This stuff makes sense – employment contracts and policies.
Employment Law Partner Nigel Crebbin looks at the importance of well written employment contracts and policies.
It’s often the case that employees don’t have written employment contracts or have contracts which are out of date and no longer reflect the arrangements under which they’re working. However, properly drafted employment contracts and policies are far more than a luxury – they can provide important protections for employers, as well as clarity for employees as to the terms on which they are required to work.
Giving your employees a written statement of their terms and conditions of employment is a legal requirement under the Employment Rights Act 1996 (ERA) and that statement is meant to be provided to an employee within two months of his or her start date. The ERA sets out the areas which need to be covered in that written statement (such as job description, hours, holidays and sickness provisions) and if any of those areas are subsequently changed, then the employee has to be given an updated statement within one month of the changes being made.
Giving your employees comprehensive, written contracts of employment also means that you are making it clear what’s expected of them, for example with regard to their duties and when and where they are to carry them out – it also means that you are on a stronger footing as an employer if you find yourself having to take action against an employee because they’re not carrying out their duties as you expect them to.
Also, written employment contracts can contain an opt-out by the employee from the maximum working week requirements of the Working Time Regulations and provisions stating that if the employee at any time owes you any money, then you can deduct that money from their pay. Without any such written deductions provision, then making a deduction from the employee’s pay, even where they owe you money, is likely to be illegal.
Properly drafted disciplinary and grievance procedures are another important protection for employers. Getting things right as to how you conduct a disciplinary process is key if you are to avoid a finding of unfair dismissal and having a detailed, written disciplinary procedure means that you have a step-by-step guide as to how that process should be run. Your written procedure should be comprehensive and clear and you also need to make sure that it meets the requirements of the ACAS code of practice on discipline and grievance.
Another way that your written employment documents can help you is by protecting your business if your employee decides to move on and work elsewhere. Employment contracts can contain restrictions on the employee’s ability to use your confidential information after they have stopped working for you and also restrictions on their ability to work for a competitor or deal with your clients or poach your staff.
However, in order for you to able to enforce those provisions in court, you need to make sure that they are carefully drafted, so that they don’t go beyond what a court will consider as reasonable.
You also need to make sure that the restrictions are in line with the seniority of the employee and don’t go beyond what’s appropriate for an employee of their level. Where someone is to be promoted, then it’s a good idea to check their employment contract and consider whether as part of the promotion, the contract needs to be amended to contain new restrictions more suited to the new level at which the employee is going to be working in future.
So in summary, having good, written employment contracts and policies is an investment, as well as a legal requirement. They can provide clarity, guidance and protection and putting them in place is always time well spent.
About the Author
Nigel is a Partner in the Employment Law & HR team at Burnetts.
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