In order to comply with Section 1 of the Employment Rights Act 1996 certain key information should be contained within a contract of employment:
- The names of the employer and employee.
- The date the employment starts and the date the employee's period of continuous employment began.
- Pay (or method of calculating it) and interval of payment.
- Hours of work.
- Holiday entitlement and holiday pay.
- The employee's job title or a brief description of the work.
- Place of work.
Further information around sick pay, notice, disciplinary and grievance procedures and pensions should be provided in a readily accessible document (usually a Company Handbook):
However, even if your employees have been provided with the above, it is highly unlikely that this will be sufficient to protect your business.
For example, in the absence of any defined notice period, the statutory period will apply which states that an employee is entitled to a week for continuous service up to 2 years, and then an additional week for every subsequent year up to a maximum of 3 months for 12 years’ service. The notice that the employee needs to give the employer, in the absence of any contractual provision, is just one week.
Further, it is might be vital for some businesses to protect certain information or restrict exiting employees from gaining an unfair competitive advantage when they leave the business to start up with a competitor. In these circumstances the contract of employment needs to be carefully drafted to properly protect the business interests. In the absence of clearly drafted restrictive covenants the business has little protection once the employee leaves with the ability to contact key clients, or other senior members of staff with a view to taking work away from the business.
Therefore, whilst the basic statutory requirements are all you need to be legally compliant it is essential that every business properly considers the damage which could be done if a senior employee were to leave to start work with a competitor with the ability to take key members of staff and/or the ability to poach work away from the business.
Please contact a member of our Employment Team for more information as to how we can help to protect your business.