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Contract of Employment

A number of employment law rights are only applicable to “employees” as opposed to other types of workers (e.g. Self-employed contractors). Therefore it may be necessary, if there is any dispute about the legal status of the worker, to determine if there is a contract of employment between the individual and the person or organisation providing the work. Like any other contract a contract of employment must contain an offer, acceptance, “consideration”, and an intention to be legally bound before an “agreement” can be classed as a legally enforceable “contract”. In the context of employment the offer is made by the employer and accepted by the employee. The “consideration” is the promise by the employer to provide pay and of the employee to provide his/her services. A common misconception is that unless there is a written document signed by both the employer and employee there is no contract of employment. In fact a contract a contract of employment may be in writing, partly in writing, oral, be partly  implied by custom and practise, be partly implied by common law principles, or comprise a number of documents.

Under section 1 of the Employments Rights Act 1996 employers are obliged to provide written particulars of the individual’s employment. However this document may not itself constitute the whole contract of employment. In addition, for some senior employees the employer may want to impose restrictions on when and for whom the employee works after leaving his/her job, or impose particular restrictions on the use of confidential information. Furthermore there may be specific policies or issues of particular importance to the employer which he/she will want to be able to enforce on the employee. The best way to achieve these aims will be to incorporate these into a written contract with the employee.

There are other obvious practical advantages in there being a single written contract. It can act as a binding authority on what is expected from both the employer and employee. The use of a written contract can also clarify areas that would otherwise be the subject of argument over whether or not a particular term was “implied” or not in the contract. The contract of employment still forms the cornerstone of employment rights, and so it remains the most important document governing how, when, and for whom the employee is to work.

It is important that the employers review the contracts to ensure that they meet their statutory obligations as well as their business needs, otherwise they may be bound to honour out-of-date commitments or find themselves acting in breach of some statutory or regulatory obligation that they were unaware of.


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