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Employee Contracts

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A contract of employment is a legally binding agreement between an employer and employee. In the UK, the term ‘employee’ is defined by the Employment Rights Act 1996 as an individual who has entered into, or works under a contract of service or apprenticeship, and they are a mixture of ‘express’ and ‘implied’ terms.

Contracts can be written, verbal or by implication e.g., if an employee usually works on certain days and times or normally completes certain tasks this can be ‘implied’ as their contract.

Why is this important?

The contract helps both the employers and the employees to understand the requirements of the job. It allows for clarity in communication so both parties can understand what is required.

How will this benefit the employees?

Employees can be clear about their role, their responsibilities but also, they can give a level of employment security. Contracts ideally include a clear explanation on sick pay, holiday entitlement, pensions and working hours.

They can also be supported by a staff handbook with additional details on flexible working, support for caring responsibilities and other support e.g., menopause awareness.

How will this benefit employers?

A clear contract can set the scene for a positive working relationship where both parties fully understand the job role and the rights and responsibilities of employee and employer.

If employees have a clear contract agreed at the start of their employment it can help should there be any disputes.

This should also link to legislative requirements e.g., Health and Safety, Disability Discrimination, Equality 

A good contract can also apply to casual workers too.

"A clear contract can set the scene for a positive working relationship"

Where to start:

The Gov.Uk site gives offers detailed information on contracts and a free printable guide. In addition to this there is a clear guide on how to employ someone covering ‘Right to work,’ National minimum wage, Disclosure and barring checks (DBS) and HMRC requirements.

Be aware of the National Minimum Wage and the National Living Wage as this changes each year.

Have a basic contract template to remind you of what to include:

  • the employer’s name

  • the employee or worker’s name

  • the start date (the day the employee or worker starts work)

  • the date that ‘continuous employment’ (working for the same employer without a significant break) started for an employee

  • job title, or a brief description of the job

  • the employer’s address

  • the places or addresses where the employee or worker will work 

  • pay, including how often and when (for example, £1,000 per month, paid on the last Friday of the calendar month)

  • working hours, including which days the employee or worker must work and if and how their hours or days can change

  • holiday and holiday pay, including an explanation of how its calculated if the employee or worker leaves

  • the amount of sick leave and pay (if this information is not included in the document, the employer must state where to find it)

  • any other paid leave (if this information is not included in the document, the employer must state where to find it)

  • any other benefits, including non-contractual benefits such as childcare vouchers or company car schemes 

  • the notice period either side must give when employment ends

  • how long the job is expected to last (if it is temporary or fixed term)

  • any probation period, including its conditions and how long it is

  • if the employee will work abroad, and any terms that apply

  • training that must be completed by the employee or worker, including training the employer does not pay for

Employment contracts | Acas

Effective actions:

Prepare a basic contract template to be used for all employees, check that all your employees have a current contract.

Check the Gov.Uk website or Acas for guidance.

How to achieve changes:

Ensure that contracts are issued promptly (2-3 weeks of start date of work.)

Take the opportunity to review your policies to ensure you are offering the best opportunities for your employees e.g., support for flexibility for health or caring needs, inclusive recruitment.

Ensure that you have the policies required by legislation e.g. Health and Safety at Work, Safeguarding, GDPR.  These can all be included in an employee handbook.

Useful Links

Employment contracts: Overview - GOV.UK (

Contracts of Employment | Factsheets | CIPD

Employing staff for the first time - GOV.UK (

The National Minimum Wage in 2022 - GOV.UK (

Federation of Small Businesses

Devon & Plymouth Chamber of Commerce - supporting business (

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