Contracts of Employment – are they required?
The employment contract forms a fundamental relationship between the employer and the employee. Whilst an employment contract can be agreed orally or in writing, it is advisable for a written contract to be put in place; this will help provide clarity in the event of a dispute.
Whilst there is no legal requirement for an employee to have a written contract of employment, section 1 of the Employment Rights Act 1996 (ERA 1996) requires an employee to be given a written statement of certain specified particulars. For employment commencing prior to 6 April 2020, the statement of particulars must have been provided within 2 months of employment. For employment commencing on or after 6 April 2020, the particulars must be provided on or before the first date of employment.
A Section 1 statement is not a contract of employment although, in absence of a written employment contract, weight will be given to the statement to determine the likely terms of employment. Employers should therefore be mindful of the requirement to provide a written statement of particulars, whether or not they intend to enter into a formal employment contract.
What should be covered by the written statement of particulars?
Since the change in law in April 2020, the extent of information which must now be covered in the written particulars has been extended. The following information must be provided:
- Names of the employee and employer;
- The start date and reference to any continuous employment;
- Job title and a brief description of work;
- Details of the scale or rate of pay or method of calculation, including the intervals at which the employee will be paid;
- The terms and conditions relating to hours of work, to include which days of the week are to be worked and whether the days and hours are variable;
- If the days and hours are variable, details as to how they can be varied;
- The terms and conditions relating to holiday entitlement, to include details of holiday pay and bank holidays;
- Details in relation to sick pay and any other paid leave;
- Details on pension provisions and any other benefits;
- The length of notice which the employee is obliged to give and is entitled to receive to terminate the contract of employment;
- If the role is a fixed contract, a date on which the contract will end;
- The place of work or, where the employee is required to work at various places, an indication of this together with the address of the employer;
- Where the employee is required to work abroad, details surrounding this if the period exceeds one month; and
- Details of any probationary period, including any specific conditions and its duration;
In addition, employers must give employees a wider written statement within 2 months of the start of employment. This must include additional information regarding:
- Pensions and pension schemes;
- Details of any collective agreements;
- Any right to non-compulsory training provided by the employer; and
- Disciplinary and grievance procedures.
Failure to provide particulars
Employers must ensure that a written statement of particulars are provided on or before the first day of employment. Failure to provide written particulars, or failure to provide them within the given timeframe, can result in the tribunal making a declaration as to the particulars that ought to have been given. Under Section 38 of the Employment Rights Act 2002, an employee could also be entitled to an award of compensation between two and four weeks’ pay; however, this right only applies if the employee has successfully brought another substantive action.