Becoming an employer (3) - contracts
One of the easiest things, for me, about setting up as an employer was creating the Letter of Employment, to summarise all the terms and conditions of employment for my new employee. After all, I create these documents for my clients all the time.
However, I know why my clients ask ME to do it for them, as it's not an easy document to get your head around if you haven't been surrounded by contracts for 20 years like me. If they don't ask a HR professional to put something together for them, your typical business owner will google "contract of employment" and download a template to use, which may or may not be a great idea...
A much better place to start is the .gov website, where they nicely explain all the essential terms you need to cover in the Written Statement of Employment Particulars, which you are required by law to give someone on or before their first day of work. You used to have a month to get this document to someone, but as of April 2020 its now a day one right.
Also, you do have to give a Written Statement of Employment Particulars to people who fall into that pesky category of workers*, even if the're not actually employed. I tend to use two different documents for employees (Letter of Employment) and workers (Worker Agreement) as the terms will be different due to the different rights they have - but now we're getting too technical.
Back to the basics... There are a number of terms you HAVE to include in the Written Statement of Employment Particulars on day one, and most of them are quite obvious. They are:
employee’s or worker’s name,
the job title or a description of the work
start date for the agreement
how long the job is expected to last (and what the end date is if it’s a fixed-term contract)
how long any probation period is and what its conditions are
how much and how often an employee or worker will get paid
hours and days of work and if and how they may vary (also if employees or workers will have to work Sundays, nights or overtime)
where an employee or worker will be working and any flexibility expected - if an employee or worker works in different places, where these will be and what the employer’s address is
holiday entitlement and how public holidays are treated
any obligatory training, whether or not this is paid for by the employer
On the first day, you must also provide the employee or worker with information about:
sick pay and procedures
other paid leave (for example, maternity leave and paternity leave)
You don't have to put this in the Written Statement of Employment Particulars, but I tend to always at least reference these things, and then perhaps signpost people to more detailed procedures found elsewhere. If you do that, you need to make sure the employee or worker can easily access that information from day one.
Lastly, within two months you need to provide written information about pensions, disciplinary and grievance procedures, any rights to training, and any collective agreements in place (those are only relevant if you recognise a trade union). Again, I tend to reference all these things in the Letter of Employment and signpost to more detailed information elsewhere. Then everything is dealt with all in one go!
BUT, a Written Statement of Employment Particulars is NOT a contract of employment! Any gasps?
A contract of employment exists even if you don't write anything down. It includes lots of terms relating to employment conditions and the rights, responsibilities and duties of both the employee and the employer. You can include contractual terms in the Written Statement of Employment Particulars, in a fully documented Contract of Employment, in an Employee Handbook, in a letter, or even in a notice on the wall. But not everything you write down is automatically contractual. Also, contractual terms can be implied by law (e.g. working time regulations or health & safety duties), by custom and practice in your business (like you paying a Christmas bonus every year) or by long standing legal principles (like the implied term of mutual trust and confidence between employee and employee).
Some arrangements between you and your employee you want to be contractual, but beware of making things contractual if you may not stick to them yourself, or may want to change them. If you don't comply with a contractual term then you are in breach of contract and a claim can be made against you. Also, you often can't change a contractual term without the employee's agreement, or at the very least a consultation process.
I went for a simple Letter of Employment that covered all the basics, but also included contractual terms about confidentiality, data protection, information security, and conflicts of interest, as these are important to the nature of my business and the work my employee will do for me and my clients. I hope that what's included in these extra terms will never need to be relied upon, but as an employer you do need to make preparations for the things that could go wrong later.
In the end, the contract of employment is what will be used if there's a disagreement between you and your employee that ends up with ACAS or in court. If necessary, some of the terms will be interpreted from your actions, not just from what you write down. It's one of those documents that doesn't matter too much, until it REALLY does.
So, before you just download a template you found via Google Search, make sure you think through everything carefully. ACAS have a couple of useful basic templates that can be good place to start for the Written Statement of Employment Particulars, but if you need extra protection for your business in certain areas then perhaps find a HR professional to help you (or you could go to a solicitor, but they're generally a lot more expensive).
Next up - employee data protection