Are your contracts up to scratch?

When was the last time you reviewed your contracts of employment or employment policies?

By Karen Credie, director, KMC HR Consulting

The employment contract is a key document; providing the terms under which the employee is to work and, of course, the terms that apply should either party want to terminate the employment.

Have you considered the need for different ‘levels’ of employment contract?

One size rarely fits all; different employees within the business necessarily undertake different functions and their roles and responsibilities can differ dramatically. Have you considered building in restrictive covenants for certain employees or do you require a longer notice period for more senior staff?

Two recent examples of this came to my attention (not involving my clients I hasten to add!). Both cases involve staff who had inappropriately short notice periods in their contracts. This is easily done if you don’t carry out regular reviews.

The first example involved a solicitor who had previously been a trainee at the firm. Upon qualifying as a solicitor, they were kept on by the firm but issued with the wrong contract, requiring only two weeks’ notice. The firm was left with the near impossible task of trying to find a replacement at such short notice, incurring both cost and significant inconvenience to the firm and its clients.

The second example involves an employee in a management role. When joining the business, the role was a new function for which the level of importance and responsibility was underestimated. As such, a contract with only two weeks’ notice, plus one extra week per year over and above two years, was put in place and never reviewed. When this now fairly senior member of staff decided to leave after three years, the business was left with only three weeks to try and find a replacement.

Both of these cases are real examples of why it is vitally important for your business to keep a regular check on the employment contracts held by employees. Throughout the course of their employment, employees’ roles can change significantly and their responsibilities can grow. A regular review of employment contracts can help to avoid such situations, giving your business far greater protection should an employee decide to leave.

Is it time you checked your employees’ contracts? If one of your key team members resigned, would you be left in the lurch?