Drafting contracts of employment and employee handbooks

A contract of employment is an agreement between an employer and employee about the employer’s offer of benefits to an employee in return for work carried out. When the contract is accepted, rights and duties become enforceable through the courts.

Whether it is written or not, the contract is the basis of the employment relationship. According to the Employment Rights Act 1996, employers are required to provide employees with a statement of contractual terms within two calendar months of starting work. Furthermore, a written contract can reduce disputes between the employer and employee at a later date.

A ‘contract to provide services’ differs in that this means that the ‘employee’ is actually self employed. A self-employed person will have fewer rights in comparison with an employee. Whereas, a temporary agency worker may be contracted with the agency under a ‘contract for services’ and the agency is obliged to provide a written contract.

The contract binds employer and employee until it ends, usually, when the employee leaves or when both parties agree changes to the contract. There are also terms in the contract that are ‘implied’ i.e. they do not have to be explicitly stated. These are to: maintain trust and confidence, act in good faith and ensure a reasonable level of health and safety requirements. Also, some terms become ‘implied’ because certain practices become customary.

An employee handbook is a statement or book that contains information about the policies and procedures of the employing organisation. The handbook should contain information about the employer’s disciplinary, capability, redundancy and grievance procedures.

An employer will require specialist legal support to produce a contract or handbook.