EMPLOYER’S GUIDE | Contracts of Employment

In order to save some money, employers may be tempted to download a free contract of employment or attempt to draft one themselves by copying and pasting from contracts they find online. 

This rarely needs well. By cutting the corners, you are exposing yourself to significant risk. In your contracts, you may be making important omissions and you may not be complying with the law. What is also commonly found is that through sloppy drafting, employers are not protecting their own business interests.

You don’t want to see the inside of an Employment Tribunal; therefore the best course action is to seek professional help.

Getting your contracts rights

Whatever contract you are drawing up, it is advisable to get it drafted by a legally qualified HR and Employment Law expert. They can help you ensure that each person is on the right contract and you understand your legal obligations.

Although the most common form of contract is indefinite contracts, there are a number of contracts at the employers’ disposal:

Fixed term contracts

This is a contract that ends on a specified date or when a particular event or task is completed.

Benefits: Fixed-term contracts can be very useful to cover a period of maternity leave or long-term sickleave; to do a job where funding has been provided to undertake a specific task or to do some seasonal work.

Risk: Many employers fail to realise that the non-renewal of a fixed-term contract is actually considered a dismissal so the employee may be able to make a claim for unfair dismissal. Find out how to terminate a fixed-term contract here.

Zero hours contracts

A zero-hours contract is a contract between an employer and an individual whereby the worker has no guaranteed hours and is only paid for the work they actually carry out.

Benefits: It allows employers respond quickly and effectively to any fluctuation in business demands including:

• to deal with an unforeseen event
• to cover a particular event
• to cope with absences
• in the build up to a busy period
• when you have limited or variable funding

Risk: Employers often find it hard to calculate holiday pay and annual leave accrual. It can be difficult for employer to know whether the employment relationship continues between engagements and what the individual’s employment status is. Getting this wrong can lead to all sorts of claims.

Agency workers

Well-liked by employers, there are fewer obligations than when employing permanent employees.

Benefits: Agency workers are useful as they can:

• provide cover when an employee is sick or has an unforeseen or emergency matters
• help a business respond to a seasonal rush or a sudden increase in demand
• cover a position until you recruit someone on a permanent basis

Risk:  You still have certain duties towards agency workers, such as providing them with a safe working environment and notifying the agency of your company’s terms and conditions to ensure that the agency worker gets equal treatment after the 12 week qualifying period.

Apprentices

There are different types of apprenticeship agreements. There are apprentices on a Framework Apprenticeship and those on the new Approved English Apprenticeship. Plus, there are Modern Apprenticeships.

Benefits: As apprentices learn their craft on the job, they understand how your business works, can be moulded to fit your unique style of working and become a great investment for your organisation.

For some sectors, for example, hairdressing, it is probable that many long-serving members of staff have started at the bottom and worked their way up to senior positions.

Risks: When employing apprentices, there are a number of things that need to be included in the contract otherwise the apprentice may end up with enhanced protections. Always seek advice when taking on apprentices to ensure that the contract you are using complies with the relevant law and you do not face any nasty surprises if you wish to dismiss them.

Seek advice

When in doubt, seek advice at the earliest opportunity. Our Employment Law Advisers can provide you with the guidance and support you need to ensure legal compliance.