CONTRACTS OF EMPLOYMENT

Contracts of employment are legally binding agreements between an employer and employee. The contract is made up of both oral and written agreements and is formed when an employee agrees to work for you for pay. Contracts include:

• Express terms – those terms which are explicitly agreed.
• Implied terms – terms which are implied, such as those that are common practice in the industry and terms which are too obvious to mention like not stealing from an employer.
• Incorporated terms – terms incorporated from other documents, such as company handbooks.
• Statutory terms – terms imposed by law such as not to discriminate, maternity pay etc.

As an employer, you are required by law to provide a new employee with written details of their main terms and conditions within 2 months of employing them. This written statement must cover:

• The names of the employer and the employee.
• Job title or a brief job description.
• The date when the employment (or period of continuous employment) began.
• Remuneration and the intervals at which it is to be paid.
• Hours of work.
• Holiday entitlement.
• Entitlement to sick leave, including any entitlement to sick pay.
• Pensions and pension schemes that may be applicable.
• Entitlement of employer and employee to notice of termination.
• Where the position is not permanent, the period for which the employment is expected to continue or, if it is for a fixed term, the date when it is to end.
• The place of work.
• Disciplinary and grievance procedures.

You can vary an existing contract only with the agreement of your employee. Any agreed changes should be put in writing at the earliest opportunity. However, some contracts may contain express terms which allow you to make reasonable changes to your employee’s working conditions such as varying their duties etc.

If you impose changes to the contract that are not agreed by your employee, they have the right to take action for breach of contract. (If your employee continues to work under the amended contract without objection, they may be regarded as having agreed to the changes.) Your employee can take the following action for breach of contract:

• Where there is a fundamental breach of contract, they could regard this as bringing the contract to an end and leave their position. They have the opportunity of making a claim through an industrial tribunal for constructive dismissal (subject to them having the necessary qualifying service period).
• They may continue to work under the varied contract under protest, not accepting the new terms and treating the changes as a breach of contract and dismissal from the original contract. They may be able to make a claim for unfair dismissal before a tribunal (subject to qualifying service).