24 November 2020 | News

Are your employment contracts watertight?

Few things in life can feel as intimidating as drawing up a contract. As a legally binding agreement it is essential that the contract is written in such a way that your interests are protected, especially when things go wrong. At its most simple, a contract is an agreement between two or more parties which, if valid, is enforceable by the courts.

Employment contracts should be written to ensure that things are equitable between the employer and the employee. As an employer, there is little point in wrapping your employees in a contract that is so tight that, when they leave, the HR processes and workload left to other employees become unmanageable. It is far better to offer employees a contract that they accept is fair and balanced, and one which means that, should they decide to move on, they can leave on amicable terms with the minimum of fuss.

There are key points that an employment contract must contain, including (but not necessarily limited to) the name of the employer’s business, the new hire’s name, the job title and/or a good job description, salary, benefits, and the start date. These are the most important elements, certainly as far as the new employee may be concerned, but the contract must also specify notice periods, any company or auto-enrolment pension schemes, and the grievance procedure.

It’s usually not recommended that a small business employer draws up its own employment contract unless there is a dedicated HR function within the company. Employment law is complex and detailed, and at the time contractual clauses come under scrutiny emotions are charged on both sides of the table. It’s vital that the contract is well-structured, detailed, and set out to ensure that each party’s obligations are clearly understood. Any ambiguity may benefit the party who did not draw up the contract, regardless of whether they agreed to it.

In addition to a well-written employment contract, an employer should also make available a detailed Employee Handbook. While it would often be impractical to include a staff handbook within the contract, the contract should point the employee to the handbook. The handbook would include information about the day-to-day policies and more general company information, such as the company’s values, incentive schemes, and policies that are not required by law. The Employee Handbook is usually given as part of a new hire’s induction, but is also sometimes given alongside the contract.

An employer should schedule regular reviews of employees’ contracts. Occasionally employment law changes and ambiguities or inaccuracies may become apparent even though the contract was watertight when it was written. When updating a contract, it is important to discuss changes with employees or their representatives, and to give them an opportunity to query, even challenge, those changes. The opposite is true when an employee wishes to change their contract – the first step is to discuss the changes with your employer, explaining why you would like the contract to be updated, be that to reflect changes in legislation or in your life away from work.

Aughton Ainsworth has well-established experience in all aspects of employment law, providing services from developing and writing employment contracts to providing support to employers and employees in the event that such a contract must come to an end.

If you would like to discuss how our Employment services can be of use, whether you are an employer or an employee, please contact Andy Williamson on 0161 710 3760, or by email at andywilliamson@aughtonainsworth.com.

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