Employment Contract Template (Permanent) (E101)

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Who can use this Employment Contract ?

Any business employing staff can use it.  The template has been designed for use when employing a range of staff, senior and middle management in particular. And it is designed for either full-time or part-time employees. 

What is an  Employment Contract for?

It records the terms on which the employee is engaged by the employer.  And there are a lot of legal requirements in the UK with regard to employment contracts. An employment contract should be issued to employees no later than 8 weeks after they commence employment.

This  employment contract has clauses dealing with the workplace pension requirements as well as data protection, reflecting the GDPR and Data Protection Act 2018.  It also refers to employment-related policies and procedures, for which we have templates.

 What are the main points for an Employment Contract?

  •  Job description and duties
    Where the employee fits in to the employer organisation
  • Probationary period
    This can be useful for both sides to see if the appointment works OK
  • Hours of work
    Hours of work and whether overtime may be required/paid
  • Remuneration
    Salary, expenses and any contractual bonus as well as pension arrangements
  • Holiday
    How many days a year, and any restrictions including on carry-over of unused holiday to another year
  • Notice periods
    If either side wants to terminate the contract, how much notice is due
  • Confidentiality
    This can be important for any employer organisation
  • Restrictions on competition
    These may apply both during and after termination
  • Policies & Procedures
    sickness, disciplinary etc.                                                                          

What detailed terms does this Employment Contract contain?

This 8 page document contains 19 clauses covering

  • start date
  • probationary period
  • location
  • job title and duties
  • remuneration
  • hours of work (and overtime)
  • holiday entitlement and holiday pay
  • sickness absence
  • pension
  • disciplinary & grievance procedures
  • data protection
  • written policies and procedures
  • notice of termination of employment
  • return of company property
  • confidential information
  • collective agreements
  • restrictive covenants
  • scope of the agreement
  • governing law

For more information on each of these sections, see our Explanatory Notes below– which you will also receive when you download the Employment Contract from our website.

For information on signing documents see our Contract Signing page

When I download the document, can I change it and/or use it more than once?

 Yes.  All ContractStore’s templates are in MS Word and can be used more than once.  So one payment allows you to use our employment contract for several employees . As well as filling in the details – names and addresses of the parties, job description, salary etc., – you can alter or add to it if you need some special terms.

For more information watch the video on this page of our website or see our FAQs

Legal assistance

ContractStore supplies templates and is not a law firm.  But all our templates are written by experienced lawyers.  So, we can arrange legal assistance for customers who need special terms in one of our documents or a bespoke template. For more information see our Legal Services page.

 And if you want to contact us see our Contacts page

 

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Explanatory Notes

E101 PERMANENT EMPLOYMENT CONTRACT
EXPLANATORY NOTES

This employment contract has been designed to be used by full time or part-time employees, whether permanent or fixed term. The contract should be issued to employees no later than 8 weeks after they commence employment. 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.

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 was last updated in August 2018. As the law changes quite often, you are advised to have your contracts reviewed by an employment law specialist at regular intervals. 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/termination
(a) Disciplinary and Grievance
(b) 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:

1. START DATE

This needs to be inserted as indicated.

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. The following wording should be used instead of that in clause 1:

Your employment with the Company commenced on [day] [month] [year] and your period of continuous employment with the Company is calculated from that date

Please note that TUPE severely limits an employer’s ability to amend employees’ terms and conditions of employment and specialist employment law advice should be sought before seeking to make changes to existing terms where employees have transferred under TUPE

2. PROBATIONARY PERIOD

Where this contract is issued to a new employee a probationary period may be included. The usual period is 3 months and it should not normally extend longer than 6 months.

3. 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’. Any requirements to travel outside the UK for periods of more than 4 weeks should also be set out here.

5. 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).

6. 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. If an employer envisages an employee working, on average, more than 48 hours per week, an employee should be asked to sign ContractStore’s form E121, Employee’s Opt-Out from the Working Time Regulations 1998. This is a separate document, but a copy should be retained with the contract. Where an employee has opted out of the Working Time Regulations limit on weekly working time but subsequently decides to remove their consent to their opt-out, the maximum period of notice the employee can be asked to give to implement removing their consent is three months.

It should be clearly agreed whether the employee will be paid overtime for extra hours or is to take the time off ‘in lieu’.

7. HOLIDAY ENTITLEMENT AND HOLIDAY PAY

All full time employees on a five day week are entitled to take 28 days’ paid leave p.a., (equivalent to 5.6 times the normal working week) which includes bank or public holidays. For part-time employees, the same rules apply on a pro rata basis so for someone working 4 days a week, the entitlement is 22.4 days (5.6 x 4/5) which includes 4/5 of the annual entitlement to bank/public holidays.
If an employee is given the statutory minimum of 28 days’ annual holiday, they are allowed to carry it forward if there is consent on both sides, however this should be avoided if at all possible as 28 days is the minimum the employee should always be taking, if the employer does not want to fall foul of their legal obligation.

8. SICKNESS ABSENCE

It is common practice to offer a period of full pay for a certain amount of 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 discrimination.

9. PENSION

All UK employers are now required to automatically enrol eligible workers into a pension scheme and pay a minimum level of contributions.
This clause is a generic one merely confirming that the employer intends to comply with its auto-enrolment duties under the Pensions Act 2008.
Further details of this or any other pension offered by the employer can be added if wished.

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

10. DISCIPLINARY AND GRIEVANCE PROCEDURES

Employers should follow the ACAS Code of Practice on Disciplinary and Grievance procedures and ensure that the principles set out are incorporated into the Company’s procedures. The ACAS Code can be found here:

http://www.acas.org.uk/index.aspx?articleid=2174.

A failure to follow the ACAS Code may impact upon Employment Tribunal claims and legal advice should be sought in relation to disciplinary or grievance matters to ensure compliance.

11. DATA PROTECTION

The General Data Protection Regulation (EU) 2016/679 (GDPR) and then the Data Protection Act 2018 replaced the Data Protection Act 1998 on 25 May 2018.

Employers must provide employees with information about how their data will be processed in a privacy notice. This can be attached to the employment contract as a Schedule or handed to them separately.

Since the employer will provide the employee with a privacy notice, it is not necessary to put anything in the employment contract which deals with how the employer will process the employee’s data. However, some employers may want to include a clause such as 11.1 as a simple signposting for the privacy notice.

Clause 11.2 on the other hand provides that the employee must comply with the employer’s privacy policies, whatever they may be.

Please note that if an employer wishes to monitor employees, it must provide information about how they might be monitored in the privacy notice

12. WRITTEN POLICIES & PROCEDURES

Please note that there will often be other documents relating to the employment relationship, principally a staff handbook (see ContractStore document E122) which, amongst other matters, will deal with disciplinary and grievance procedures, 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 E113), 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 well as 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.

13. NOTICE

Employers are legally required to give employees with one month’s service or more but less than two years, a minimum of one week’s notice. Thereafter, employees are entitled to a minimum of an additional one week’s notice for each completed year of service, up to a maximum of twelve weeks’ notice for twelve years of service.

Employees who have been continuously employed for one month or more are legally required to give the employer a minimum of one week’s notice to terminate.

However, whilst employers cannot give less notice than the statutory minimum, it is common to make provision for longer notice periods to ensure some security for employees, although, for junior staff, this does not usually exceed 3 months. Further, employees are normally required to give more notice than the statutory minimum, to allow employers to make provisions and find alterative staff.

Finally there is 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 salary, benefits etc in full during the notice period.

Specialist advice around termination of employment should always be sought when an employer is considering dismissing an employee. There are currently minimum procedures set out in the ACAS Code of Practice which should be followed in relation to disciplinary/conduct and capability matters in order for any dismissal to be fair. Employment Tribunals will take account of a failure to comply with the Code and can increase an award made to reflect such failures.

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. You should ensure that all types of information you wish to protect is listed in this clause.

17. RESTRICTIVE COVENANTS

It is reasonable for employers to include this type of clause in employment contracts so as to take steps to protect legitimate business interests. 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. Restrictions can only go so far as reasonably necessary to protect an organisation’s legitimate business interests. The 6 month limit is a suggestion only and it is essential that specialist legal advice is taken before including any restrictive clause.

18. 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.

19. GOVERNING LAW

This contract is governed by English law and is not suitable for use in other countries.

RETIREMENT

There is no retirement age specified in this contract because from 6 April 2011, retirement ceased to be a potentially fair reason for dismissal. Employers in the UK will be prohibited from issuing new notifications of retirement using the statutory retirement procedure. If an employer does prescribe a compulsory retirement age, he will have to justify it. Employers that do not prescribe a compulsory retirement age must rely on one of the designated fair reasons for dismissal set out in Section 98 of the Employment Rights Act 1996 to achieve a fair dismissal (e.g. redundancy).