In this 7-part series of blog posts, we explore the basics of employment law to help offer advice to managers and business owners.
Here is part 6: Contracts of Employment
The contract of employment is the contract between an employer and employee to carry work of a particular kind for payment. Employment contracts operate in a similar way to any other legal contract and are enforceable through the County Court or Employment Tribunal.
The main points of an Employment Contract are:
- They can be verbal or written. I have heard many times from people that they do not have a contract after working somewhere for X amount of time. What they are saying is they don’t have a written contract but they do have a contract as they turn up for work and are paid.
- The terms of a contract can be Expressed. That is written down clearly eg, hours of work, location of work, pay, etc
- Some terms can be That is they are not written down but is something that would be expected of anyone to carry out the terms of the contract eg the implied term of trust and confidence.
- Contracts can be changed by agreement. They cannot be changed unilaterally but can be changed provided a proper process is followed and it is clear one is ending and a new one is starting. This can have risks of an unfair dismissal claim or breach of contract claim.
- Contractual terms can be made by custom and practice so if someone has worked a number of hours per week for a period of time this in effect becomes the terms of the contract even though no formal letter or agreement has been made.
- Likewise if the employee does not sign a contract but works under its terms for a length of time and has not raised any objections, those terms will be by binding by the effect of performance.
- Every employee is legally entitled to have a written statement of their main terms and conditions of employment within 8 weeks of starting. What needs to be included is laid down in the Employment Act 1996. This is not the contract of employment, although of course many of the terms will be the same. A contract of employment may of course include the main terms and conditions of employment.
Zero Hours Contracts
There has also been a lot of publicity about Zero Hours Contracts. They are often used where a great deal of flexibility is required eg in retail, hospitality and distribution. The key points of a Zero Hours Contract are:
- Zero hours contracts normally mean there is no obligation for employers to offer work, or for workers to accept it.
- Most zero hours contracts will give staff ‘worker’ employment status.
- Zero hours workers have the same employment rights as regular workers, although they may have breaks in their contracts, which affect rights that accrue over time.
- Zero hours workers are entitled to annual leave, the and pay for work-related travel in the same way as regular workers.
Protection is given for those on Zero Hours Contracts from an exclusivity clause. They are entitled to be at least the National Minimum Wage and National Living Wage.
