A contract of employment is a vitally important agreement which aims to protect both employers and employees alike. It sets out a legal agreement between both parties, regulating behaviours of both and setting expectations. A contract of employment details an employee’s rights, responsibilities, duties, and employment conditions, known as the terms.
Why are employment contracts important?
Employment contracts are important because if an employee believes an employer has seriously breached it, they may take the matter to an employment tribunal in an unfair dismissal or a constructive dismissal claim. Constructive dismissal occurs when you feel you are forced to resign from your job against your will because of your employer’s conduct. If you do proceed with a constructive dismissal claim, you have three months minus a day from the date your job ended to start tribunal action.
Requiring the services of an employment law solicitor such as https://www.employmentlawfriend.co.uk/constructive-dismissal Employment Law Friend constructive dismissal claim</a> can be difficult – but not impossible – to prove. In 2017, fees for bringing an employment tribunal were scrapped after a High Court challenge by a trade union which claimed the fees deterred people from seeking justice The maximum amount you can be awarded as compensation for constructive dismissal is capped at £93,878 or 52 weeks’ gross salary, whichever is lower. This is on top of a basic award which can be ordered by the Tribunal of up to £17,130.
The Terms of employment
As contracts of employment are so important, anyone who is an employer or employee should be fully versed in what they mean. Within such a contract, there are four different types of terms of employment:
Statutory terms of employment: Unlike contractual rights which are set out by an employer, statutory terms of employment are set out by Parliament. You are legally entitled to these rights, which include such things as the right not to be unfairly dismissed, the right to a statutory redundancy payment, the right not to not have wages deducted without authorisation and the right not to be discriminated against. It also includes the right to receive the minimum wage, as well as maternity and paternity rights. In some cases, statutory and contractual rights may overlap somewhat. For example, a company may choose to offer a contractual period of notice that is longer than the statutory period of notice.
Express terms of employment: Express terms are those which are specifically mentioned and agreed by you and your employer, including your pay, hours of work, holiday entitlement, sick pay and job title
Implied terms of employment: Employers may not always spell out all the rights and duties in the terms of employment – some are just obvious expectations which are implicit in every employment contract. Examples include that an employee must not act dishonestly, that there should be mutual trust and confidence, all parties must act in good faith and that an employer must provide a safe working environment. Other implied terms may be long-standing or established customs or practices unique to that particular industry or workplace.
Incorporated terms: These terms may be included in another document such as the Employee Handbook or company handbook. As such, the employee handbook may be mentioned within a contract of employment. If a contract does refer to a company handbook, a tribunal may view the entire document as contractual.
Employment contracts make clear the terms in case a dispute should arise in the future. A well-written contract ensures both the employer and employee know exactly where they stand and what is expected of them.