My employees do not have contracts of employment. Is this a problem?
Every employee has a contract of employment. If there is nothing in writing, however, that contract is just a verbal one. Omitting to have written contracts in place leaves you vulnerable. If, for example, an Unfair Dismissal claim is brought against you, the employee will be entitled to 2 – 4 weeks’ wages for your failure to provide mandatory particulars of employment as required by employment legislation, in addition to any compensation for their main claim. Without anything in writing, the scope for disputes concerning the terms of the contract is considerable.
You should consider the following:
1) Identify what the basic terms of your employees’ contracts of employment are eg. job title/description, wage, annual leave entitlement.
2) Make sure you cover all of the mandatory particulars that you are required to provide to employees under the Employment Rights Act 1996.
3) Consider additional provisions such as deductions from wages; garden leave provisions; restraints of trade – non-competition, non-solicitation and non-poaching of employees; confidentiality; reimbursement of training fees and so on. You should consider such clauses with a view to protecting your business.
4) Consider any business-wide policies to be put in place. Disciplinary and Grievance Policies are essential. An Equal Opportunities Policy including a section on Sexual Harassment is also advisable.
We can advise on and prepare written contracts of employment. Having written contracts in place now may save you considerable expense and hassle in the future.
Employment law is complex and always changing and you should always seek specialist advice.
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