You are legally required to provide every employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. with a written statement of the basic terms of their employment (eg pay, hours, holidays) on or before your new employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s first day of work. These written terms do not have to be in the form of an employment contract, although in practice one is often used to provide all the required information.

If you fail to do this, your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. can apply to the Employment TribunalA tribunal that deals solely with employment disputes. for a finding of what their basic terms of employment are and compensation, which can be time consuming and expensive to deal with. See Q&A 3 for a list of the basic information you must provide.

You must give your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. a written statement of certain terms of employment on or before their first day of work with you.

The law only requires basic information to be given. It does not require all the terms and conditions between you and your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. to be written down (although in reality, this is best practice).

The following are the minimum particulars of employment that you must give in writing to your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.:

1. the names of the employerA person or business hiring one or more staff members. and employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.;

2. the date the employment starts and the date the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s period of continuous employmentHow long a person has been employed without a break lasting at least a week. Time off work whilst still employed (eg annual leave, sick leave etc) does not count as a break. begins (this is relevant because some employment rights do not accrue until after a period of continuous employmentHow long a person has been employed without a break lasting at least a week. Time off work whilst still employed (eg annual leave, sick leave etc) does not count as a break. ; eg the right to a minimum notice period(1) The length of time in advance which a notice must be given before it can take effect (2) The requirement to inform employees that they are being dismissed a certain amount of time in advance of their last day of employment. );

3. how much the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. will be paid, or how their pay will be calculated, how regularly they will be paid (eg weekly or monthly);

4. hours of work, including what their normal working hours will be;

5. holiday entitlement and holiday payPayment made by an employer to a worker during the worker's holiday time off work. (including their bank and public holiday entitlement);

6. the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s job title or a brief description of the work;

7. place of work (if the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is required or permitted to work at various places, this must to be stated along with the employerA person or business hiring one or more staff members.'s address);

8. terms about absence due to incapacity and sick payPayment made by an employer to a staff member during the staff member's time off work due to illness or disability. (you can refer the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. to other documents for these details if it is easier eg your staff handbookA staff handbook is a manual provided to employees by an employer which usually contains information about company policies and procedures. or absence policy document);

9. the notice period(1) The length of time in advance which a notice must be given before it can take effect (2) The requirement to inform employees that they are being dismissed a certain amount of time in advance of their last day of employment. that the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. must give to end their employment and the notice that you must give them if you want to do so (you can simply say that your notice periods are those required by law if you are happy to adopt the legal minimums);

10. terms as to pensions and pension schemes (you can refer the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. to other documents for these details if it is easier and this information can be provided within two months of your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s start date rather than immediately);

11. terms relating to whether the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. may be required to work outside the UKUnited Kingdom of Great Britain and Northern Ireland for a period of more than one month, including how long it will be for, and additional benefits they will receive in compensation for working abroad, the currency in which they will be paid and any terms dealing with their return to the UKUnited Kingdom of Great Britain and Northern Ireland;

12. if the contract is temporary, how long it is expected to last and when it will end;

13. information about disciplinary and grievanceA concern, problem or complaint which a member of staff raises with his employer. procedures or where these can be found, saying who they can appeal to if they want to appeal a disciplinary decision and who they can raise a grievanceA concern, problem or complaint which a member of staff raises with his employer. with (typically contained in a staff handbookA staff handbook is a manual provided to employees by an employer which usually contains information about company policies and procedures.: see Staff handbook and policies for a template policy, which you can choose to generate either on its own or as part of a full staff handbookA staff handbook is a manual provided to employees by an employer which usually contains information about company policies and procedures.). This information can be provided within two months of your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s start date rather than immediately;

14. details of any collective agreements Agreements that are negotiated with a trade union or other employee representative that affects the terms of the employees' contracts. with trade unions directly affecting the employment eg an agreement reached by trade union representatives for a pay increase (you can refer the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. to other documents for these details if it is easier and this information can be provided within two months of your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s start date, rather than immediately);

15. further details about normal working hours, including the days of the week and whether these hours or days vary (and if so, how);

16. details about any other paid leave the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is entitled to (besides sickness and holiday payPayment made by an employer to a worker during the worker's holiday time off work.) eg maternity or paternity leaveA period of leave from work available to certain staff members in order to care for a new born child or support the child's mother. (you can refer the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. to other documents for these details if it is easier eg your staff handbookA staff handbook is a manual provided to employees by an employer which usually contains information about company policies and procedures.);

17. details of any other benefits not specifically mentioned in the list above;

18. information about probationary periodsThe period of time during the beginning of an employment relationship where new hires can be usually dismissed with less notice., including any conditions attached to it and how long it lasts; and

19. details of any training entitlement, including whether it is mandatory and whether you will pay for it. Note that you are permitted to provide details about any non-mandatory training in a separate document if this is easier and that information can be provided within two months of your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s start date, rather than immediately.

Note that the rules about the information to be included in employment contracts changed on 6 April 2020; see Q&A 4 for guidance about what to do if an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. who started working for you before 6 April 2020 requests a written statement containing the information set out above.

Whilst most of this information must be provided to new employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in a single written document, some of the information (only where indicated above) can be provided in a separate document (eg a staff handbookA staff handbook is a manual provided to employees by an employer which usually contains information about company policies and procedures.) if this is more practical for you.

Be careful when providing certain information (eg about the benefits available to your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer.) that you do not inadvertently make non-contractual or discretionary benefits a contractual entitlement. Our template employment contracts contain appropriate wording to protect your business from this eventuality.

Note that, if you do not have any terms to set out on any of these subjects (apart from in relation to your disciplinary and grievanceA concern, problem or complaint which a member of staff raises with his employer. procedures), you must state that there are none rather than omitting any mention.

The rules about the information to be included in employment contracts changed on 6 April 2020; see Q&A 3 for a full list of the information that must now be included. If any employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. who started working for you before 6 April 2020 request a written statement containing the new information set out in Q&A 3 above, you must provide them with a copy within one month of their request.

You are legally required to provide every employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. with a written statement of the basic terms of their employment (eg pay, hours, holidays) on or before their first day of work, regardless of the length of time they will be working for you.

See Q&A 3 for information about what the written statement must contain.

It must include the information set out in Q&A 3; aside from this, it's up to you, although there are certain provisions that it's wise to include.

You can use Employment contract as a template. If your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is an apprenticeA person who is taken on to learn a trade or skill. A modern arrangement involves an apprentice, an employer and a training provider such as a college., see Q&A 13.

Note the following:

1. This template includes all of the information that you are legally required to provide to new employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in writing and various extra provisions to help the smooth running of your business. There are some terms your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s contract must include or which will automatically be included by law, even if you try to exclude them, eg terms relating to minimum wage, minimum notice periods for dismissal and your obligations to provide a safe place and system of work. For example, even if your contract stipulates an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is to be paid less than the national minimum wageThe minimum hourly wage that employers must pay their staff. Staff who are aged 21 and over must be paid the National living wage. or the national living wageThe minimum hourly wage that employers must pay their staff who are aged 21 and over. Staff who are aged under 23 must be paid the National minimum wage., they will nevertheless be entitled to receive the minimum wage for their work. If you do not pay them enough, they can bring a claim against you for the balance.

2. This template is designed to work with the template Staff handbook and policies. Some matters are addressed in the handbook rather than the contract. These include your disciplinary and grievanceA concern, problem or complaint which a member of staff raises with his employer. procedures. This is because it is more difficult to change such procedures if they are included in your contracts and the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. could theoretically sue you if you do not follow exactly what the procedures say.

3. You must ensure your contract does not discriminate To treat someone differently directly or indirectly becasue of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation.against those with protected characteristicsAge, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex or sexual orientation. ; see Q&A 10.

4. If your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. will be part-time bear in mind that part-time staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. must be treated equally to full-time staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer.; see Q&A 12 for more information.

5. The more junior the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work., the less likely you are to be able to enforce any provision in their contract to stop them competing with your business in some way after they leave eg by working for a competitor or poaching clients or staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer.. For this reason it is not recommended that your junior staff contractsThe agreements under which staff members work, which may be contracts of employment, contracts with an agency or agencies which they are supplied by, or contracts to provide services to the employer. have lots of restrictions like this in them. If the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. you are hiring is going to be very integrated into the business and you are worried about, for example, them taking confidential information or clients to a competitor if they leave, see Q&A 7 for a contract that contains protections.

It must include the information set out in Q&A 3; aside from this, it's up to you, although there are certain provisions that it's wise to include.

You can use Employment contract as a template.

Note the following:

1. This template includes all of the information that you are legally required to provide to new employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in writing and various extra provisions to help the smooth running of your business. There are some terms your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s contract must include or which will automatically be included by law, even if you try to exclude them, eg terms relating to minimum notice periods for dismissal and your obligations to provide a safe place and system of work.

2. This template is designed to work with the template Staff handbook and policies. Some matters are addressed in the handbook rather than the contract. These include your disciplinary and grievanceA concern, problem or complaint which a member of staff raises with his employer. procedures. This is because it is more difficult to change such procedures if they are included in your contracts and the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. could theoretically sue you if you do not follow exactly what the procedures say.

3. You must ensure your contract does not discriminate To treat someone differently directly or indirectly becasue of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation.against those with protected characteristicsAge, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex or sexual orientation. ; see Q&A 10.

4. If your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. will be part-time bear in mind that part-time staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. must be treated equally to full-time staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer.; see Q&A 12 for more information.

5. Given your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s seniority, you should consider the following before completing the template contract (there is space within the template for the below information to be included):

   1. You will typically want to have a longer notice period(1) The length of time in advance which a notice must be given before it can take effect (2) The requirement to inform employees that they are being dismissed a certain amount of time in advance of their last day of employment. for a senior employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. so that you will have time to prepare for a transition if they leave your business.

   2. You may want to explain when you can terminate the contract if you need to. For example, if the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is unable to carry out their duties for a long period of time, you will want to have the ability to replace them.

   3. If they leave your business you will want to do what you can to protect your business interests (such as your confidential information and business contacts). For further information on what kinds of protection you can include in your contract, see Q&A 15 and following.

It must include the information set out in Q&A 3; aside from this, it's up to you, although there are certain provisions that it's wise to include.

You can use Employment contract as a template. If your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is an apprenticeA person who is taken on to learn a trade or skill. A modern arrangement involves an apprentice, an employer and a training provider such as a college., see Q&A 13.

Note the following:

1. You must state clearly in the contract when it will end, whether this will be on a specified date or when a certain event happens or does not happen, eg the conclusion of a project or the return to work of an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. on maternity leaveA period of leave from work available to pregnant women and women who have recently given birth, during which they are still entitled to the benefit of all terms in their contract of employment (except remuneration terms), and after which they are entitled to return to work..

2. This template includes all of the information that you are legally required to provide to new employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in writing and various extra provisions to help the smooth running of your business. There are some terms your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.’s contract must include or which will automatically be included by law, even if you try to exclude them, eg terms relating to minimum wage and your obligations to provide a safe place and system of work. For example, even if your contract stipulates an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is to be paid less than the national minimum wageThe minimum hourly wage that employers must pay their staff. Staff who are aged 21 and over must be paid the National living wage. or the national living wageThe minimum hourly wage that employers must pay their staff who are aged 21 and over. Staff who are aged under 23 must be paid the National minimum wage., they will nevertheless be entitled to receive the minimum wage for their work. If you do not pay them enough, they can bring a claim against you for the balance.

3. This template is designed to work with the template Staff handbook and policies. Some matters are addressed in the handbook rather than the contract. These include your disciplinary and grievanceA concern, problem or complaint which a member of staff raises with his employer. procedures. This is because it is more difficult to change such procedures if they are included in your contracts and the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. could theoretically sue you if you do not follow exactly what the procedures say.

4. It is particularly important that the contract you offer your temporary employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is just as favourable as the contract you offer permanent employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in a similar position; see Q&A 11.

5. You must ensure your contract does not discriminate To treat someone differently directly or indirectly becasue of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation.against those with protected characteristicsAge, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex or sexual orientation. ; see Q&A 10.

6. If your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. will be part-time bear in mind that part-time staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. must be treated equally to full-time staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer.; see Q&A 12.

7. The more junior the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work., the less likely you are to be able to enforce any provision in their contract to stop them competing with your business in some way after they leave eg by working for a competitor or poaching clients or staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer.. For this reason it is not recommended that your junior staff contractsThe agreements under which staff members work, which may be contracts of employment, contracts with an agency or agencies which they are supplied by, or contracts to provide services to the employer. have lots of restrictions like this in them. If the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. you are hiring is going to be very integrated into the business and you are worried about, for example, them taking confidential information or clients to a competitor if they leave, see Q&A 9 for a contract that contains protections.

8. Bear in mind that if you are preparing a contract for a temporary staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. member who has been continuously employedHow long a person has been employed without a break lasting at least a week. Time off work whilst still employed (eg annual leave, sick leave etc) does not count as a break. by you for four years or more on a succession of temporary contracts, they will (in the majority of cases) automatically be considered a permanent employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. and be entitled to all the same rights as your other permanent employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work., most notably a minimum notice period(1) The length of time in advance which a notice must be given before it can take effect (2) The requirement to inform employees that they are being dismissed a certain amount of time in advance of their last day of employment. before dismissal.

It must include the information set out in Q&A 3; aside from this, it's up to you, although there are certain provisions that it's wise to include.

You can use Employment contract as a template.

Note the following:

1. You must state clearly in the contract when it will end, whether this will be on a specified date or when a certain event happens or does not happen, eg the conclusion of a project or the return to work of an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. on maternity leaveA period of leave from work available to pregnant women and women who have recently given birth, during which they are still entitled to the benefit of all terms in their contract of employment (except remuneration terms), and after which they are entitled to return to work..

2. This template includes all of the information that you are legally required to provide to new employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in writing and various extra provisions to help the smooth running of your business. There are some terms your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.’s contract must include or which will automatically be included by law, even if you try to exclude them, eg terms relating to your obligations to provide a safe place and system of work.

3. This template is designed to work with the template Staff handbook and policies. Some matters are addressed in the handbook rather than the contract. These include your disciplinary and grievanceA concern, problem or complaint which a member of staff raises with his employer. procedures. This is because it is more difficult to change such procedures if they are included in your contracts and the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. could theoretically sue you if you do not follow exactly what the procedures say.

4. You must ensure your contract does not discriminate To treat someone differently directly or indirectly becasue of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation.against those with protected characteristicsAge, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex or sexual orientation. ; see Q&A 10.

5. It is particularly important that the contract you offer your temporary employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is just as favourable as the contract you offer permanent employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in a similar position. See Q&A 11 for more information.

6. If your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. will be part-time bear in mind that part-time staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. must be treated equally to full-time staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer.; see Q&A 12 for more information.

7. Given your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s seniority, you should consider the following before completing the template contract (there is space within the template for the below information to be included):

   1. You may want to explain when you can terminate the contract if you need to. For example, if the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is unable to carry out their duties for a long period of time, you will want to have the ability to replace them.

   2. If they leave your business you will want to do what you can to protect your business interests (such as your confidential information and business contacts). For further information on what kinds of protection you can include in your contract, see Q&A 15 and following.

8. Bear in mind that if you are preparing a contract for a temporary staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. member who has been continuously employedHow long a person has been employed without a break lasting at least a week. Time off work whilst still employed (eg annual leave, sick leave etc) does not count as a break. by you for four years or more on a succession of temporary contracts, they will (in the majority of cases) automatically be considered a permanent employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. and be entitled to all the same rights as your other permanent employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work., most notably a minimum notice period(1) The length of time in advance which a notice must be given before it can take effect (2) The requirement to inform employees that they are being dismissed a certain amount of time in advance of their last day of employment. before dismissal.

You must make sure that you don't give employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. less favourable terms because they have a protected characteristicAge, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex or sexual orientation. . If you do, you are at best at a substantial risk of a dissatisfied and demotivated workforce and at worst you could face a claim for discriminationTreating someone differently directly or indirectly because of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation..

To avoid this, do the following:

1. Treat all comparable employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. equally, for example, you must not pay women less than men where they are in comparable positions (see Staff pay for the rules on this).

2. Be careful not to discriminate To treat someone differently directly or indirectly becasue of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation.indirectly by offering different terms to different groups of employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. that disadvantage one group more than another. For example, if you have working hours that are particularly difficult for single parents to comply with, these are likely to be discriminatory against women, who form the large majority of single parents.

3. Note that there is a limited legal exception which permits you to discriminate To treat someone differently directly or indirectly becasue of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation.indirectly if you can justify it as an appropriate and necessary way of achieving a genuine aimAlternative Investment Market, a sub-market on the London Stock Exchange for growing companies. For example, a contractual requirement to regularly work a full day on a Saturday rota could be discriminatory against those for whom Saturday is the sabbath. It may be justified if it is your main trading day and Saturday working is unpopular with your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. generally, such that any exception would create tension among them.

Note that there are also protections for temporary employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. (see Q&A 11) and part-time employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. (see Q&A 12).

Yes. You must make sure the contract you offer your temporary employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is just as favourable as the contract you offer permanent employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in a similar position. For these purposes, comparable employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. are those doing the same or broadly similar work at the same place of work (or, if there is no one comparable working at the same place, those working at a different location).

Simply put, a fixed-term or temporary employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. should get the same pay or benefits as a comparable full-time employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work., pro-rated for how long they will be with you. You must not give them a less favourable contract simply because it is temporary, unless the overall package you are offering is at least of the same value as what you are offering to full-time employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work., otherwise you may face a claim for discriminationTreating someone differently directly or indirectly because of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation..

In limited circumstances, you can include a less favourable term in your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s contract, without giving them anything to offset it. You can only do this if you need to do so for a real business reason and you have balanced that business need against the impact on the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. before deciding to treat them differently. However, any difference in treatment always risks employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. dissatisfaction and discriminationTreating someone differently directly or indirectly because of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation. claims, even if you are acting within your legal rights. If practicable, it is therefore advisable to provide a payment to the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. to offset the fact that they are not receiving a benefit or to ensure that their overall package is of the same value.

Example: your temporary employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is on a four-month contract. A comparable permanent employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. has a companyA private company limited by shares incorporated and registered in England and Wales. car. The cost of providing this for four months is disproportionate. It would be advisable to ensure the temporary employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s overall package is at least the same value as permanent employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. or to provide a financial payment to reflect this difference.

Yes. Except in very limited circumstances, the contract you offer your part-time employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. must be just as favourable as the contract that you offer full-time employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in a similar position, otherwise you could face a discriminationTreating someone differently directly or indirectly because of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation. claim. For these purposes, comparable full-time employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. are those doing the same or broadly similar work at the same place of work (or, if there is no one comparable working at the same place, those working at a different location).

Simply put, your part-time employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. should get the same pay or benefits as equivalent full-time employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work., just pro-rated to reflect the number of weekly hours they work. For example, if a full-time employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is paid £25,000 and you have a part-time employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in a comparable role who works 3 days per week, you must pay your part-time employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. a pro-rated equivalent of £15,000.

In limited circumstances, you can include a less favourable term in your part-time employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s contract. You can only do this if you need to do so for a real business reason and you have balanced this business need against the impact on the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. before deciding to treat them differently . Any difference in treatment always risks employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. dissatisfaction and discriminationTreating someone differently directly or indirectly because of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation. claims, even if you are acting within your legal rights. If practicable, it is advisable to treat your employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. equally or otherwise as fairly as possible. For example, if you are not able to pro-rate a benefit, you can of course provide the whole amount, or give the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. a financial payment to represent the equivalent benefit. Alternatively, you could offer to fund the pro-rated proportion for the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. with them funding the rest.

Example: Your full-time employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. receive companyA private company limited by shares incorporated and registered in England and Wales. cars but the cost of providing this to part-time employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is disproportionate. It is advisable to make a pro-rated payment to represent the benefit or, if practicable, two part-time employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. could shareA share in the capital of a company (sometimes also referred to as stock, for example in relation to US companies). Shares in a company give to the holders, known as shareholders, rights in relation to that company such as to vote, to receive dividends and to a return of capital. Holders of shares in a company own that company and the company, not its shareholders, owns the company's assets. a car.

Generally, you will need an apprenticeship agreement and a commitment statement signed by your business, the training provider and the apprenticeA person who is taken on to learn a trade or skill. A modern arrangement involves an apprentice, an employer and a training provider such as a college. themselves. Broadly, the commitment statement details what support you offer the apprenticeA person who is taken on to learn a trade or skill. A modern arrangement involves an apprentice, an employer and a training provider such as a college., your role and responsibilities in the apprenticeship, the training provider's schedule, details of funding and how to resolve queries or complaints.

You must be careful when preparing a contract for an apprenticeA person who is taken on to learn a trade or skill. A modern arrangement involves an apprentice, an employer and a training provider such as a college.. Official schemes which attract government funding and support have very specific requirements as to how they work and what must be included in the paperwork. If you do not comply with the appropriate requirements, your apprenticeship is likely to fall outside the government schemes. This can mean it will not attract funding and will make it very difficult for you to end the apprenticeship other than for gross misconductUnacceptable or improper behaviour.

Your training provider will need to be a key part of putting together your contractual documentation for the apprenticeship. Start by using the government's tool to find a suitable provider.

Apprenticeships for staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. who are members of the military are outside the scope of this service.

Yes. You can include a clauseA provision or section. Usually in a contract. in your employment contracts stating that there is a probationary periodA period of time during the beginning of an employment relationship where new hires can usually be dismissed with less notice. for new staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. members. You can choose how long to make this (often one, three or six months, depending on the nature of the job).

Usually this clauseA provision or section. Usually in a contract. makes it clear that your new employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s performance will be monitored and allows either you or your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. to end their employment at short notice if it does not work out. There is often an option to extend the probationary periodA period of time during the beginning of an employment relationship where new hires can usually be dismissed with less notice. by a certain amount of time if this is necessary.

It is important to include the requirement to confirm successful completion of probationA period of time during the beginning of an employment relationship where new hires can usually be dismissed with less notice. in writing, to prevent employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from inadvertently passing probationA period of time during the beginning of an employment relationship where new hires can usually be dismissed with less notice. once the time limit has passed.

For a template employment contract, including suitable probationA period of time during the beginning of an employment relationship where new hires can usually be dismissed with less notice. clausesProvisions or sections. Usually in a contract. , see Employment contract. If you have an existing contract model for your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer., check whether it includes a probationA period of time during the beginning of an employment relationship where new hires can usually be dismissed with less notice. clauseA provision or section. Usually in a contract. and consider adding to or varying your existing contracts for any new staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. members if they do not offer sufficient protection to your business.

A confidentiality clauseA clause in an agreement prohibiting someone from divulging confidential information. will say your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. cannot disclose any specified confidential information to anyone else either during or after their employment. You cannot use it to protect all of your business information; it can only protect information that is truly confidential to your business.

When putting together a confidentiality clauseA clause in an agreement prohibiting someone from divulging confidential information. , bear in mind the following:

1. Broadly, information which can be protected in a contract includes any which would cause significant harm to your business if disclosed to a competitor. Skill, experience and general knowledge used or picked up by your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. during their work for you cannot be protected in this way. See Q&A 18 for when and how you might limit ex-employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from competing with your business after they leave.

2. Confidentiality clausesProvisions or sections. Usually in a contract. do not need to be time limited but they must be reasonable and should set out specific examples of what type of information you consider to be confidential to your business. What is reasonable will depend on the specific context of your business activities and your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s role, therefore confidentiality clausesProvisions or sections. Usually in a contract. should be tailored to the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in question.

3. Importantly, you must ensure that the confidentiality provisions in the employment contract (or separate confidentiality agreement if you are using one) do not result in your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. member feeling unable to discuss or report any discriminationTreating someone differently directly or indirectly because of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation. or criminal activity that occurs during their employment with you. You should consider making it clear that the confidentiality provisions will not prevent them from whistleblowingWhen an individual discloses information, usually about wrongdoing within a business, that he reasonably believes is in the public interest. For example if a crime has been committed or someone's health and safety has been endangered. or disclosing any discriminatory behaviour. Equally, you must ensure that your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. members are not under any duress to sign a confidentiality provision; give them time to review it and to seek legal advice from a solicitor where appropriate.

Confidentiality clausesProvisions or sections. Usually in a contract. are included in Employment contract, with guidance for you to tailor them as required. If you have an existing contract model for your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer., check whether it includes confidentiality provisions and consider adding to or varying your existing contracts if they do not offer sufficient protection to your business. See Process for changing employee contracts for how to go about this.

You should also bear in mind that you own the patentsLegal protection giving an exclusive right to produce a certain invention for a certain period of time (currently 20 years) to its owner., designs and copyrightA legal protection which gives people who create literary, musical, artistic or certain other types of work the exclusive right to use the work, meaning that others cannot generally use it without the owner's permission. of anything your employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. make during the course of their employment by you, and you should take steps to protect this IPIntellectual Property. Unique products of human intelligence and creation, such as copyrights, patents and designs.. Depending on what your employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. will be creating, see the following for further information: Employees and trade marks, Employees and copyright, Employees and design rights, Employees and patents.

Restrictive covenantsContractual terms which place restrictions on someone. For example, a term in an employment contract or shareholders' agreement preventing a former employee or shareholder from competing or taking clients or staff with him to another business. In property, it could be a term in a tenancy agreement limiting what sort of business can be run from the premises. are clausesProvisions or sections. Usually in a contract. that can be included in your employment contracts to stop employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from competing with your business after they leave. They come in various forms, including the following:

1. Non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business.

   This will say your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. cannot work with any competitor or set up their own competing business for a specified period of time after leaving your employ. See Q&A 18 for more information.

2. Non-solicitation clauseA provision or section. Usually in a contract.

   This will say that the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. must not poach any of your clients or customers for a specified period of time after leaving your employ. See Q&A 22 for more information.

3. Non-dealing clauseA provision or section. Usually in a contract.

   This will say that the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. must not work with your clients and customers for a specified period of time after leaving your employ, even if the customer approaches them. These clausesProvisions or sections. Usually in a contract. are particularly difficult to enforce so you should always use non-solicitation clausesProvisions or sections. Usually in a contract. as well. See Q&A 22 for more information.

4. Anti-poaching clauseA provision or section. Usually in a contract.

   This will say that the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. must not entice any of your remaining staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. away from your business for a specified period of time after leaving your employ. See Q&A 26 for more information.

Where you have multiple clausesProvisions or sections. Usually in a contract. in your employment contracts designed to protect different legitimate business interests you must ensure that each clauseA provision or section. Usually in a contract. is reasonable, but also that all of the clausesProvisions or sections. Usually in a contract. taken together provide no more protection than is reasonably adequate. Optional restrictive covenantsContractual terms which place restrictions on someone. For example, a term in an employment contract or shareholders' agreement preventing a former employee or shareholder from competing or taking clients or staff with him to another business. In property, it could be a term in a tenancy agreement limiting what sort of business can be run from the premises. for senior employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. are included in Employment contract.

Yes, potentially. Including a non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. in your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s employment contract will restrict your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from working with any competitor or setting up their own competing business for a specified period of time after leaving your employ.

You should bear in mind however, that there is a limit to this; a non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. cannot be enforced if it amounts to an unjustified restraint of trade. This is the case if goes further than is reasonably necessary to protect your legitimate business interests eg it covers too wide an area, too broad a range of activities, or it lasts for too long a period. See Q&A 19 for further information.

Employment contract includes example non-compete clausesTerms in staff contracts forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. with guidance on how to tailor them to your needs. If you have an existing contract model for your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer., check whether it includes non-compete provisions and consider adding to or varying your existing contracts if they do not offer sufficient protection for your business. See Process for changing employee contracts for how to go about this.

A non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. cannot be enforced if it amounts to an unjustified restraint of trade. This is the case if it goes further than is reasonably necessary to protect your legitimate business interests eg it covers too wide an area, too broad a range of activities, or it lasts for too long a period.

To maximise the chances of your non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. being valid, bear in mind the following:

1. You cannot use a non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. just to stop valuable employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. taking their skillset elsewhere (see Q&A 20 for further information).

2. You should not use a blanket non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. for all of your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer.. You must decide whether it is reasonable for you to include a non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. in the employment contract in question. Non-compete clausesTerms in staff contracts forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. are more likely to be appropriate for senior members of staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. who have access to sensitive or commercially critical information. The reasonableness of the clauseA provision or section. Usually in a contract. will be considered as at the date on which the employment contract was entered into (eg your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s position and level of seniority at that time), and on the basis of the parties' reasonable expectations at that time.

3. You cannot ban an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from competing with you over too large an area. Consider the geographical scope of the restriction to ensure that your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. will not be unreasonably restrained from working elsewhere. For example, if your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. will only be working for you in a certain part of the UKUnited Kingdom of Great Britain and Northern Ireland, a UKUnited Kingdom of Great Britain and Northern Ireland-wide restriction is less likely to be reasonable.

4. You cannot ban an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from competing with you indefinitely (see Q&A 21 for further information).

5. You should not use a non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. if a less onerous alternative would suffice. Consider first whether another clauseA provision or section. Usually in a contract. , such as a non-dealing or non-solicitation clauseA provision or section. Usually in a contract. (see Q&A 22 for more information) would suffice in protecting the legitimate business interest you have identified. These sorts of clausesProvisions or sections. Usually in a contract. would enable your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. to work for a competitor but ban them from eg approaching or dealing with your customers for a period of time. For example, you may decide that a non-dealing clauseA provision or section. Usually in a contract. would be inadequate because your business's customers are not easily identifiable or because your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. has a particularly strong influence over them by virtue of their position in your business.

Employment contract includes example non-compete clausesTerms in staff contracts forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. with guidance on how to tailor them to your needs. If you have an existing contract model for your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer., check whether it includes non-compete provisions and consider adding to or varying your existing contracts if they do not offer sufficient protection for your business. See Process for changing employee contracts for how to go about this.

Yes, potentially. Including a non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. in your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s employment contract will restrict your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from working with a competitor for a specified period of time after leaving your employ. Employment contract includes example non-compete clausesTerms in staff contracts forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. with guidance on how to tailor them to your needs.

However, you must bear in mind that you cannot use a non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. just to stop valuable employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. taking their skillset elsewhere. Non-compete provisions are generally only justifiable if you are actually trying to protect your trade secrets and confidential information, not if you just want to stop a valuable employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from being able to move to a rival business. In some instances, you may also be justified in using a non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. to protect your client connections eg if your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. had established customer connections and there was a risk that they would take those with them to their new employment, or they had in-depth knowledge of your fees in a very price-sensitive market.

Similarly, you are unlikely to be able to prevent your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from working with any business that is similar to your own; for the non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. to be reasonable, it must only refer to genuine competitors of your business. Equally, you will not necessarily be able to prevent your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from working with your competitors in any capacity whatsoever, and you should consider what kind of work it would be reasonable for them to be restricted from undertakingA promise to do or not do something, commonly contained in a contract. in the circumstances.

See Q&A 19 for other points you need to bear in mind when drafting a non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business..

Including a non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. in your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s employment contract will restrict your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from working with a competitor for a specified period of time after leaving your employ.

You can only protect your business's legitimate interest by using a non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. for a reasonable period of time. In most cases, you are unlikely to be able to restrict an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from working for a competitor for more than 6 to 12 months, but this will very much depend on the facts. When considering what would be reasonable, if the legitimate business interest you are trying to protect is your confidential information, you should bear in mind the shelf-life of the information you are trying to protect (ie how long the information is actually likely to remain confidential). For example, if you want to protect information about your business’ pricing strategy which changes frequently, it will only retain its value to a competitor for a short period, so you cannot try to protect it with a non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. of a much longer duration.

See Q&A 19 for other points you need to bear in mind when drafting a non-compete clauseA term in a staff contract forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. and Employment contract for example clausesProvisions or sections. Usually in a contract. .

Yes, potentially. To do this, you should consider including non-dealing and/or non-solicitation clausesProvisions or sections. Usually in a contract. in their employment contract.

1. A non-solicitation clauseA provision or section. Usually in a contract. will prevent your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from approaching your clients or customers. Such clausesProvisions or sections. Usually in a contract. will only be legally enforceable if they are necessary to protect a legitimate business interest – in this case, safeguarding your trade connections. You are more likely to be able to use a non-solicitation clauseA provision or section. Usually in a contract. the narrower and more specialist the market in which your business operates.

2. A non-dealing clauseA provision or section. Usually in a contract. is broader; it bans your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from having any dealings at all with your customers. Even if they are approached, they are restricted from responding. Due to their breadth, non-dealing clausesProvisions or sections. Usually in a contract. are harder to legally enforce and should usually only be used if a non-solicitation clauseA provision or section. Usually in a contract. will not give you enough protection (eg because your business is of a particularly personal nature and so clients are more likely to seek to follow your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.).

Bear in mind that there is a limit to how much you can protect your business from former employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. poaching your clients. A non-solicitation or non-dealing clauseA provision or section. Usually in a contract. cannot be enforced if it amounts to an unjustified restraint of trade. This is the case if eg it covers too wide an area, too broad a definition of your actual or potential customer base, or lasts for too long a period. See Q&A 23 for further information.

Employment contract includes example non-solicitation clausesProvisions or sections. Usually in a contract. with guidance on how to tailor them to your needs. If you have an existing contract model for your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer., check whether it includes non-solicitation or non-dealing provisions for appropriate employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. and consider adding to or varying your existing contracts if they do not offer sufficient protection to your business. See Process for changing employee contracts for how to go about this.

A non-solicitation or non-dealing clauseA provision or section. Usually in a contract. cannot be enforced if it amounts to an unjustified restraint of trade; these clausesProvisions or sections. Usually in a contract. must not go further than reasonably necessary to protect your legitimate business interests. They will not be enforceable if they cover too wide an area, too broad a definition of your actual or potential customer base, or last for too long a period.

To maximise the chances of your non-solicitation or non-dealing clauseA provision or section. Usually in a contract. being valid, bear in mind the following:

1. You should not use blanket non-solicitation and non-dealing clausesProvisions or sections. Usually in a contract. in all employment contracts and you must always consider whether they will be reasonable in the circumstances. The nature of the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s job, their level of seniority and their ability to influence customers will be relevant to whether the clauseA provision or section. Usually in a contract. (s) are reasonable. For example, the more senior the individual and the more difficult it will be for you to replace them and train their replacement, the more likely it is that a non-dealing clauseA provision or section. Usually in a contract. will be appropriate. The reasonableness of the clausesProvisions or sections. Usually in a contract. will be considered as at the date on which the employment contract was entered into (eg with regard to your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s position and level of seniority at that time) and on the basis of the parties' reasonable expectations at that time (eg which of your clients that it was anticipated that your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. would work with).

2. You cannot ban an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from contacting or dealing with your clients over too large an area. If you want to restrain your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from targeting any of your clients in a specific geographical area, you must be able to justify this. For example, if almost all of your clients are within a 10 mile radius of your business, you are unlikely to be able to justify restricting your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from dealing with any clients nationwide.

3. You can only rarely ban an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from contacting or dealing with clients that they did not deal with during their employment with you (see Q&A 24 for further information).

4. You cannot ban an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from contacting or dealing with your customers indefinitely (see Q&A 25 for further information).

Employment contract includes example non-solicitation clausesProvisions or sections. Usually in a contract. with guidance on how to tailor them to your needs. If you have an existing contract model for your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer., check whether it includes non-solicitation or non-dealing provisions for appropriate employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. and consider adding to or varying your existing contracts if they do not offer sufficient protection to your business. See Process for changing employee contracts for how to go about this.

A non-solicitation clauseA provision or section. Usually in a contract. that prevents your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from soliciting (for a defined period of time) only customers whom they have previously had dealings with is much more likely to be permitted than a clauseA provision or section. Usually in a contract. preventing solicitation of any client of your business. Of course, this depends on the context of your business and the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in question, as if your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. is likely to have special knowledge or influence over the requirements of your customers, you might be justified in preventing them from soliciting any of your customers. In addition, if you work in a particularly specialist market you are more likely to be able to justify a non-dealing clauseA provision or section. Usually in a contract. since the pool of clients will be much smaller. You must be careful, however, to ensure that any clauseA provision or section. Usually in a contract. does not go so far as to prevent your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from working in similar employment at all.

See Q&A 23 for other points you need to bear in mind when drafting a non-solicitation and/or non-dealing clauseA provision or section. Usually in a contract. and Employment contract for example clausesProvisions or sections. Usually in a contract. .

Including a non-solicitation clauseA provision or section. Usually in a contract. in your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s employment contract will prevent your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from approaching your clients or customers. A non-dealing clauseA provision or section. Usually in a contract. is broader; it bans your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from having any dealings at all with your customers. Even if they are approached, they are restricted from responding.

These clausesProvisions or sections. Usually in a contract. must not go further than reasonably necessary to protect your legitimate business interests. They should be limited in duration, otherwise they will amount to an unjustified restraint on trade and thus be unenforceable.

What is a reasonable duration will be is very dependent on the facts, particularly the nature of your business and the status of the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in question. For example, while an 18 month non-solicitation clauseA provision or section. Usually in a contract. may be appropriate for a Managing DirectorThe directors of a company are the individuals who make up the company's board of directors. Directors may be natural persons or companies, but each company must have at least one director who is a natural person. The board is the main decision-making body of the company. who is expected to forge close relationships to all the major clients of your business, it is much less likely to be reasonable for a more junior employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.. In addition, if you have included a non-dealing clauseA provision or section. Usually in a contract. because you want to protect your confidential information (eg your pricing structure), you should consider how long that information is likely to remain of use to a competitor. Finally, you should consider whether there are any industry standards about non-dealing or non-solicitation clausesProvisions or sections. Usually in a contract. (eg if it is usual practice in your sector for them to cover a 12 month period).

See Q&A 23 for other points you need to bear in mind when drafting a non-solicitation and/or non-dealing clauseA provision or section. Usually in a contract. and Employment contract for example clausesProvisions or sections. Usually in a contract. .

Yes, potentially. If you want to ban your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from poaching your remaining staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. when they leave your business, you should consider including an anti-poaching clauseA provision or section. Usually in a contract. in their employment contract. These clausesProvisions or sections. Usually in a contract. are designed to prevent your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. from soliciting or enticing other employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. away from your business after they leave.

You should bear in mind, however, that it will not always be appropriate or reasonable for you to include an anti-poaching clauseA provision or section. Usually in a contract. in employment contracts as in some circumstances they will be considered to be an unjustified restraint of trade. It is also much more difficult to prevent your existing staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. from approaching an ex-employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. for employment of their own accord as that would restrict their employment opportunities.

Employment contract includes example anti-poaching clausesProvisions or sections. Usually in a contract. with guidance on how to tailor them to your needs.

It will not always be appropriate or reasonable for you to include an anti-poaching clauseA provision or section. Usually in a contract. in employment contracts as in some circumstances they will be considered to be an unjustified restraint of trade.

To maximise the chances of your anti-poaching clauseA provision or section. Usually in a contract. being valid, bear in mind the following:

1. Any anti-poaching clauseA provision or section. Usually in a contract. should be limited to prevent poaching of only those employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. who were employed at your business at the same time as the employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. in question. It should also usually only prevent poaching of key employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. (eg directorsThe directors of a company are the individuals who make up the company's board of directors. Directors may be natural persons or companies, but each company must have at least one director who is a natural person. The board is the main decision-making body of the company. or senior employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.) who are important to the business. Only in very limited circumstances are you able to prevent poaching of any employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. (eg if you have a very small workforce).

2. You should not use blanket anti-poaching clausesProvisions or sections. Usually in a contract. in all your employment contracts and you must always consider whether they will be reasonable in the circumstances and tailor them to the particular employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. concerned. They are much more likely to be reasonable in the employment contracts of senior employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. who are able to exert influence over your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. than in the contracts of junior employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.. They are also more likely to be appropriate if your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. work in teams. Whether or not an anti-poaching clauseA provision or section. Usually in a contract. is reasonable will be very fact specific, and it will be considered as at the date on which the employment contract was entered into (eg your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.'s position and level of seniority at that time), and on the basis of the parties' reasonable expectations at that time.

3. Anti-poaching clausesProvisions or sections. Usually in a contract. must be time limited. You should consider what will be reasonable in your circumstances to protect your business. It may be appropriate for you to consider whether there are any industry standards setting out the duration of anti-poaching clausesProvisions or sections. Usually in a contract. .

4. You cannot stop your existing staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. from approaching an ex-employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. for a job; see Q&A 28 for further information.

Employment contract includes example anti-poaching clausesProvisions or sections. Usually in a contract. with guidance on how to tailor them to your needs. If you have an existing contract model for your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer., check whether it includes anti-poaching provisions and consider adding to or varying your existing contracts if they do not offer sufficient protection to your business. See Process for changing employee contracts for how to go about this.

You cannot specifically prevent your existing staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. from approaching an ex-employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. for employment, as that would restrict their employment opportunities and be considered unfair.

However, you may be able to include non-compete clausesTerms in staff contracts forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. in your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. contracts, which could help protect you if your current staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. members want to follow your ex-employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. to a competitor business; see Q&A 18 and following for further information. Employment contract includes example non-compete clausesTerms in staff contracts forbidding them from competing with their employer's business, either by working for a competitor or setting up their own business. with guidance on how to tailor them to your needs.

If you believe that your ex-employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. has breachedViolation of a legal or moral obligation. the restrictive covenantsContractual terms which place restrictions on someone. For example, a term in an employment contract or shareholders' agreement preventing a former employee or shareholder from competing or taking clients or staff with him to another business. In property, it could be a term in a tenancy agreement limiting what sort of business can be run from the premises. in their employment contract, you may be able to apply to court for an interim injunctionA court order requiring or preventing one party from doing something temporarily, usually until their legal dispute with another party has been resolved. to prevent them continuing to do so. If this is a course you wish to take, it is absolutely essential that you act quickly to stop any damage to your business, and to ensure that the courts do not penalise you for taking too long by denying you application. You could also claim damages An sum of money ordered by a court to be paid to a person as compensation for loss or injury. for any loss that you have suffered as a result of the breachA violation of a legal or moral obligation. . Bear in mind that if you breachA violation of a legal or moral obligation. the employment contract (eg by terminating it without giving sufficient notice), you may not be able to enforce a restrictive covenantA contractual term which places restrictions on someone. For example, a term in an employment contract or shareholders' agreement preventing a former employee or shareholder from competing or taking clients or staff with him to another business. In property, it could be a term in a tenancy agreement limiting what sort of business can be run from the premises. in the contract afterwards.

For more information, see Taking legal action against staff.

If you will be sharing personal dataAny information about an identifiable, living person. Information which cannot be used to identify someone on its own will still be personal data if it can be used in combination with other information to identify that individual. with the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. (for example, data about your customers or staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer.) you will need a specific agreement in place to ensure the proper use of that information in accordance with data protectionThe area of law which deals with the way in which data can be handled. law. Failure to comply with your data protectionThe area of law which deals with the way in which data can be handled. obligations can have serious financial and reputational consequences for your business, including fines of up to £17.5 million or 4% of your global annual turnoverThe amount of money taken by a business, before deductions (eg expenses, tax etc)..

For full guidance about your data protectionThe area of law which deals with the way in which data can be handled. obligations when sharing personal dataAny information about an identifiable, living person. Information which cannot be used to identify someone on its own will still be personal data if it can be used in combination with other information to identify that individual. see The rules about sharing personal data. For a template agreement you can enter into with the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. (if you are the data controllerThe person or company which decides how and why personal data will be processed. It may act on its own or jointly with other controllers. and the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. is the data processorA person or company which uses, stores or otherwise deals with personal data on instructions from someone else, eg a payroll provider is data processor for its clients of personal data about their staff.) see Template data processing agreement.

There is no universal model for a freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor.'s standard terms and conditions. It is important that you understand what you are signing up to before you agree to them. They will likely be weighted in favour of the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. so you will have to consider whether to try and negotiate changes, and if so, to which part(s) of the terms and conditions. Even if you are not in a position to negotiate terms with a potential freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. before you commission work from them, it is worth being aware of common terms that may disadvantage you in future.

Whilst all contracts will vary, the key terms of concern are set out below:

1. names of the parties (see Q&A 33);

2. services to be provided and how any variations or extras will be dealt with (see Q&A 34);

3. saying that anything that has been said or agreed but not written into the contract cannot be relied upon (see Q&A 35);

4. excluding responsibility for breachesViolations of a legal or moral obligation. or failures under the contract (see Q&A 36);

5. intellectual propertyA product of human creativity such as copyrights, trademarks, patents and designs. (see Q&A 37); and

6. data protectionThe area of law which deals with the way in which data can be handled. (see Q&A 39).

If your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. does not have their own contract ready, you can use Consultancy agreement, which may be tailored to favour the companyA private company limited by shares incorporated and registered in England and Wales. engaging the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor..

It is important to check that the agreement gives the party names that you were expecting.

If you are dealing with a companyA private company limited by shares incorporated and registered in England and Wales. , ensure it gives the registered companyA private company limited by shares incorporated and registered in England and Wales. name, address and Companies HouseThe registrar of all companies in the UK. Companies House incorporates and dissolves limited companies, registers the information companies are legally required to supply, and makes that information available to the public. number, not a trading nameA name under which any person, partnership or company carries on business. Also known as a business name. For companies, it may not be the same as the registered name of the company.. This avoids any dispute later as to who is responsible for carrying out the agreement and who you are paying. If the name on the contract is not one you were expecting, investigate further. It may be simply that the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. has set themselves up as a limited companyA public or private company whose owners are responsible for its losses only to the extent of the amount of money they invested. for tax reasons.

If your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. does not have their own contract ready, you can use Consultancy agreement, which may be tailored to favour the companyA private company limited by shares incorporated and registered in England and Wales. engaging the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor.. If you are a freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. providing consultancy services to a companyA private company limited by shares incorporated and registered in England and Wales. , see Consultancy agreements for further guidance and Consultancy agreement may be tailored to favour you, as the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor..

Make sure that there is a clear description covering all of the services that you require under the contract. If it is possible that additional work may be required once the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. gets started, check to see how this will be dealt with. For example, if it will not be included in the original price, look for a mechanism within the contract for determining any additional cost (eg by reference to an hourly rate).

If your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. does not have their own contract ready, you can use Consultancy agreement, which may be tailored to favour the companyA private company limited by shares incorporated and registered in England and Wales. engaging the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor.. If you are a freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. providing consultancy services to a companyA private company limited by shares incorporated and registered in England and Wales. , see Consultancy agreements for further guidance and Consultancy agreement may be tailored to favour you, as the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor..

It is common to have a term saying that you cannot rely on anything your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. has said outside the written terms of the contract itself. There may also be a term contracting outThe process of excluding the application of specified laws or regulations to a particular contract, usually by including something in the contract that says the particular law will not apply. of any standards that he would be legally bound by if the contract were silent on the matter, for example the legal duty for any service to be carried out with reasonable careThe degree of caution that an ordinary person would use in the circumstances. and skill.

If you are relying on a particular statement or assumption as to what work will be done or how the relationship between you will work, it is advisable to check, in writing, that the other party agrees it is part of the contract between you. For example, if your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. has assured you over the telephone that their fees will be capped at a certain number of hours worked, but their terms and conditions do not mention this.

If your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. does not have their own contract ready, you can use Consultancy agreement, which may be tailored to favour the companyA private company limited by shares incorporated and registered in England and Wales. engaging the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor.. If you are a freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. providing consultancy services to a companyA private company limited by shares incorporated and registered in England and Wales. , see Consultancy agreements for further guidance and Consultancy agreement may be tailored to favour you, as the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor..

Your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. may well seek to exclude or limit their liability to you if they fail to comply with their obligations under the contract or are negligentFailing to exercise the care that a reasonable person would in the circumstances. Intention is irrelevant. in how they carry it out. Such terms are often called exclusion or exemption clausesProvisions or sections. Usually in a contract. . To be legally effective against you, these terms must be reasonable and very clear about what they cover. Your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. may also seek to include a provision in their contract allowing them to have the opportunity to rectify any breachesViolations of a legal or moral obligation. of their performance of the services before you are able to claim damages An sum of money ordered by a court to be paid to a person as compensation for loss or injury. for breach of contractFailing to keep to the terms of a contract by doing something which is forbidden or failing to do something which is required under the contract.. Bear in mind that if the contract contains such a provision and you do not allow your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. the opportunity to rectify the breachA violation of a legal or moral obligation. , the damages An sum of money ordered by a court to be paid to a person as compensation for loss or injury. you will be able to recover for breach of contractFailing to keep to the terms of a contract by doing something which is forbidden or failing to do something which is required under the contract. may be capped at whatever the cost would have been of your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. rectifying the breachA violation of a legal or moral obligation. .

If any failure by the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. to deliver the agreed work would have a particularly negative impact on your business, let them know in writing before you instruct them. It encourages compliance from your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. in the first place and puts you in a stronger legal position to recover any losses from them if they do fail to honour your agreement. For example, you hire a designer to set up a website for your companyA private company limited by shares incorporated and registered in England and Wales. and you need it ready in time to take orders for Christmas which is your main source of income. Write to them to explain the importance of having it done on time and the amount of profit that you expect to make on the Christmas rush.

If your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. does not have their own contract ready, you can use Consultancy agreement, which may be tailored to favour the companyA private company limited by shares incorporated and registered in England and Wales. engaging the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor.. If you are a freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. providing consultancy services to a companyA private company limited by shares incorporated and registered in England and Wales. , see Consultancy agreements for further guidance and Consultancy agreement may be tailored to favour you, as the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor..

In general, intellectual propertyA product of human creativity such as copyrights, trademarks, patents and designs. created by freelancersPeople, in business for themselves, who provide services to others. They may be individuals simply working under their own names, or may offer services through companies or partnerships. Sometimes known as consultants or independent contractors. belongs to them, unless you agree otherwise before the intellectual propertyA product of human creativity such as copyrights, trademarks, patents and designs. is created. The best solution to this is to agree in your contract with the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. that you will own the relevant intellectual propertyA product of human creativity such as copyrights, trademarks, patents and designs. rights so that, if intellectual propertyA product of human creativity such as copyrights, trademarks, patents and designs. is important to you, this matter is addressed.

Depending on what your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. will be creating, see the following for further information: Freelancers and consultants and trade marks, Freelancers and consultants and copyright, Freelancers and consultants and design rights, Freelancers and consultants and patents.

If your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. does not have their own contract ready, you can use Consultancy agreement, which may be tailored to favour the companyA private company limited by shares incorporated and registered in England and Wales. engaging the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor.. If you are a freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. providing consultancy services to a companyA private company limited by shares incorporated and registered in England and Wales. , see Consultancy agreements for further guidance and Consultancy agreement may be tailored to favour you, as the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor..

If a consultantA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a freelancer or independent contractor. does work for you, and you later find out the consultantA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a freelancer or independent contractor. has breachedViolation of a legal or moral obligation. a third partyA person who is not directly involved in an existing relationship, transaction or dispute; for example, someone who is not a named party in a contract.'s intellectual propertyA product of human creativity such as copyrights, trademarks, patents and designs. while creating that work, the third partyA person who is not directly involved in an existing relationship, transaction or dispute; for example, someone who is not a named party in a contract. may try to sue you and/or the consultantA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a freelancer or independent contractor. for the breachA violation of a legal or moral obligation. . Therefore, it is important that your agreement with your consultantA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a freelancer or independent contractor. provides that your consultantA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a freelancer or independent contractor. indemnifies you (protects you) for any losses you incur due to their breachesViolations of a legal or moral obligation. of third partyA person who is not directly involved in an existing relationship, transaction or dispute; for example, someone who is not a named party in a contract. intellectual propertyA product of human creativity such as copyrights, trademarks, patents and designs..

Our template agreement (Consultancy agreement) can be adapted to help to protect you by:

1. providing that your consultantA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a freelancer or independent contractor. is liable for any breachesViolations of a legal or moral obligation. of third partyA person who is not directly involved in an existing relationship, transaction or dispute; for example, someone who is not a named party in a contract. intellectual propertyA product of human creativity such as copyrights, trademarks, patents and designs.; and

2. requiring your consultantA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a freelancer or independent contractor. to indemnifyTo agree that one party will compensate another on the occurrence of a specified event. you for any breachesViolations of a legal or moral obligation. of the agreement and maintain appropriate insurance to cover any claims.

If your consultantA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a freelancer or independent contractor. does not agree to the terms set out in our template agreement, you should contact a lawyer for advice. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.

If the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor.'s work for you will involve the transfer to or any sort of use by the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. of personal dataAny information about an identifiable, living person. Information which cannot be used to identify someone on its own will still be personal data if it can be used in combination with other information to identify that individual. collected by you, for example if he will be dealing with information about your customers, you will have legal data protectionThe area of law which deals with the way in which data can be handled. obligations. For example, you must have told your customers when you collected their personal dataAny information about an identifiable, living person. Information which cannot be used to identify someone on its own will still be personal data if it can be used in combination with other information to identify that individual. that you would be sharing it in future and who you would be sharing it with (eg in your customer privacy policyA statement made by a business explaining what information it collects about individuals and how and why it will be used, stored and shared.) and you are likely to need specific terms in place in your contract (or in a separate data sharing agreementAn agreement made between data controllers, to share personal data with each other, which must detail the data involved, what is to be done with it and why, and the roles and responsibilities of each party in relation to the data.) to ensure the proper use of that customer information in accordance with data protectionThe area of law which deals with the way in which data can be handled. law. Failure to comply with your data protectionThe area of law which deals with the way in which data can be handled. obligations can have serious financial and reputational consequences for your business, including fines of up to £17.5 million or 4% of your global annual turnoverThe amount of money taken by a business, before deductions (eg expenses, tax etc)..

For a template privacy policyA statement made by a business explaining what information it collects about individuals and how and why it will be used, stored and shared. you can use on your website, see Privacy policy and for a template data sharing agreementAn agreement made between data controllers, to share personal data with each other, which must detail the data involved, what is to be done with it and why, and the roles and responsibilities of each party in relation to the data. you can enter into with the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. (if you are the data controllerThe person or company which decides how and why personal data will be processed. It may act on its own or jointly with other controllers. and the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. is the data processorA person or company which uses, stores or otherwise deals with personal data on instructions from someone else, eg a payroll provider is data processor for its clients of personal data about their staff.) see Template data processing agreement.

For full guidance about your data protectionThe area of law which deals with the way in which data can be handled. obligations when sharing personal dataAny information about an identifiable, living person. Information which cannot be used to identify someone on its own will still be personal data if it can be used in combination with other information to identify that individual. see The rules about sharing personal data.

FreelancersPeople, in business for themselves, who provide services to others. They may be individuals simply working under their own names, or may offer services through companies or partnerships. Sometimes known as consultants or independent contractors. , by definition, work for themselves, whether they trade under their own name or are employed by a companyA private company limited by shares incorporated and registered in England and Wales. that they have set up eg for tax reasons. Legally, this means that any agreement with them to produce a piece of work is not personal to the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. themselves, ie they are usually free to subcontract some or all of the work if they wish.

Legally, a freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. can sub-contract their work (see Q&A 40) but in practice the extent to which they do so will come down to the arrangement between you.

It is important to note that you must be careful insisting that the work a freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. gives you is only produced by them. If you do, although it is not conclusive, there is a risk that they will be considered a workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. or even an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. of yours, meaning that they accrue rights against you accordingly eg for sick payPayment made by an employer to a staff member during the staff member's time off work due to illness or disability. or paid holiday leave, and their tax status could be different, potentially making you liable to deal with PAYEPay as you earn; the system of income tax collection used by employers. on their behalf.

Note that if you insist on the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. personally working for you they may have some legal rights not to be discriminated against (by reason of their age, disabilityA physical or mental impairment which has a substantial or long-term effect on a person’s ability to carry out normal day to day activities., gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex or sexual orientation), and rights to require you to make reasonable adjustments to accommodate any disabilityA physical or mental impairment which has a substantial or long-term effect on a person’s ability to carry out normal day to day activities. they have. They will not have these rights if they are free to provide a substitute.

The IR35(Also known as off-payroll working rules) HMRC rules which are designed to ensure that individuals engaged to work for a client through an intermediary, most commonly through personal service companies (PSCs), but who actually work like employees of that client, are taxed in the same way as employees or workers would be (ie they pay income tax and national insurance on the fees as opposed to their companies paying corporation tax) tax rules (aka off-payroll working rules) are rules that are designed to ensure that individuals engaged to work for a client through their own limited companyA public or private company whose owners are responsible for its losses only to the extent of the amount of money they invested. – often a personal service companyA private company limited by shares incorporated and registered in England and Wales. – but who actually work like employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. for that client, are taxed in the same way as employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. or workersStaff members who have an obligation to do their work personally for someone who is not their client or customer. would be (ie they pay income taxTax deductible on an individual's income. Not all income is taxable, as individuals have an annual personal allowance which is the amount they are allowed to earn before they are eligible to be taxed, and they may also benefit from other allowances and relief. The amount left is referred to as taxable income. and national insuranceCompulsory payments which must be made by both employers and workers for the worker to qualify for certain benefits, like state pensions. on the fees as opposed to their companiesPrivate companies limited by shares incorporated and registered in England and Wales. paying corporate tax).

The IR35(Also known as off-payroll working rules) HMRC rules which are designed to ensure that individuals engaged to work for a client through an intermediary, most commonly through personal service companies (PSCs), but who actually work like employees of that client, are taxed in the same way as employees or workers would be (ie they pay income tax and national insurance on the fees as opposed to their companies paying corporation tax) tax rules do not apply to individuals who are self-employed (eg sole tradersBusinesses each owned and operated by a single individual, which are not companies or partnerships. The individual is entitled to keep all profits made by the business (subject to any tax reduction) but is also personally responsible for any losses that the business makes.), ie individuals who do not operate through a companyA private company limited by shares incorporated and registered in England and Wales. . They also do not apply to individuals providing their services through a limited companyA public or private company whose owners are responsible for its losses only to the extent of the amount of money they invested. who are not working like employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.. See Q&A 44 for guidance on how to determine whether a contractorA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a freelancer or consultant. is working like an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work..

From 6 April 2021, important changes to the IR35(Also known as off-payroll working rules) HMRC rules which are designed to ensure that individuals engaged to work for a client through an intermediary, most commonly through personal service companies (PSCs), but who actually work like employees of that client, are taxed in the same way as employees or workers would be (ie they pay income tax and national insurance on the fees as opposed to their companies paying corporation tax) tax rules were introduced. See Q&A 43 for information about whether these rules apply to your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor.'s arrangement and for guidance about the changes.

No.

The IR35(Also known as off-payroll working rules) HMRC rules which are designed to ensure that individuals engaged to work for a client through an intermediary, most commonly through personal service companies (PSCs), but who actually work like employees of that client, are taxed in the same way as employees or workers would be (ie they pay income tax and national insurance on the fees as opposed to their companies paying corporation tax) tax rules (aka off-payroll working rules) will only apply if the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. is:

1. providing services to you through an intermediary (eg a limited companyA public or private company whose owners are responsible for its losses only to the extent of the amount of money they invested.) (see Q&A 42); and

2. working for you as if they were your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. (see Q&A 44).

Until 6 April 2021, it was up to the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. (through their intermediary) to work out whether IR35(Also known as off-payroll working rules) HMRC rules which are designed to ensure that individuals engaged to work for a client through an intermediary, most commonly through personal service companies (PSCs), but who actually work like employees of that client, are taxed in the same way as employees or workers would be (ie they pay income tax and national insurance on the fees as opposed to their companies paying corporation tax) applied to your arrangement with them and to pay the relevant tax due. From 6 April 2021 this has changed and your business (as the client) may be responsible in certain circumstances. See Q&A 45 for further guidance about whose responsibility it is for making an IR35(Also known as off-payroll working rules) HMRC rules which are designed to ensure that individuals engaged to work for a client through an intermediary, most commonly through personal service companies (PSCs), but who actually work like employees of that client, are taxed in the same way as employees or workers would be (ie they pay income tax and national insurance on the fees as opposed to their companies paying corporation tax) determination from 6 April 2021.

Note that these changes only apply to payments for services that have been provided to you by freelancersPeople, in business for themselves, who provide services to others. They may be individuals simply working under their own names, or may offer services through companies or partnerships. Sometimes known as consultants or independent contractors. on or after 6 April 2021.

To determine whether the off-payroll working rules apply, you or your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. will need to assess whether the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. is working for you as if they were your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. (see Q&A 45 for guidance about whose responsibility it is to make the assessment). Employment status for tax purposes is determined by the terms and conditions of your agreement as well as the actual working practice between you and the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor..

Whether or not a freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. will be considered to be 'employed' for tax purposes will be very much fact specific and you should seek advice from a lawyer or accountant if you are unsure. Tax guidance is outside the scope of this service; for access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.

HMRCHis Majesty’s Revenue and Customs. The government authority which oversees tax and customs. has created a useful tool to help you work out the position based on your individual arrangement. Although it is not compulsory to use this tool, HMRCHis Majesty’s Revenue and Customs. The government authority which oversees tax and customs. has committed to standing by the result you get when you complete the questionnaire, provided that all of the information you provide is accurate and complete. If you do use it, it is therefore recommended that you download or print a copy of your result for your records.

As an indication, relevant factors will include:

1. how much control you have over how, where and when the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. works for you. If you are able to exercise control in these ways (even if you do not do so in practice), it is more likely that the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. could be your employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. for tax purposes. For example, consider whether you provide the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. with detailed instructions on how they should perform the services for you;

2. whether you require the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. to perform the services personally. A freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. should typically be free to subcontract the work to someone else or provide a substitute for themselves;

3. whether the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. provides their own equipment; and

4. how much financial risk the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. takes on.

Note that none of these considerations alone will indicate whether a freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. is employed by you for tax purposes, and you should look at the entirety of the relationship when making your determination. Equally, a determination will need to be made for each different arrangement that you enter into (whether or not with the same freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor.), and must be reconsidered if there is a change in the terms of the arrangement. Note that HMRCHis Majesty’s Revenue and Customs. The government authority which oversees tax and customs. has confirmed that businesses will not be charged penalties for inaccuracies in the first 12 months after the rules changed (from 6 April 2021) unless deliberate non-compliance is identified.

Tax guidance is outside the scope of this service. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.

If your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. provides their services to your business through a limited companyA public or private company whose owners are responsible for its losses only to the extent of the amount of money they invested., until 6 April 2021 it was their responsibility (through their companyA private company limited by shares incorporated and registered in England and Wales. ) to work out whether the IR35(Also known as off-payroll working rules) HMRC rules which are designed to ensure that individuals engaged to work for a client through an intermediary, most commonly through personal service companies (PSCs), but who actually work like employees of that client, are taxed in the same way as employees or workers would be (ie they pay income tax and national insurance on the fees as opposed to their companies paying corporation tax) tax rules (aka off-payroll working rules) applied to the arrangement.

From 6 April 2021, it is your responsibility as the client to work out whether the rules apply (and to pay the income taxTax deductible on an individual's income. Not all income is taxable, as individuals have an annual personal allowance which is the amount they are allowed to earn before they are eligible to be taxed, and they may also benefit from other allowances and relief. The amount left is referred to as taxable income. and national insuranceCompulsory payments which must be made by both employers and workers for the worker to qualify for certain benefits, like state pensions. on the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor.'s behalf) if your business is 'medium or large'. You will not have this responsibility if you operate a small business. A small business is one which satisfies two or more of the following requirements:

1. a turnoverThe amount of money taken by a business, before deductions (eg expenses, tax etc). of £10.2 million or less;

2. no more than 50 employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work.; and

3. a balance sheetAn accounting document that states the assets and liabilities of a company, or of a group of companies, as at a particular date (also known as a statement of financial position). of no more than £5.1 million.

Note that if your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. is unsure about the size of your organisation, they have the right to request information about this from you and you must respond to such requests.

If you are a medium or large business then once you have made your determination, you must provide a determination statement to the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor.; see Q&A 46.

Bear in mind that if you are responsible for determining whether the IR35(Also known as off-payroll working rules) HMRC rules which are designed to ensure that individuals engaged to work for a client through an intermediary, most commonly through personal service companies (PSCs), but who actually work like employees of that client, are taxed in the same way as employees or workers would be (ie they pay income tax and national insurance on the fees as opposed to their companies paying corporation tax) rules apply, you must take reasonable careThe degree of caution that an ordinary person would use in the circumstances. when making your determinations and it will generally not be appropriate for you to make blanket decisions to a group of freelancersPeople, in business for themselves, who provide services to others. They may be individuals simply working under their own names, or may offer services through companies or partnerships. Sometimes known as consultants or independent contractors. . See Q&A 43 for information about how to work out whether the rules apply. Note that HMRCHis Majesty’s Revenue and Customs. The government authority which oversees tax and customs. has confirmed that businesses will not be charged penalties for inaccuracies in the first 12 months after the rules changed (from 6 April 2021) unless deliberate non-compliance is identified.

From 6 April 2021, if your business is responsible for determining whether the IR35(Also known as off-payroll working rules) HMRC rules which are designed to ensure that individuals engaged to work for a client through an intermediary, most commonly through personal service companies (PSCs), but who actually work like employees of that client, are taxed in the same way as employees or workers would be (ie they pay income tax and national insurance on the fees as opposed to their companies paying corporation tax) tax rules apply to your arrangement with a freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. (see Q&A 45 for more information about when this will be the case), you will need to provide your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. with an employment status determination on or before the date that your contract with them is entered into. This should include your reasons for that determination. HMRCHis Majesty’s Revenue and Customs. The government authority which oversees tax and customs. has created a useful tool to help you work out the position based on your individual arrangement.

Note that whatever your determination ultimately is, you will hold all liability for tax and National Insurance contributionsCompulsory payments which must be made by both employers and workers for the worker to qualify for certain benefits, like state pensions. on behalf of the freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. until you have provided them with your determination statement.

From 6 April 2021, if your freelancerA person, in business for himself, who provides services to others. He may be an individual simply working under his own name, or may offer services through a company or partnership. Sometimes known as a consultant or independent contractor. disagrees with your determination, they may write to you setting out their reasons. You have 45 days from the date you receive their disagreement to respond to let them know whether you have changed your determination or not.

This means that if you reach the thresholds set out in Q&A 45, you must ensure that you have a process in place from 6 April 2021 to enable your freelancersPeople, in business for themselves, who provide services to others. They may be individuals simply working under their own names, or may offer services through companies or partnerships. Sometimes known as consultants or independent contractors. to dispute your determinations.

You must give your casual workerA person hired to work on an as required basis, sometimes known as a seasonal worker. a written statement of certain terms of employment on or before their first day of work.

The law only requires basic information to be given. It does not require all the terms and conditions between you and your casual workerA person hired to work on an as required basis, sometimes known as a seasonal worker. to be written down (although in reality, this is best practice).

Our template Contract - casual worker contains all of the information you are required to provide as well as additional terms and conditions it is sensible to include.

The following are the minimum particulars that you must give in writing to your casual workerA person hired to work on an as required basis, sometimes known as a seasonal worker.:

1. the names of the employerA person or business hiring one or more staff members. and workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. ;

2. the date the engagement starts;

3. how much the workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. will be paid, or how their pay will be calculated, how regularly they will be paid (eg weekly or monthly);

4. hours of work, including what their normal working hours will be, days of the week and whether these hours or days vary (and if so, how);

5. holiday entitlement and holiday payPayment made by an employer to a worker during the worker's holiday time off work. (including their public holiday entitlement);

6. the workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. 's job title or a brief description of the work;

7. place of work (if the workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. will work in various places, this must to be stated along with the employerA person or business hiring one or more staff members.’s address);

8. terms about absence due to incapacity and sick payPayment made by an employer to a staff member during the staff member's time off work due to illness or disability. (you can refer the workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. to other documents for these details if it is easier eg your staff handbookA staff handbook is a manual provided to employees by an employer which usually contains information about company policies and procedures. or absence policy document);

9. details about any other paid leave the workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. is entitled to (besides sickness and holiday payPayment made by an employer to a worker during the worker's holiday time off work.) (you can refer the workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. to other documents for these details if it is easier eg your staff handbookA staff handbook is a manual provided to employees by an employer which usually contains information about company policies and procedures.);

10. the notice period(1) The length of time in advance which a notice must be given before it can take effect (2) The requirement to inform employees that they are being dismissed a certain amount of time in advance of their last day of employment. that the workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. must give to end their employment and the notice that you must give them if you want to do so (you can simply say that your notice periods are those required by law if you are happy to adopt the legal minimums);

11. terms as to pensions and pension schemes (you can refer the workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. to other documents for these details if it is easier and this information can be provided within two months of your workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. 's start date, rather than immediately);

12. terms relating to whether the workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. may be required to work outside the UKUnited Kingdom of Great Britain and Northern Ireland for a period of more than one month, including how long it will be for, and additional benefits they will receive in compensation for working abroad, the currency in which they will be paid and any terms dealing with their return to the UKUnited Kingdom of Great Britain and Northern Ireland;

13. if the contract is temporary, how long it is expected to last and when it will end;

14. information about disciplinary and grievanceA concern, problem or complaint which a member of staff raises with his employer. procedures or where these can be found, saying who they can appeal to if they want to appeal a disciplinary decision and who they can raise a grievanceA concern, problem or complaint which a member of staff raises with his employer. with. Note that this information can be provided within two months of your workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. 's start date rather than immediately. You should be cautious about subjecting your casual workersPeople hired to work on an as required basis, sometimes known as seasonal workers. to your formal disciplinary and grievancesConcerns, problems or complaints raised by a member of staff with his employer. procedures (which will typically be contained in a staff handbookA staff handbook is a manual provided to employees by an employer which usually contains information about company policies and procedures.) and only do so to the extent that it is appropriate for you to do so, as this can lead to an implication that they are your employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. rather than casual workersPeople hired to work on an as required basis, sometimes known as seasonal workers.. Consider instead including basic information in their contract, reserving the right to apply your formal procedures where appropriate;

15. details of any collective agreements Agreements that are negotiated with a trade union or other employee representative that affects the terms of the employees' contracts. with trade unions directly affecting the employment eg an agreement reached by trade union representatives for a pay increase (you can refer the workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. to other documents for these details if it is easier and this information can be provided within two months of their start date rather than immediately);

16. details of any other benefits not specifically mentioned above;

17. information about any probationary periodA period of time during the beginning of an employment relationship where new hires can usually be dismissed with less notice., including any conditions attached to it and how long it lasts; and

18. details of any training entitlement, including whether it is mandatory and whether you will pay for it. Note that you are permitted to provide details about any non-mandatory training in a separate document if this is easier and that information can be provided within two months of your workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. 's start date, rather than immediately.

Note that, if you do not have any terms to set out on any of these subjects (apart from in relation to your disciplinary and grievanceA concern, problem or complaint which a member of staff raises with his employer. procedures), you must state that there are none rather than omitting any mention.

You must make sure that the contract does not discriminate To treat someone differently directly or indirectly becasue of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation.against your casual workersPeople hired to work on an as required basis, sometimes known as seasonal workers. either individually, or collectively as a group, based on age, disabilityA physical or mental impairment which has a substantial or long-term effect on a person’s ability to carry out normal day to day activities., gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex or sexual orientation.

For example, if you decide to pay younger casual workersPeople hired to work on an as required basis, sometimes known as seasonal workers. less than older casual workersPeople hired to work on an as required basis, sometimes known as seasonal workers. where they are in comparable positions simply because of their age, this will amount to discriminationTreating someone differently directly or indirectly because of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation..

Be careful not to discriminate To treat someone differently directly or indirectly becasue of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation.indirectly by offering different terms to different groups of casual workersPeople hired to work on an as required basis, sometimes known as seasonal workers. that disadvantage one group more than another. For example, if you have working hours that are particularly difficult for single parents to comply with, these are likely to be discriminatory against women, who form the large majority of single parents. There is a limited legal exception which permits you to discriminate To treat someone differently directly or indirectly becasue of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation.indirectly if you can justify it as an appropriate and necessary way of achieving a genuine aimAlternative Investment Market, a sub-market on the London Stock Exchange for growing companies. For example, a contractual requirement to regularly work a full day on a Saturday rota could be discriminatory against those for whom Saturday is the sabbath. It may be justified if it is your main trading day and Saturday working is unpopular with your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. generally, such that any exception would create tension among them.

If your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. are zero-hours workersStaff members who have an obligation to do their work personally for someone who is not their client or customer. (ie you do not guarantee(1) In the context of debt, a contract where someone agrees to pay if the debtor cannot pay themselves. (2) In the context of sale of goods, a promise to a customer which is given freely (without charging extra money) that the goods they are buying will meet certain standards, and if they do not the person making the promise will do something to make up for that (eg give a refund, or repair or replace the goods). they will be offered any work by you), or low-paid workersStaff members who have an obligation to do their work personally for someone who is not their client or customer. (net average wages of £125 per week or less), you cannot legally ban them from working for other businesses as well as yours. It may be tempting to insist that your casual workersPeople hired to work on an as required basis, sometimes known as seasonal workers. can only work for you, especially if they sometimes refuse your offers of work because they are engaged by another business. However, you cannot legally enforce any provision in your contracts that requires your casual workersPeople hired to work on an as required basis, sometimes known as seasonal workers. to only work for you, or even to seek your approval before working elsewhere.

Beware that if you do treat a zero-hours or low-paid workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. differently because they have undertaken work for others by not offering them any further work, they can bring a claim against you in the Employment TribunalA tribunal that deals solely with employment disputes.. The Tribunal can award them compensation if the claim is proved.

If you require your casual workersPeople hired to work on an as required basis, sometimes known as seasonal workers. to accept any work you offer them, they are highly likely to have the legal status of employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. rather than casual workersPeople hired to work on an as required basis, sometimes known as seasonal workers., with all the enhanced rights against you that it entails. Note that it does not matter if your contract refers to the person as a casual workerA person hired to work on an as required basis, sometimes known as a seasonal worker.. It is the substance of the arrangement between you that matters.

For example, employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. have rights to minimum notice periods before dismissal and can bring a claim against you in the Employment TribunalA tribunal that deals solely with employment disputes. if you dismiss them unfairly.

If the internA person who works (in which case he must usually be paid) or work shadows (usually without pay) for a fixed period of time, to gain work experience or as part of a qualification. will be unpaid (or paid expenses only) because they will simply be shadowing your staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. members and will not be expected to produce any work, they will be engaged in a similar way to if they were a volunteer. This means that there will not be any formal agreement between you and neither you nor the internA person who works (in which case he must usually be paid) or work shadows (usually without pay) for a fixed period of time, to gain work experience or as part of a qualification. will have a legal obligation to provide, or do, any work. For example, they could choose not to turn up to the internship or you could end it at any time.

Nonetheless, it is best to make clear what the position is with a letter so there is no confusion. This will reduce any risk of the internA person who works (in which case he must usually be paid) or work shadows (usually without pay) for a fixed period of time, to gain work experience or as part of a qualification. trying to claim that they are a workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. or employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. (and so entitled to the rights that they enjoy eg the national minimum wageThe minimum hourly wage that employers must pay their staff. Staff who are aged 21 and over must be paid the National living wage. or the national living wageThe minimum hourly wage that employers must pay their staff who are aged 21 and over. Staff who are aged under 23 must be paid the National minimum wage.). You can use the template Unpaid Internship Letter to confirm the nature of the internship and give a suitable warning about any confidential information that your internA person who works (in which case he must usually be paid) or work shadows (usually without pay) for a fixed period of time, to gain work experience or as part of a qualification. might come across.

Generally yes; the type of contract depends on the nature of the arrangement:

1. If the internA person who works (in which case he must usually be paid) or work shadows (usually without pay) for a fixed period of time, to gain work experience or as part of a qualification. is expected to carry out work which a paid member of staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. might do and you will control where and when the internA person who works (in which case he must usually be paid) or work shadows (usually without pay) for a fixed period of time, to gain work experience or as part of a qualification. will work, what they will do and will otherwise treat them as you would any other employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work., you should offer them a contract of employmentA contract between employer and employee which sets out the rights and responsibilities of both..

   For full guidance on what you must include in employment contracts see Q&A 3 and following. For a contract which you can use in this situation see Employment contract. This includes suitable wording to make clear when the internship will end; this is important because if you don't have it, the internA person who works (in which case he must usually be paid) or work shadows (usually without pay) for a fixed period of time, to gain work experience or as part of a qualification. could say they did not know their contract was temporary and could raise allegations that you have treated them unfairly by ending it.

2. If you do not know how much work the internA person who works (in which case he must usually be paid) or work shadows (usually without pay) for a fixed period of time, to gain work experience or as part of a qualification. will be required to do, and you will only need them to work on an as required basis, a casual workerA person hired to work on an as required basis, sometimes known as a seasonal worker.'s contract may be more appropriate (see Q&A 48 for further information on what to include in a casual workerA person hired to work on an as required basis, sometimes known as a seasonal worker.'s contract and Contract - casual worker for a template contract which you can use).

There may be warranties Promises or assurances in a contract.and indemnities Agreements where one party agrees to compensate another on the occurrence of a specified event.that the agency gives to you as well as those which you are required to give to the agency.

1. Warranties Promises or assurances in a contract.and indemnities Agreements where one party agrees to compensate another on the occurrence of a specified event.the agency gives

   As the agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. 's contract will be with the agency and not you, check to make sure that the agency warrants (or promises) not only that it will pay the agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. and deduct any tax or national insuranceCompulsory payments which must be made by both employers and workers for the worker to qualify for certain benefits, like state pensions. from their pay but that it will indemnifyTo agree that one party will compensate another on the occurrence of a specified event. you against these costs if the agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. or HMRCHis Majesty’s Revenue and Customs. The government authority which oversees tax and customs. try to claim these from you later.

2. Warranties Promises or assurances in a contract.and indemnities Agreements where one party agrees to compensate another on the occurrence of a specified event.that you give

   You must also make sure you are comfortable with any warranties Promises or assurances in a contract.or indemnities Agreements where one party agrees to compensate another on the occurrence of a specified event.that you are being asked to give. For example, because there are certain rights you must provide to the agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. which the agency cannot control (eg access to your facilities), the contract may state that you will indemnifyTo agree that one party will compensate another on the occurrence of a specified event. the agency for any loss caused if you do not comply with your obligations (for full guidance on the rights agency workersStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. have that you are responsible for, see Agency workers).

   You must ensure you are only giving warranties Promises or assurances in a contract.for things that are within your control and, ideally, place a limit on the amount that you indemnifyingAgreeing that one party will compensate another on the occurrence of a specified event. the agency. This will be a matter for you to negotiate with the agency. You should also check if these risks are (or can be) covered by your business' insurance policy.

After they have worked for your business for 12 continuous weeks in the same role, an agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. will be entitled to certain equal rights (eg pay, working hours, annual leavePaid time off work to which members of staff are entitled each year, also known as holiday leave. etc) when compared to your employeesIndividuals hired personally to work under contracts of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. or casual workersPeople hired to work on an as required basis, sometimes known as seasonal workers. who are doing the same or similar work at the same location as them (or if there are no comparable staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. at that location, then those at another location). The agency is usually responsible for ensuring these rights are met, and will normally have a clauseA provision or section. Usually in a contract. in the contract requiring you to provide them with information about any comparable staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. working for you so that they can do so.

If you fail to provide any requested information, you can be held responsible if your agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. is treated unequally as a result.

Your business can be liable for discriminationTreating someone differently directly or indirectly because of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation. by the temporary work agency, if the agency was acting with your authority by engaging staffAnybody who works for a business, whether as an employee, casual worker, apprentice, agency worker or freelancer. for you. It does not matter whether you knew or approved of exactly what the agency was doing. For example, this could happen if the agency only puts forward white candidates to fill your role, despite having suitably qualified black candidates. You can avoid this by ensuring that the contract makes it clear that the agency must not unlawfully discriminate To treat someone differently directly or indirectly becasue of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation.against agency staffStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. and that it must comply with a suitable equal opportunities policy either yours or their own if they have one. If the agency does discriminate To treat someone differently directly or indirectly becasue of their age, disability, gender reassignment, marriage or civil partnership status, being pregnant and/or being on maternity leave, race, religion or belief, sex or sexual orientation.unlawfully it would not be doing so with your authority and you avoid liability to the wronged workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. .

Your contract with a temp agency will often say that you will have to pay the agency a fee if you want to take a temporary agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. on directly or introduce them to another companyA private company limited by shares incorporated and registered in England and Wales. (known as transfer fees). These fees can be very costly and will typically be charged at about 15% of the agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. ’s gross annual pay. There is no limit on how much the fee can be.

However, there are very limited circumstances in which an agency can legally charge a transfer fee, in the following situations:

1. if you take on an agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. as an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. or hire the same agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. again but through a different agency (see Q&A 61);

2. if you hire a workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. the agency introduced you to, but who never worked for you (see Q&A 62); or

3. if you introduce the workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. to another business which then hires them (see Q&A 63).

Yes, but only if:

1. your contract with the agency has an option for you to extend the agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. 's assignment for a longer hire period; and

2. you do not take that option, instead taking the agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. on as an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. or through another agency; and

3. it happens within 8 weeks after their last assignment with you ended or within 14 weeks after their first assignment started (whichever is later).

Note that if there has been a break of more than 42 days between assignments worked for you, the clock resets and the later assignment is considered to be the first for the purposes of counting the 14 week period.

For example, an agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. starts work for you on 1 January and finishes on 1 February. You want to offer them permanent employment. The agency's terms say you have to pay a transfer fee unless you extend the period of hire by another four weeks. You have three options. You can take them on now and pay the transfer fee, keep hiring them through the agency for four more weeks and then take them on without having to pay the fee, or stop hiring them now and take them on from 9 April (14 weeks after they started with you) without having to pay the fee.

The agency can potentially charge a fee if the agency offers a workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. to you who either never works for your business (eg the agency sends you the workerA staff member who has an obligation to do their work personally for someone who is not their client or customer. ’s CV but you choose not to accept them) or who does not work for your business for the whole of the hire period in the contract, but who you then hire as an employeeAn individual hired personally to work under a contract of employment, usually in exchange for payment. Employees are normally fully integrated into the business and the employer exercises a large degree of control over their work. or rehire through another agency. The agency can only charge you a fee in these circumstances if it was not their fault that the agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. either did not go to work for you or did not complete the contract.

The agency can only charge you a fee if the agency workerStaff supplied by a recruitment agency to work for a business under a contract made between the agency and the business. starts working for the third-party companyA private company limited by shares incorporated and registered in England and Wales. within 8 weeks of when they last worked for you or within 14 weeks from the first day that they started working for you under your agency agreement (whichever is later). Note that if there has been a break of more than 42 days between assignments worked for you, the clock resets and the later assignment is considered to be the first for the purposes of counting the 14 week period.