Contracts of Employment

July 28, 2020

All employees have an employment contract with their employer. A contract is an agreement that sets out an employee’s:

  • employment conditions
  • rights
  • responsibilities
  • duties

These are called the ‘terms’ of the contract.

Employees and employers must stick to a contract until it ends (for example, by an employer or employee giving notice or an employee being dismissed) or until the terms are changed (usually by agreement between the employee and employer).

If a person has an agreement to do some work for someone (like paint their house), this isn’t an employment contract but a ‘contract to provide services’.

Accepting a contract

As soon as someone accepts a job offer they have a contract with their employer. An employment contract does not have to be written down.

Contract terms

The legal parts of a contract are known as ‘terms’. An employer should make clear which parts of a contract are legally binding.

Contract terms could be:

  • in a written contract, or similar document like a written statement of employment
  • verbally agreed
  • in an employee handbook or on a company notice board
  • in an offer letter from the employer
  • required by law (for example, an employer must pay employees at least the National Minimum Wage)
  • in collective agreements – negotiated agreements between employers and trade unions or staff associations
  • implied terms – automatically part of a contract even if they’re not written down

Implied terms

If there’s nothing clearly agreed between you and your employer about a particular issue, it may be covered by an implied term – for example:

  • employees not stealing from their employer
  • your employer providing a safe and secure working environment
  • a legal requirement like the right to a minimum of 5.6 weeks’ paid holidays
  • something necessary to do the job like a driver having a valid licence
  • something that’s been done regularly in a company over a long time like paying a Christmas bonus

Last updated: 28 July 2020

Source: gov.uk

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