Employment Contract – Legal Advice
Why is employment contract legal advice important? The answer is that in the current climate, commercial organisations have a need for clearly defined relationships with employees. Not having properly drafted contracts can lead to uncertainty, and uncertainty is a precursor to disputes, which can be expensive.
Mary Monson Solicitors have advised many types and sizes of company on the types of document appropriate for their business. Our business solicitors have experience advising clients in the manufacturing, tech, and professional services industries among others.
We provide fixed fee packages to get start up businesses up to speed with their employment responsibilities, and can assist with larger businesses at competitive rates. For more information on the main issues which arise in an employment contract, see our free basic guide below.
What is the purpose of an employment contract?
An employment contract is an agreement between a business and their employee setting out the terms of that relationship such as rates of pay, hours of work.
As with other agreements, a contract of employment does not need to be in writing for it to be binding, but it goes without saying that if all of the terms are contained in a written legal document this is better for both sides. It provides certainty and helps to prevent disputes.
An employment tribunal claim by an employee can cost the business both in terms of cost and time. A well drafted document will set out the rights, duties and obligations of the employer and employee although some of these (such as minimum notice periods) will be implied and need not necessarily be written down to apply.
What should the contract contain?
Some important clauses to put in an employment contract from the perspective of an employer include the following:
- Ability to put an employee on garden leave after being given notice;
- Allow the employer to make payment in lieu of a notice period;
- Impose restrictions on outgoing employees to protect the business from losing customers and/or other employees;
- Deal with ownership of intellectual property created during the course of employment; and
- Bind the employee to keep certain information confidential
Even if a business chooses not to have a formal written contract, most employees are entitled by law to a written statement of the main terms and conditions of employment within 2 months of starting work. If a business needs to vary an employment contract it can only be done if the employee consents.
A business should also consider the drafting of policies and procedures and employee handbooks which detail other issues which affect the employment relationship that it would not be appropriate to include in the contract itself. These can deal with maternity/paternity leave, internet use etc.
This is an essential document for any business and it should be professionally drafted and adapted to the individual business. This will give the employer maximum protection and ensure that all employees know their rights and what is expected of them. If you ever want to sell the business a potential buyer will expect employee contracts to be in place.