Back to basics - don't neglect Employment Contracts

When it comes to employing staff, having contracts of employment in place is a fairly rudimentary process. Or so you might think...

Despite the increasingly litigious nature of the workplace, many companies remain relatively relaxed about issuing and keeping record of signed employment contracts.

We're frequently surprised how many businesses we come across that either haven't issued contracts to members of staff, or else haven't been thorough in collecting these back and placing them on file – a process that we recommend is completed within the first 4 weeks of employment.

Aside from having a procedure for ensuring employment contracts are issued and signed, here are some other key considerations surrounding contracts of employment.

  • Whilst you may have a standardised contract, it's highly unlikely that the specific terms will be applicable to each person you employ. You should see that the type of employment contract you issue is relevant to that person's job role and rank within the company.  Should you wind up in an employment tribunal for any reason, the employment contract will be one piece of evidence the Judge will consider - and the contents of the contract will only be enforceable should they be deemed relevant to the individual’s role and level of responsibility.
  • Alongside contracts of employment, having an up to date Staff Handbook is also really important. This should be a detailed document that covers all aspects of working for your company – from lunch breaks to sickness policies, all the way through to misconduct issues and disciplinary procedures.  Employees should all be encouraged to read the Staff Handbook and this document (be it in digital or printed format) should be in an easily accessible location at all times.
  • Another key aspect relating to employment contracts that is so often missed by employers is the need to update them as staff climb the ladder in an organisation. A member of the senior management team needs different consideration to a junior team member – especially so far as notice periods and restrictive covenants are concerned.  Every time a member of staff receives a significant promotion, their contract should be reviewed, with a new one issued where appropriate.  This process is just as important as the issuing of contracts in the first place - especially if access to sensitive business information comes with more senior roles in your business.
Contracts of employment are key to protecting both parties in the employment relationship so spending the time to get appropriate paperwork in place and on record really is fundamental.  This is especially the case now employment tribunal claims can once again be lodged by employees free of charge. The choice between allocating a relatively small amount of time and budget to do a thorough review of employment contracts vs risking the stress, negative PR and potential cost of being taken to an employment tribunal, is an easy one in our book.