Contract Law – What Should be Included?

Employment Law refers to all things in relation to the terms of employment, both from employer’s point or view and employees point of view. An important part of this is an employment contract which is a legally binding agreement between employers and employees. It can be a verbal contract but is usually a written one signed by both parties. Below are some of the specifics that are usually included in an employment contract.

Pay

An important part of an employment contract is how much an employee is paid. This can be an hourly wage or an annual salary. There are rules as to how much an employee should be paid; they must be paid at least the minimum wage. The minimum wage in the UK is currently £5.93.

Hours

The number of hours an employee is expected to work per week or month should be clearly stipulated in their contract. Typically this is 37.5 hours per week for those in full-time employment. If the hours of work are the same every week (for example Monday-Friday from 9am – 5pm) then this should be stated. If the hours vary week on week then this should appear in the contract and if someone is expected to work weekends this should also be mentioned. If relevant, overtime should be in the contract, for example when overtime may be required and the rate at which this should be paid.

Holiday

The number of days holiday entitlement per year needs to appear in a contract. The minimum by law this must be for a full-time employee in the UK is 20 days plus bank holidays, or 28 days in total. If employees are expected to work some or all bank holidays this should also be mentioned as should the rates of pay for these days.

Breaks

There are laws stipulating the minimum number of breaks and the length of breaks that employees are entitled to, so employers must make sure they are given at least these minimums. The contract must specify the company policy in this area.

Responsibilities

There may be specific employer and employee responsibilities that are stated in a contract. A good example of this is health and safety responsibilities, especially if working in a potentially dangerous environment such as on a building site.

Notice Period

Another element that needs to appear in the contract is the notice period. This is the amount of notice either the employer or employee need to give if they wish to terminate the employment contract. This is typically two weeks or four weeks although it can be shorter or longer.

Disciplinary Procedures

The specific disciplinary procedures should an employee need to be disciplined should be in the contract, especially if these differ to the basic law.

Other Entitlements

There are many other potential entitlements depending on the business, and these need to be detailed in the contract. For example, there may be a company pension scheme. Sick pay policy and bonus schemes are other things that can be included.

Any legal requirements that are not stated in the contract still need to be abided by. For example if no health and safety issues have been specified the employer is still responsible for the safety of employees.

An employment contract is essentially the terms and conditions of employment that both parties agree to and must follow. It is a safeguard for both employers and employees as the terms and conditions of employment are stated in black and white. Both parties know what their rights are and neither can break the terms set out in the contract.

Andrew Marshall (c)