Drafting contracts of employment and employee handbooks

Employment law makes a contract of employment an agreement between an employer and employee about the offer of benefits to the employee in return for work carried out. When the contract is accepted, rights and duties become enforceable through employment tribunals. A written contract can reduce disputes between the employer and employee at a later date.

What is a contract

The best employment lawyers regard a contract as something that binds employer and employee until it ends, usually, when the employee leaves or when both parties agree changes to the contract. A ‘contract to provide services’ differs because 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.

Whether it is written or not, employment law accepts that 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 on day one of starting work. Yet, according to employment law, the contract does not set out all of the terms of the relationship between employee and employer. There are also terms in the contract that are ‘implied’ i.e. they do not have to be explicitly stated. Also, some terms become ‘implied’ because certain practices become customary. These implied terms, under employment law are unwritten parts of the contract.

The contract starts when the employee begins work whether there is anything in writing or not. The contract could begin before work starts if the:

  • – job offer is accepted verbally or in writing
  • – offer was unconditional or the person met all the conditions, such as satisfactory references
  • – terms of the job are set out in a clear and definite way, verbally or in writing.

Contract terms

A contract of employment is made up of

  • – ‘express terms’ – specific terms agreed in writing such as pay
  • – ‘statutory terms’ – terms written up in law, such as employment law
  • – ‘implied terms’ – such as mutual trust and confidence and workplace custom and practice
  • – ‘incorporated terms’ – such as terms and conditions stated in the staff handbook or workplace agreements affecting many or all employees.

The contract can also contain ‘restrictive covenants’ that prevent a person whose contract has ended from engaging in particular actions that might affect the former employer. This might include the former employee agreeing, for a certain period of time, not to use information gleaned during their former work.

Employment law states that employers are required to have statements about the disciplinary procedure and rules, grievance procedure and, if five or more people are employed, a health and safety policy. Staff handbooks that contain information about the policies and procedures of the employing organisation can do this. An employer will require specialist employment law advice to produce a contract or handbook.