What is a contract of employment?

In the simplest terms, a contract of employment confirms that an employee agrees to work for an employer in return for wages. The terms of the contract can be written, oral, implied or a combination of all three, and is made when the offer of employment is accepted.

Does an employment contract need to be in writing?

An employment contract can be a verbal agreement between two parties (the employee and the employer), however the employer must under The Employment Rights Act 1996 provide the employee with a written statement with the terms of the contract.

The following details should be included in the written statement:

Name of employer and employee

The contract of employment should include the employer’s organisation and the employee’s full name and address.

 Employment contract start date

This section would normally state that employment with a previous employer does not count towards the various rights that are gained by employees after one or two years of service. Exceptions to this are where an employer has taken over an organisation with existing employees.

Place of Work

In the contract of employment, the employer will specify the location where the employee will work. However the employer can specify one or more locations for the employer which gives the organisation more flexibility.

Hours of Work

The maximum amount of hours an employer can work must not exceed 48 hours per week as stated by the Working Time Regulations. The employee’s hours are specified within the contract, however the employee can also agree to work additional hours if the employer reasonably requests it.

Salary

The contract of employment will state the intervals at which the employee will be paid along with the gross salary before national insurance and tax.

Holiday entitlement

This section allows the employer to specify when the holiday year begins and ends, how many days (statutory minimum 20 days) the employee is entitled to take per year, and whether public and bank holidays are included or excluded from this. This section also states whether the employee can roll-over unused holidays in to the next year.

Sick entitlement

This section states by what time the employee must inform the employer that they will be unable to attend work. This section also states when the employee will need to provide a doctor's certificate and whether the employee will receive statutory or contractual sick pay.

Further information on contracts of employment can be found online