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Contracts: when to issue and why?

By December 14, 2017Uncategorized

Many employers are of the belief that not issuing a contract until after a probationary period has elapsed is the right way to go but what impact does this have in reality on the employment relationship?  What are your obligations?  How do you assert or enforce contractual clauses if no principle statement/contract has been issued?

Under the Employment Rights Act 1996 (plus further provisions), a statement of main terms should be provided to an individual within eight weeks of their start date.  The “principle statement” (in the form of an offer letter) needs to detail the following terms as a minimum:

  • the business’s name
  • the employee’s name, job title or a description of work and start date
  • if a previous job counts towards a period of continuous employment, the date the period started
  • how much and how often an employee will get paid
  • hours of work (and if employees will have to work Sundays, nights or overtime)
  • holiday entitlement (and if that includes public holidays)
  • where an employee will be working and whether they might have to relocate
  • if an employee works in different places, where these will be and what the employer’s address is

As well as the principal statement, a written statement/contract must also contain:

  • how long a temporary job is expected to last
  • the end date of a fixed-term contract
  • notice periods
  • collective agreements
  • pensions
  • who to go to with a grievance
  • how to complain about how a grievance is handled
  • how to complain about a disciplinary or dismissal decision
  • Failure to issue a statement of main terms/contract, although not a standalone claim, can add two weeks’ pay award to any claims won by an individual who has not received one.

Best Practice: is to issue a contract on or before the start date, ideally when the conditional offer of employment letter is sent to the employee, this gives the new employee time to read through the terms and conditions to which they will agree.  You can also then request a signed copy of the contract to be bought back for the HR File on or before their first day of work thus ensuring by the time that they start with you that they can reasonably be expected to understand core policies and procedures and contractual obligations.  

Employees without a contract or Statement of Main Terms

Having someone on site without a contract or knowledge of their keys terms and conditions of employment Including how to report absence and lateness, safeguarding protocols and codes of conduct or even how long their probationary periods are, can only ever be detrimental to the business and provide the employee with an excuse for their lack of understanding.

Long standing staff without contracts are assumed to have accepted the contract terms as provided to them but you are encouraged to have evidence that you have issued the contracts.  Should an employee raise issue with their contract and refuse to sign it, or claim that they are working under protest, it is important to contact your Advisor without delay.