If you are a business owner it is certain that contracts play a big role in many areas of your business, Some will be simple, and others more complex requiring input and advice from your business lawyers. As for what the contracts relate to, this can vary significantly and impact just about every aspect of the operation of your business..

There are contracts for purchasing supplies, materials, and stock, contracts to supply clients, contracts relating to your premises, and contracts that may be for the purchase or the hiring of machinery and equipment. Beyond these, there is a type of contract which is one of the most important that any business owner will have within their company and that is the employment contract of each of their employees.

An employment contract has two core reasons to exist and that is the protection of the employee and the protection of the employer. It is often thought that an employment contract’s sole purpose is to protect a worker’s rights and to ensure that they were not having to work under unacceptable, and even unlawful working terms. While it does fulfils that purpose, it is just as crucial in the protection of the employer too.

We often hear of employees being exploited, and of course for any employer to do that is completely unacceptable. But there are also cases of employees not fulfilling their obligations, or instigating frivolous legal action against their employers, and regardless of the legitimacy of any such action, the employment contract can be what protects the employers from any possible litigation.

While some verbal employment contracts do exist we would strongly advise that all employment contracts you use are in writing and created with the help and advice of a commercial lawyer. Trying to create one on the cheap yourself leaves you wide open to the possibility that the contract you create is unlawful, with all the legal ramifications that could create.

As for what an employment contract should include there will obviously be some bespoke elements that are specific to your company and the position of the employee within that company. There are also several generic elements which most employment contracts should include as follows:

  • Date of employment
  • Probation period
  • Duration of contract
  • Remuneration and benefits
  • Job title, duties, and responsibilities
  • Hours of work
  • Disciplinary policies
  • Confidentiality clauses
  • Notice period

As you can see that is not an insignificant number of areas that have to be covered and therefore it should normally be the case that an employment contract runs to several pages. It is key that everything within the contract is clear and unambiguous, which, again, is why we recommend that you discuss its creation with an employment or commercial lawyer.

Whilst the employment contract will include many of the responsibilities of the employee, it is certainly worth noting that employers have responsibilities too. These include matters such as health and safety, equitable and fair payment for employees, keeping employees informed of any changes to their conditions, and ensuring that the welfare of employees is considered at all times.

With responsibilities on both sides of the equation, it is therefore essential that any employment contracts within your business are watertight and do not allow for the possibility that an employee could take advantage of any ambiguities or omissions.