‘Your Business is Our Business’
As a cornerstone of any successful business relationship, the employment contract is not merely a piece of paperwork. Instead, think of it as a roadmap that sets out the relationship ahead for both employer and employee. It’s a vital tool for setting clear expectations, establishing mutual trust and above all maintaining harmony in your workplace. Knowing how to draft an employment contract matters.
In my experience as an employment law specialist, I’ve seen first hand the repercussions of inadequate employment contracts. Misunderstandings that could have been easily prevented can snowball into expensive legal disputes. A comprehensive contract can help you avoid such complications, safeguarding the interests of your business.
The contract also shows your employees that you respect their role within the organisation. It gives them the peace of mind that comes from knowing their rights, responsibilities and rewards are clearly defined and protected. Remember, a confident employee is a more engaged and productive employee.
Getting these elements right from the outset is crucial for a healthy employer-employee relationship. In the next section, we’ll look at other essential elements to incorporate into your contract.
There are other essential items that need careful consideration and including these creates a transparent working relationship and also safeguards your business against legal issues.
Let’s start by clarifying the nature of employment. It’s important to stipulate whether the employment is permanent, temporary, contract-based or part-time. Each type of employment has unique legal implications, so a clear definition is essential to prevent potential misunderstandings or legal pitfalls.
Let’s consider these below:
Remember, every detail matters when it comes to drafting an employment contract. Each of these elements contributes to building a healthy and productive work environment. A well-drafted employment contract is a long-term investment in the stability and success of your business.
We’ve established the foundation of an employment contract and its essential elements but the contract should also fit the unique needs of your business and the specific role of your employee.
Every business is unique and it’s vital that your employment contracts reflect this. Whether it’s specific clauses for protecting intellectual property or conditions for remote work, tailored provisions can help create a more harmonious and productive workplace.
Take, for example, a software development company. In this case, it would be wise to include non-disclosure and non-competition clauses in your employment contracts. These clauses are designed to protect sensitive business information and prevent employees from leaving your company to join a direct competitor.
Bear in mind, this isn’t an exhaustive list. Depending on your business type and the specific role of your employee, you might need to include other tailored terms.
Drafting these specifics can be a complex task. Every word can carry weighty legal implications. One-sided contracts that are overly restrictive may not hold up in court and can also damage relationships with employees.
No matter how well-drafted your employment contract is, it won’t be worth the paper it’s printed on if it isn’t compliant with current UK employment law. These laws exist to protect the rights of workers and maintain a balanced relationship between employers and employees.
Firstly, let’s consider statutory rights – these are the rights given to employees under UK law. Every employment contract must at least meet the minimum standards set by these laws. They cover a wide range of areas, from the minimum wage to maternity and paternity rights.
The National Minimum Wage is a clear example. Regardless of the terms of an employment contract, you are legally obliged to pay your employees at least the minimum wage. Here are a few more examples of statutory rights:
Aside from statutory rights, there are other legal considerations to bear in mind when drafting your employment contract. For example, the contract must not include any clauses that are unfair or deceptive. If it does, they may be deemed unenforceable by a court.
It’s not enough to simply draft a solid contract at the start of employment and then file it away for the duration of that employee’s tenure. The contract should also be regularly reviewed and if necessary updated.
An employment contract is not a static document. It needs to be flexible and dynamic and able to adapt to changes in the law and your company’s policy. Regular reviews ensure that your contracts remain up-to-date and legally compliant, while also reflecting the current reality of your employees’ work environment.
For instance, if an employee is promoted or their role significantly changes, their contract should be updated to reflect this new reality. Equally, if your company introduces a new policy for example around remote working, this should be integrated into the relevant contracts.
The law can also change. With the introduction of new employment legislation or updates to existing ones, your contracts may need amendments to stay compliant. A contract that was fully compliant one year may be outdated the next.
Remember, any changes made to the contract should be agreed upon by both parties. You cannot unilaterally impose changes without your employee’s consent.
To wrap it up, how to draft an employment contract is a comprehensive process that demands your attention and care. It’s about creating a robust framework for your relationship with your employees, one that promotes a culture of transparency, respect and fairness. Regularly reviewing and updating contracts is a part of that process. Ensuring your contracts are not just legally compliant, but also a true reflection of your business values and practices.
Remember, when in doubt, seek legal counsel. It’s far better to invest time and resources in getting it right the first time, than deal with legal issues later on.
Drafting an employment contract requires careful consideration from defining the job role to ensuring legal compliance. While it’s feasible to take a DIY approach, especially for small businesses, seeking professional legal advice can add an additional layer of assurance.
Engaging an experienced employment lawyer to review your employment contracts offers numerous benefits. They bring a wealth of knowledge about current UK employment law. They can help ensure your contracts are fully compliant, reducing the risk of potential legal issues.
However, while the legal assurance that a lawyer brings is crucial, it’s important to remember that the drafting process isn’t solely about ticking legal boxes. It’s about crafting a document that reflects the working relationship you want to have with your employees.
This is where the principles of clarity, fairness, and transparency come into play. A good employment lawyer will not just ensure your contract is legally robust, but also that it’s fair to your employees and clear in its terms.
Remember the importance of clear communication, attention to detail and consideration of your needs and those of your employees. With these principles in mind and with the support of legal advice, you’ll be well on your way to crafting effective and comprehensive employment contracts.
Just remember, a well-drafted employment contract is more than just a legal requirement. It’s a vital tool that sets the tone for your relationship with your employees and can play a crucial role in the success of your business.
Call John Bloor at EBS Law on 01625 87 4400 if you are an employer and need free advice on Drafting an Employment Contract.