Contract of Employment (E110)


 
Contract of Employment

This contract is suitable for junior employees rather than senior managers.

This straightforward five page document contains 12 clauses covering

  • appointment, commencement and duties
  • remuneration and expenses
  • hours of work
  • holidays
  • absence due to illness
  • pension scheme
  • termination
  • confidentiality
  • non-solicitation
  • notices
  • disciplinary and grievances
  • other matters, including the scope of the agreement and the inapplicability of the Contracts (Rights of Third Parties) Act 1999

This is a standard contract and is not linked to English law, so can be used in any country.

For senior appointments please see documents E106 and E107.


Want more info? - See detailed Explanatory Notes below

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You will find this contract in:

Full Catalogue
Employment & Personnel

 

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Explanatory Notes

E110 CONTRACT OF EMPLOYMENT (JUNIOR EMPLOYEE)

EXPLANATORY NOTES

Please note that these Explanatory Notes are for guidance only and do not form part of the contract

This contract is reasonably comprehensive for general purpose use, although it is not appropriate for a senior executive.  As will be seen, there are many details to be inserted which, of course, will depend upon the nature of the employee's job, salary etc.

We trust that the Agreement is sufficiently clearly written not to require very much by way of explanation.

Employment law is a complex affair and changes in legislation, often designed to give greater protection to employees, are frequent.  Advice from specialist lawyers on the efficacy of the Agreement, (and on particular clauses such as non-competition provisions) is strongly advised.

EMPLOYMENT CONTRACTS - SOME NOTES ON THE POSITION UNDER ENGLISH LAW

When writing an employment contract it is necessary to take account of the relevant legislation. Every country has laws which are designed, to a greater or lesser extent, to protect the rights of employees.  The European Union, of which the UK is a member, has developed a sophisticated and complex set of rules governing the rights of employees.

The UK legislation (Employment Rights Act 1996) requires every employer to issue to every employee within 2 months from the date he/she starts work a statement covering a number of items. This list contains the essential matters which any employment contract needs to deal with.

Here is an abbreviated list of those items

•     Name of Employer and of Employee;
•     The start date of the employment;
•     Job title & brief description of the job;
•     The remuneration (or the method of calculating it);
•     Payment intervals – weekly, monthly etc;
•     Terms & conditions relating to hours of work;
•     Terms & conditions relating to holidays, including public holidays and holiday pay;
•     Terms & conditions relating to sickness or other incapacity;
•     Any pension rights;
•     Notice periods;
•     The place of work;
•     Where the employment is not intended to be permanent, the planned duration or, if it is for a fixed term, the end date;
•     A note concerning the Employer's disciplinary procedure.

There are also provisions that apply if the employee is to work outside the UK and in that case the period overseas, the currency of remuneration and any extra pay and/or benefits must be covered.

When the employer enters into a contract of employment with the employee covering these terms, it will avoid the need for any separate statement to be issued. The employment contract will usually cover some other matters as well.

STATUTORY RIGHTS OF EMPLOYEES

In addition to the statement of terms mentioned above, an employee has a variety of rights laid down by law which cannot be removed by the terms of any employment contract. The list below is by no means comprehensive but it does mention some of the more important rights.

The statutory rights include:

Itemised statement of pay. This must be issued when an employee is paid and it must show: gross remuneration, net pay, and all deductions and where the pay is made up in different ways, these must be itemised.

Time off for public duties. Where an employee has any public duties – e.g. if he/she is a trustee of a NHS hospital trust or a prison visitor.  Similarly, if he/she is involved in trade union activities.

Notice of termination.  The minimum permitted notice periods are related to the length of service and are as follows:

None if this is less than a month
1 week if this is between 1 month and 2 years
2 weeks if this is between 2 and 3 years
Then an extra week for each full year of service up to a maximum of 12 weeks notice.

Sick Pay.  An employee who is absent from work for more than 4 days consecutively is entitled to sickness benefit for up to 28 weeks at rates that are set by the Government.  In practice employment contracts often provide expressly for the usual salary to continue for some time if an employee is off work due to sickness.

Maternity Leave

For full details of maternity leave entitlement please see the following link:

https://www.gov.uk/maternity-pay-leave/overview

 
Paternity Leave  

For more information on paternity leave entitlement please see the following link:

https://www.gov.uk/paternity-pay-leave/overview

Adoption Leave  

For more information on adoption leave entitlement please see the following link:

https://www.gov.uk/adoption-pay-leave/overview

Parental Leave

For more information on parental leave entitlement please see the following link:

https://www.gov.uk/parental-leave/overview

Flexible Working

All employees with at least 26 weeks’ service may apply to their employer to change their working arrangements to enable them to look after children aged 16 or under, disabled children under the age of 18, a spouse, partner or civil partner, other adult relative or any other adult who lives with the employee. ‘Flexible working’ is broadly defined and includes part time working and working from home. There is a formal procedure for the consideration of applications and all requests must be considered seriously. However an employer may reject a request based on a number of stated grounds, such as the burden of additional costs. An employee will have the right to appeal to the employer against their decision.

Note that rejection of a request for part-time working may constitute indirect sex discrimination.

ACAS have published a helpful booklet giving guidance to employers dealing with requests for flexible working.

National Minimum Wage

The minimum wage rate changes from time to time.  More details can be found at the following link:

www.gov.uk/national-minimum-wage-rates

Working Time Regulations

The Working Time Regulations stipulate an average 48-hr working week as a maximum which employees can be required to work. The average is usually calculated over a seventeen-week period. The regulations also contain provisions for minimum periods of break, separate provisions for ‘night workers’ and for 28 days’ paid holiday in any year for all full time employees. Part time employees have the right to take pro-rated paid leave. Bank and public holidays may be included in an employee’s annual leave entitlement. There is no statutory right for employees to take bank/public holidays as leave.

Employees may be asked to contract out of the 48 hours limit but cannot be asked to contract out of provisions relating to breaks, night time working or paid leave.  To minimise the risk that an employee’s contracting out from the 48 hour week limit may be regarded by an employment tribunal as ‘involuntary’ we advise that the opt-out is dealt with in a separate document and is not part of the contract of employment.

Discrimination

It is illegal for an employer to discriminate on grounds of sex, gender reassignment, pregnancy, maternity, race (which includes ethnic or national origins, nationality and colour), marital or civil partnership status, disability, age, religion or belief and sexual orientation. In accordance with the Equality Act 2010, these grounds are called the “Protected Characteristics”. The Equality Act 2010 also places an obligation on employers to ensure that women's’ pay matches that of men in the same job or a job of similar worth. The obligation not to discriminate applies both in the recruitment process and in the course of an individual’s employment e.g. training, promotion and remuneration. These obligations may also continue once employment has ended, for example, in the provision of references.

There are some exceptions to the basic rules – e.g. where the individual’s gender is an essential requirement for the job – e.g. a female model.

Two points regarding disability and religious discrimination:

1.    employers are obliged to make ‘reasonable adjustments’ to both premises and working practices to accommodate the requirements of disabled employees;

2.    ‘religious discrimination’ includes discrimination on the basis of a philosophical belief, the absence of faith or the absence of any philosophical belief.

Part-time and fixed term employees have the right to be treated no less favourably than full-time employees.

"The Code of Practice on Employment" and the "Non-Statutory Guide on Employment" published by the Equality and Human Rights Commission, provide useful assistance in respect of discrimination law and are available on their website at www.equalityhumanrights.com."

Note that unlike awards for Unfair Dismissal which are capped, compensation awards for unlawful discrimination are uncapped.

Unfair Dismissal

In most cases, only employees who have 12 months’ continuous service have the statutory right not to be unfairly dismissed (exceptions include where an employee is dismissed with less than 12 months’ service due to pregnancy), and accordingly are entitled to bring a claim for unfair dismissal in the Employment Tribunal. ‘Unfairness’ may be either substantive i.e. dismissal for a reason not recognised in law, or procedural i.e. failure to observe a fair and reasonable disciplinary/appraisal system.

Employers and employees should comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures. The Code is not legally binding, however if an employer unreasonably fails to comply with the Code, an Employment Tribunal will have the power to increase any compensation awarded to the employee by up to 25%. If an employee unreasonably fails to comply with the Code, the Tribunal can also reduce any compensation awarded by 25%.

The maximum award of compensation, in most cases, for unfair dismissal with effect from 1st February 2010 is £76,700.

Note that ‘Unfair Dismissal’ rights are separate from and in addition to employees’ rights in respect of ‘Wrongful Dismissal’ (see below).

Wrongful Dismissal

Wrongful Dismissal is a dismissal in breach of an employee’s contractual right to notice.  Although separate from an Unfair Dismissal claim, both may be pursued together in an Employment Tribunal.

New Pension Regulations 2012

The government is set to introduce compulsory workplace pensions from 2012 and vast numbers of employers, from the largest to the smallest, will be affected.

Initially, smaller businesses with fewer staff need not to worry, because the reform will be carried out in stages.

Only employers with over 30,000 staff will be forced by law to offer their workers a company pension scheme in 2012.

However, by 2013 any employer with more than 350 staff on its books will be obliged to set up and contribute into workplace plan for its employees.

Between 2014 and 2016, those employers with less than 350 staff will be subject to the same rules.

Employees will be auto-enrolled and can expect their company to put a minimum 3% of any earnings between £5,035 and £3,540 into each worker's fund.

To help, the government is introducing NEST – National Employment Savings Trust – which will be provide a state-led alternative for any employer wishing to use it.

Here are some tips for employers to consider as the reform come into effect.

1.     Budget now

    Consider the cost impact of the compulsory 3% employer contribution or if you offer a higher contribution rate, the cost and sustainability of enrolling all staff on this basis. Consider also whether you will make contributions on the full salary amount or band earnings.

    The key is to budget now for the new measures, so that bigger pension contributions will not mean a sudden spike in costs.  One solution may be for employers to consider reviewing their total remuneration package to absorb the extra costs and looking at methods such as salary sacrifice as a cost-effective way of increasing pension contributions.

2.     Decide which type of pension you want to offer staff

    Consider the advantages and disadvantages of an employer pension scheme and the NEST scheme and decide which is more appropriate for your own organisation.  It may be that a combination of the two schemes is the best approach in the first instance, with different staff being eligible for different schemes e.g. senior and employed staff being enrolled into an occupational scheme and contract staff being enrolled into a NEST.

3.     Consider the impact on retaining and recruiting employees

    What do you want your pension to say about your organisation?  Consider how you want your pension scheme to fit in with your overall benefits package. While some employers may take this opportunity to reduce their pension contributions, organisations that provide pension schemes above the standard laid out by the Government are likely to be a more attractive proposition for new and existing employees and demonstrate a commitment to their workforce.

    Employers who do intend to offer schemes with contribution rates above the statutory minimum may be interested in applying for a pension quality mark to differentiate their scheme from others. (www.pensionqualitymark.org.uk)

4.     Does your existing scheme meet the Government's requirements?

    Examine any existing pension schemes you have in place to determine if they will meet the minimum requirements set out by the Pensions Act. Also consider the likely cost implications of enrolling all non-members into this scheme. In particular, I would advise employers to review their default funds to ensure that they are appropriate for all staff, taking into account the ages of employees, especially those nearing retirement and any ethical or moral views regarding investment.

5.     How will you communicate the changes to your staff?

    Consider how you will go about communicating these changes to your staff. It is important to try and engage employees with their pension and there are a variety of methods on hand to do this.

6.     Do you have systems in place to deal with the administration?

    It is important to ensure that your payroll and HR systems are able to cope with any extra administration. This will be particularly relevant for any organisations that intend to run both an occupational pension scheme and enrol some staff into the NEST system.

7.     When do you need to start considering what to do?

    Starting to prepare for the reform now is a good idea. Beginning sooner, rather than later, will enable changes to be broken down into smaller, more manageable tasks rather than waiting for the Pensions Regulator to begin contacting employers directly, which it is scheduled to do from 2012.

For more information for employers and employees visit:
https://www.gov.uk/workplacepensions/?

 

 

 

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