Are your employment contracts compliant?

It’s easy to see how it happens. A business owner launches their company, the to-do list is endless, and when it’s time to hire, they take a shortcut and reuse a contract from a previous employer or copy one found online with a quick search.

What could possibly go wrong?

Dangers of copy and paste employment contracts

As you know, signed contracts are legally binding, so what are you and your employees signing?

Big issues may be erroneous holiday allowances, say offering 35 days instead of 28, of enhanced sick pay at a rate you cannot afford. Once it is signed you are stuck with it.

Equally, it may be something that is missing rather than there in error. A client confidentiality clause, notice periods or a relocation clause for instance. Relying on older contract wording will also mean you do not include changes brought in by the latest legislation or case law.

If you really don’t check what you are copy and pasting, it could be complete nonsense with the original company’s name still inserted. It creates a poor impression, and maybe even poor publicity in this era of sites like Glassdoor.com.

Sometimes you may get away with it for a good run, but you may experience a real sting in the tail when a landmark event occurs in your business. For instance, a poorly worded employment contract might restrict your options if you need to make significant changes.

Another example is if you come to sell the business and TUPE is involved. Copy and paste contracts will almost certainly be uncovered if your buyer does their due diligence. You could be left with a deal falling through, or expensive remedial action to get everything in order before you can get a green light.

What should you include in an employment contract?

A written statement of particulars needs to be given to all employees on or before their first day of starting work. The basics to include are:

• Business legal name
• Start date and date of continuous employment
• Job title and reporting line
• Place of work
• Conditions of pay, how paid and when
• Sick pay and how to report absence
• Hours of work
• Holiday entitlement
• Notice period
• Pension and collective agreements
• Grievances and disciplinary matters

However, a good employment contract will be bespoke reflecting your business’s culture and operations. This means that you would probably choose to have more than the above, perhaps including things like a social media and privacy policy, and how you handle employee family commitments, for example.

Employment contract help from The HR Dept

Employment contracts and company handbooks are two of our core services at The HR Dept. Find out more about how they can help.