Employee Contracts

What are Employee Contracts?

Employee contracts outline the terms by which you employ they may be verbal, written, implied or a mixture of all three. However, verbal and implied employee contracts can be as binding as a written one, but there terms are difficult to prove in the event of any dispute.  

Employee contracts can be included in a variety of places, such as:

  • A job advertisement
  • Letters and emails between you and the employee
  • A statement of employment or principal payment
  • The company policies
  • The Employee or Company Handbook
  • Other written and verbal agreements

When does Employee Contracts first exist?

The employee contract first exists once the job applicant unconditionally accepts your offer of employment. When a contract of employment comes into existence, this job offer can be implied, verbal, written, or a mixture of all three.

What are your Employee Contracts obligations?

Even if you do not issue written employee contracts, you have a legal obligation to provide most employees with a written statement of main employment particulars within 2 months of the start of their employment. A written statement is not itself the contract but provides evidence of the terms and conditions of employment between you and the employee.

If you issue employee contracts after the employment has started it is important you include a term stating that it replaces all previous discussions/correspondence in relation to terms of employment. Employees must agree to employee contracts or any contractual changes, unless their contracts allow you to make variations. If you fail to get employees' agreement, they could be entitled to sue for breach of contract, or resign and claim constructive dismissal.

Company policy and Employee Contracts

Company policy may not always be contractually binding, unless expressly stated otherwise as part of the employee contracts.  However, policy can be seen as contractually binding via custom and practice where employees follow established working practices over time.

Express terms within employee contracts are those which are explicitly agreed between employer and employee, either in writing or orally. e.g. the employees working hours and pay.  

Implied terms within employee contracts are those not spelt out in a contract, in some cases, these are terms that are considered too obvious to mention. e.g. the employer provides a safe working environment.