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Explanatory Notes
Fixed Term Employment Contract -
This employment contract has been designed to be used by full time employees, employed on a three month fixed term basis. The Contract may be extended if both parties agree to this in writing. It is usual to issue the contract with a letter of offer. The contract of employment should be sent in duplicate and a copy signed by the employee and retained on their file. This will act as proof that the terms and conditions of the contract were received and accepted. Please note that there will often be other documents forming part of an employment contract, principally a staff handbook (see Contractstore document E122) (which, amongst other matters, will deal with disciplinary and grievance procedures, the provision of a company car), a Health and Safety booklet, a record of any voluntary opt-out from some requirements of the Working Time Regulations 1998 (see Contractstore document E121), a policy on employees' use of email/internet (see Contractstore document E 113), documents setting out the rules and entitlements due under any occupational pension scheme. Specialist legal/ accountancy advice is essential before agreeing to the provision of an occupational pension scheme or a bonus scheme. As an alternative to a staff handbook employers may wish to note that Contractstore has a bundle of standard letters for employers dealing with matters such as maternity/paternity leave (E102) and individual policies for disciplinary and grievance issues. It is important to review your contract to ensure that it is applicable for the changing needs of your business and is up to date in respect of legislative/regulatory changes. This document reflects the law as at April 2009. A brief guide to legal issues underlying contracts of employment is provided by Contractstore document Z153. There are some clauses in the contract which may be changed in accordance with your business requirements; however the list below covers the essential headings of any employment contract: (a) Commencement
(b) Job Title
(c) Place of Work
(d) Remuneration
(e) Hours of Work
(f) Holiday Entitlement
(g) Sick Pay
(h) Pension (where provided)
(i) Retirement
(j) Notice
(k) Disciplinary and Grievance
(l) Data Protection Please note that this document generally provides employees with their minimum statutory rights and that it is always open for employers to provide more generous rights if desired. Guidance on Specific Clauses: As an initial consideration, please be aware that there are Regulations in place to prevent fixed term employees receiving less favourable treatment than permanent employees. Please consider this at all times to avoid potential claims of statutory discrimination. 1. Start Date If this contract replaces an earlier contract with the same employer (or where an employee has transferred under the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE")), the earliest start date must be stated. An employee start date will affect any entitlement to compensation for "Unfair Dismissal" (where 12 months continuous employment is essential) and redundancy (where 2 years continuous employment is required). Please note that where an employee has been continuously employed under a "fixed term" contract for a period of four years or more, the employee is deemed to be a permanent employee. 2. Location Insert the normal place of work here, however if any travelling is required in the role it should be stated here. If no travel is necessary please state. It is useful for an employer to have the contractual right to require flexibility as to the employee's place of work so as to reduce the risk that a change of work place would trigger an employee's entitlement to redundancy pay. Specialist legal advice should be taken to ensure that such flexibility is legally 'reasonable'. 4. Remuneration Normally an employee's salary will be paid monthly in arrears. Make sure that any deductions from salary are clearly understood and agreed with the employee (excluding tax and NI). 5. Hours of Work [and Overtime] Normal office/ shift hours will apply but if any additional hours are required and agreed to, employers should be aware of the statutory constraints of the Working Time Regulations 1998. It should be clearly agreed whether the employee will be paid overtime for extra hours or is to take the time off 'in lieu'. Where an employee has opted out of the Working Time Regulations but subsequently decides to remove their consent to their opt-out, the maximum period of notice the employee can be asked to give is three months. 6. Holiday Entitlement and Holiday Pay As of April 2009 all full time employees are entitled to take 28 paid leave p.a. which may include bank or public holidays. There is no automatic right for employees to take time off on bank/public holidays (paid or unpaid) nor are employers obliged to allow employees to take paid time off for bank/public holidays in addition to the 28 day statutory minimum (inclusive of Public and Bank Holidays). This entitlement should be pro-rated for the three month term. 7. Sickness Absence It is normal to offer a benefit for time off sick in addition to the Statutory Sick Pay scheme ('SSP'). Given the range of benefits offered by different employers, it is advisable for details to be contained within a separate policy, or within part of a staff handbook. Care must be taken to ensure consistent treatment of all employees so as to avoid claims for statutory discrimination. 8. Pension Fixed term employees must be treated in the same way as comparable permanent employees (for example, in respect of pay, conditions, benefits, pension rights and opportunity to apply for permanent positions) unless there are "objectively justifiable" circumstances for not doing so, i.e.: if there is a genuine, necessary and appropriate business reason. These may be relevant considerations when deciding whether to offer access to a pension scheme. If life assurance/medical insurance is offered the contract should state so. Currently employers are not obliged to offer employees membership of an occupational pension scheme. Where the employer employs five or more employees the minimum that an employer has to offer is access to a stakeholder pension scheme. 9. Disciplinary and Disciplinary and Grievance Procedures All the details of these procedures should be issued to all employees when they first start work. It is prudent to follow the A.C.A.S guidelines (within the Code of Practice) for these procedures and to have either separate policies or to incorporate those policies in a staff handbook. 12. Notice or Termination of Employment This section sets out the basic provision that the contract will expire automatically at the end of the three months. There is however flexibility for earlier termination by either party. There is also the option of extending the fixed term. There is also a garden leave clause. This gives the employer the option of requiring the employee to serve their notice period, but to do away from the office. This may be appropriate in circumstances where the employee is disgruntled about the employer and/or their departure, or perhaps where the employer has reasons for wanting to keep the employee away from current business information, contacts etc. Please note that when an employee is placed on garden leave, they must still be paid their notice money in full. Specialist advice around termination of employment should always be sought when an employer is considering dismissing an employee.
10. 13. Retirement Under current age discrimination law the normal retirement age for both men and women is 65 years. However all employees have the right to ask their employer to give consideration to defer retirement. 15. Confidential Information Employers have the right to protect confidential information such as trade secrets and customer lists etc. both during and after a term of employment. Exceptions, set out in this section, include disclosures required by law. 17. Data Protection and Privacy To ensure compliance with the provisions of the Data Protection Act 1998 ('DPA') employers must tell employees the purposes for which they propose to collect and process personal data and where that data may be processed outside the European Economic Area this must also be stated. Employers must ensure that they adhere to the principles set out in the DPA (very broadly data must only be collected/processed where necessary, for the purposes advised, held for only so long as necessary and must be held securely). 18. Restrictive Covenants It is often reasonable for employers to include this type of clause in employment contracts so as to protect legitimate business interests. Such clauses are less likely to be considered reasonable in respect of short fixed-term contracts. However great care needs to be taken to ensure that any restrictions upon an employee's future employment are not struck down by the courts as being unreasonable. The 6 month limit is a suggestion only and it is essential that specialist legal advice is taken before including any restrictive clause. 19. Entire Agreement This is a standard provision to ensure that there is no confusion as to precisely what the terms of an employee's contract of employment are. 20. Governing Law This contract is governed by English law and is not suitable for use in other countries.
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