry out his or her duties without
restrictions. The post may require the person to have a professional
qualification--would the person be allowed to continue in the role if
the awarding body were to withdraw their professional status?
2. Consider future plans and objectives
Would you expect the size of the workforce to be reduced in the
future? If so, a permanent contract may not be appropriate. A particular
job title may not be suitable if you have to transfer the employee to a
different department; a general title, such as 'Admin Officer'
may offer more scope for change. If you have plans to open further sites
throughout the country, you may need to incorporate a mobility clause to
cater for employees who will have to work there from time to time. By
including clauses such as mobility, the organisation can ensure that its
workforce will adapt to its future needs and developments.
3. Look back at problems
The organisation may have had problems with contracts of employment
in the past. This could have been due to the nature of the work the
organisation does, for example, or an employee could have left taking
some customers with them in the process, or have created some
intellectual property whose ownership is disputed, or have resisted
relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation.
2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. because a contractual statement was lacking.
4. Gather information and
confer with Verb 1. confer with - get or ask advice from; "Consult your local broker"; "They had to consult before arriving at a decision"
consult
ask, enquire, inquire - inquire about; "I asked about their special today"; "He had to ask directions several times" colleagues
Try to obtain some sample contracts of employment used in
organisations in the same field, and get hold of literature
relating to relating to relate prep → concernant
relating to relate prep → bezüglich +gen, mit Bezug auf +acc the current requirements of personnel legislation. Colleagues can offer
good advice over what has and has not worked in the past, both in the
current organisation and in others where they may have worked. Trade
union representatives can point out contentious issues that may arise.
If your organisation has a legal department, consult it. If not, be
prepared to go outside; costs incurred here could well save in the long
term.
5. Incorporate written statement
The Employment Rights Act 1996, S. 6, requires a written statement
of employment containing main terms and conditions to be given to
employees within two months of the start of their employment. This
document is evidence of the employment contract, but the actual contract
exists in the agreement between the employer and employee on the terms
of employment.
The particulars that must be stated in the document are:
* the employer's and employee's names
* the date the employment started (and will end if fixed term)
* the rate of pay and frequency of payment
* terms and conditions relating to hours of work, holidays, holiday
pay,
sickness SICKNESS. By sickness is understood any affection of the body which deprives it temporarily of the power to fulfill its usual functions.
2. Sickness is either such as affects the body generally, or only some parts of it. leave and sick pay, and pensions and pension schemes
* the notice required to be given by both employee and employer to
terminate employment
* any collective agreements which affect the terms and conditions
of employment, for example, those negotiated by a trade union (even if
the employee is not a member)
* the job title
* discipline and
grievance procedure A term used in Labor Law to describe an orderly, established way of dealing with problems between employers and employees.
Through the grievance procedure system, workers' complaints are usually communicated through their union to management for consideration by the employer. , or where these can be found
in documented form
* details of the place(s) of work
* details of collective agreements (eg redundancy agreements) that
affect terms and conditions of employment
* details of overseas work requirements
* the length of time and currency in which
remuneration REMUNERATION. Reward; recompense; salary. Dig. 17, 1, 7. will be
made if the employee is required to work abroad for a period of more
than one month.
In cases where another document can be referred to, such as a
disciplinary procedure disciplinary procedure A sanction, or restriction of the right to practice medicine, imposed on a professional , a staff handbook can be used. This document must
be accessible; a copy should be given to the employee as part of their
induction induction, in electricity and magnetism
induction, in electricity and magnetism, common name for three distinct phenomena.
Electromagnetic induction .
6. Consider possible extra clauses
There are a number of clauses that may be included in a contract of
employment, depending on the nature of the job and the needs of the
organisation.
Relocation expenses--it may be appropriate to include a clause
which requires an employee to repay any relocation expenses incurred if
they leave within a certain period.
Uniform or clothing--where there is a standard dress code or
protective clothing is needed, make this clear in the contract. Check on
sex discrimination legislation over differences between male and female
appearance.
Qualifications--if the
jobholder job·hold·er
n.
One who has a regular job.
Noun 1. jobholder - an employee who holds a regular job
earner, wage earner - someone who earn wages in return for their labor is required to obtain or hold a
certain qualification by a certain date (educational or professional),
define which one and the consequences of failing to have it. Where the
employee is funded to obtain a qualification, they may be required to
repay the cost if they terminate their employment within a certain
period.
Driving licence--employment may be terminated if the employee loses
his or her licence.
Mobility--where the employee is expected to work at different
bases, make it clear.
Travel--in many jobs travel is necessary to meet customers or
clients, so you may need to include a clause to cover this. Clerical
workers are usually only expected to be as mobile as far as is
reasonably possible on a daily commuting basis, whereas managers can be
expected to travel as far as the business requires.
Probation--if a probationary period is used for new employees then
its length should be given, with the ability to terminate the contract
at the end or an earlier date, or to extend the length of the
probation probation, method by which the punishment of a convicted offender is conditionally suspended. The offender must remain in the community and under the supervision of a probation officer, who is usually a court-appointed official. .
Include a statement which says that permanent employment will be
confirmed in writing, subject to the probationary period being completed
satisfactorily.
Retirement--it should be made clear if the contract is terminated
when the employee reaches the organisation's set retirement age.
Restraints--in some
circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact.
2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or it is possible to restrain the
activities of an employee once employment has terminated, through the
use of clauses known as
restrictive covenants Restrictive covenants
Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. . An example would be the
use of trade secrets acquired while working for an organisation. Expert
advice is essential as the employer is required by law to show that the
restraining RESTRAINING. Narrowing down, making less extensive; as, a restraining statute, by which the common law is narrowed down or made less extensive in its operation. clauses are not more than is needed to protect their
interests.
7. Produce a draft
Have the contract of employment checked over,
preferably pref·er·a·ble
adj.
More desirable or worthy than another; preferred: Coffee is preferable to tea, I think.
pref by someone
with legal expertise. Ensure that all terms are clear and unambiguous,
and do not restrict the employee from carrying out or further developing
the role.
8. Review the contract
The employee should be made aware that signing the contract is
tantamount tan·ta·mount
adj.
Equivalent in effect or value: a request tantamount to a demand.
[From obsolete tantamount, an equivalent, from Anglo-Norman to a legally binding contract and therefore subject to the
law of the land.
At a later date, ask the employee if there is something that they
think needs changing, although the employer is not
obliged o·blige
v. o·bliged, o·blig·ing, o·blig·es
v.tr.
1. To constrain by physical, legal, social, or moral means.
2. to make
suggested changes. Sometimes a term that permits an employer to vary a
contract is included, but the right to vary without an employee's
consent is quite limited. Problems that occur elsewhere in the
organisation may affect contracts wholesale, so be aware. Keep an eye on
the personnel literature for court cases and changes in legislation
which may affect current or future contracts.
How not to draw up a contract of employment
Don't:
* leave yourself with no time to examine the job and the future of
the role
* begin writing without looking at the law relating to contracts of
employment
* use difficult or ambiguous wording in the contract
* forget to draw on the experiences of your colleagues
* cut corners--pay for legal advice if it is not available
internally
* try to restrain the employee too much--allow for some flexibility
in the contract.
Additional resources
Books
Contracts of employment: a legal guide London: Labour Research
Department, 2005
Producing a written statement London:
ACAS ACAS Cardiology A clinical trial–Asymptomatic Carotid Atherosclerosis Study which evaluated the 5-yr risk of fatal and non-fatal stroke-primary outcome in Pts with asymptomatic but severe carotid atherosclerosis. See Carotid stenosis. , 2004
Safe employment contracts Ashford: Indicator, 2004
Contracts of employment: legal essentials, 3rd ed, London:
Chartered Institute of Personnel and Development The Chartered Institute of Personnel and Development (CIPD) is the leading professional body for those involved in the field of personnel, training and development. Membership of the CIPD is highly respected and widely accepted by employers as a requirement of practice. , 2004
This is a selection of books available for loan to members from the
Management Information Centre. More information at:
www.managers.org.uk/mic
Organisations
Advisory,
Conciliation conciliation: see mediation. and Arbitration Service (ACAS)
Brandon House, 180
Borough High Street Borough High Street is the last section of the road from Dover to London as it approaches London Bridge. It is also the northern section of the A3 road from London to Portsmouth.
It divides historic Southwark in two. , London, SE1 1LW
Tel: 020 7210 3613 www.acas.org.uk