Employment contracts are crucial for any employer as they establish clear terms within the employment relationship. Beyond fulfilling legal obligations, they are vital documents which delineate the rights and responsibilities of both the employer and employee. In this blog, we delve into the importance of employment contracts, outline key components to include and set out how you can generate a customised contract using our employment contract template here.
Employment contracts serve several purposes. They provide employees with the essential terms of their employment as well as protecting the interests of both the employee and employer. By formalising employment agreements in writing, the risk of misunderstanding or disputes is significantly reduced.
Legal obligations and necessary terms
Legally, employers are required to provide employees and casual workers with written terms of employment, including key aspects such as:
- Pay
- Working hours
- Holiday entitlement and holiday pay
- Notice periods
- Absence and sick pay
- Any probationary terms
Failure to adhere to these requirements can expose employers to legal repercussions, including potential Employment Tribunal claims, which can be both costly and time-consuming. For further information, see our Q&A.
Our employment contract template not only covers the basic legal requirements but also includes additional terms that safeguard your business. Such terms may include confidentiality clauses, non-compete agreements and IP rights.
Key components of an employment contract template
Creating a robust employment contract involves tailoring the agreement to the specific needs and circumstances of the individual employee. For example, contracts for junior employees will differ from those for senior or business-critical roles. Similarly, employment contracts for temporary employees (whether junior or senior) may require unique considerations. Our employment contract template includes options for you to choose which type of employee you are hiring, and therefore include the appropriate terms.
While employment contracts between staff members may differ, they must not discriminate on the basis of a protected characteristic. Furthermore, employment contracts must not discriminate against temporary or part-time employees.
Changing an employment contract
It is possible to change your staff members’ employment contracts, depending on the circumstances. It is very easy to do if the staff member agrees. If the change is something the staff member may not agree to, it is important that you follow the correct procedure. For more guidance, see our Q&A.
There are some restrictions on changing contracts. For example, if a staff member has been TUPE-transferred to your business, there are significant restrictions on your ability to change the terms of their employment. Employees also have some basic rights that cannot be changed, even if they expressly agree (see our Q&A for more guidance).
Other rules may apply in relation to changing your policies in staff handbooks; see our Q&A for more guidance.
Generate a customised employment contract
Our Employment contract template provides a convenient solution for generating customised contracts tailored to your business requirements. It includes all of the details required by law as well as additional clauses designed to protect your business interests and ensure clarity in the employment relationship.
Our employment contract template is designed to be used alongside our Staff handbook and policies template, which contains comprehensive details of various policies that employers are legally required to provide to their employees. These include disciplinary and grievance procedures, health and safety policy, and data protection and privacy information. The Staff handbook and policies template also allows you to create other HR policies that might be suitable for your business, such as:
- Family-friendly policies
- Policies about staff behaviour, including in relation to bullying and harassment, social media and smoking, drugs and alcohol
- Policies about flexi-working, including working from home
- Policies relating to anti-bribery compliance and whistleblowing
For individuals assuming directorial roles within your company, we offer a specialised Service agreement for a director template. Additionally, for casual workers, our Contract – casual worker template offers tailored provisions to accommodate their unique employment arrangements.
Creating an employment contract is an essential step for any employer to establish clear terms of employment and to protect their business interests. Our customisable Employment contract template simplifies this process, ensuring compliance with legal requirements while accommodating the particular needs of your business.
The content in this article is up to date at the date of publishing. The information provided is intended only for information purposes, and is not for the purpose of providing legal advice. Sparqa Legal’s Terms of Use apply.
Marion joined Sparqa Legal as a Senior Legal Editor in 2018. She previously worked as a corporate/commercial lawyer for five years at one of New Zealand’s leading law firms, Kensington Swan (now Dentons Kensington Swan), and as an in-house legal consultant for a UK tech company. Marion regularly writes for Sparqa’s blog, contributing across its commercial, IP and health and safety law content.