Contract of employment – what should you include?

Oct 8, 2018 | Terms and Conditions

As a minimum legal requirement you must issue employees with a written ‘statement of particulars’ containing information about some of the main terms of employment as follows:

  • name and employer’s name
  • job title or a brief job description
  • date when your employment began
  • pay rate and when payment is made
  • hours of work
  • holiday entitlement
  • location
  • sick pay arrangements
  • notice periods
  • disciplinary and grievance procedures
  • any collective agreements (terms and conditions negotiated with a union)
  • pensions and pension schemes
  • end date for temps and fixed term contracts

Technically you can meet your legal requirements by putting the information specified above down on a bit of paper yourself, or by using a free template you could download from somewhere on the internet. But most businesses benefit from including more than that.

Protecting your business

The minimum legal requirement is to give information about certain aspects of employment. But that requirement is set for the benefit of employees – because they are entitled to that information. There is no minimum set by law aimed at protecting the employer. So there might be a dozen things you want to make clear in your employees’ contracts which will give your business protection in various areas, rather than just giving them the information they are entitled to.

Custom and practice terms

If you have only the pieces of information required by law set down in writing, what happens in a dispute about the other terms? Your contract with your employee will extend far beyond the basic written statement, and established terms and conditions will evolve out of what’s known as ‘custom and practice’. Those terms and conditions might not evolve exactly how you want them to and will be very much open to dispute and confusion.

Driving behaviour

It’s not just dispute avoidance and resolution – including a bit more than the basics can also help drive the behaviour you want from your staff. They will have clarity about what is expected of them, what they can expect from you. As with performance management, clarity of expectations on both sides is half the battle.

No “one size fits all”

Every business is different and the culture, the sector, the kind of employees there are, the kind of jobs they do, the management style of the owner, likely previous employers of new recruits, client culture and expectations are just some of the things that impact on what terms would suit you best and in what language they need to be drafted. All small businesses are not the same!

Having said that some of the most common things we’ve found small business owners really wish they’d had in their original contract are:

  • Probationary period
  • Right to vary terms and conditions. It’s not foolproof, it doesn’t allow you to change whatever you like but it certainly makes things a lot easier
  • Right to make deductions from pay in certain situations
  • Right to vary hours of work and location
  • Right to terminate immediately and pay in lieu of notice
  • A suitable confidentiality clause
  • Some restrictions on departing employees with regards to clients
  • Something on Health and Safety

A good HR consultant or employment lawyer will be able to advise from experience which terms and conditions it would benefit your business most to include.

What you don’t need

As a small employer you probably (although not necessarily) want to keep things reasonably informal, and need something that meets your requirements without comprising the ‘feel’ and culture of your business. You don’t need anything lengthy, or anything that feels over-restrictive or heavy-handed.


If you would like assistance preparing contracts for your business, do get in touch.