Do I need to give every employee an employment contract?
An employment contract isn’t given to an employee; a contract will exist as soon as someone accepts your job offer. You are, however, legally required to give every employee a written statement covering specific terms and conditions within two months of the commencement of their employment. If you fail to provide such a statement, the employee may refer the matter to an Employment Tribunal to decide what terms and conditions they have.
As far as compensation is concerned, there is no freestanding right to compensation. However, if an Employment Tribunal finds in favour of the employee under another type of claim (e.g. unfair dismissal or sex discrimination) the Employment Tribunal may also award the employee 2 – 4 weeks’ pay for failing to provide a written statement (this is capped at the normal maximum weeks’ pay. This is unless there are ‘exceptional circumstances’ which make an award or increase unjust or inequitable.
What terms are to be included in the written statement of terms and conditions?
The following terms must be included:
Also to be included in a written statement or to be made available in readily accessible documents are the following terms:
Are employment contracts usually the same for part-time employees?
Yes. Part-time employees have the same rights as and are entitled to be treated no less favourably than full-time employees. For example, they have the right to the same benefits and terms of employment as similar equivalent full-time employees, unless the failure to provide this benefit can be objectively justified. The rights and benefits can be adjusted pro-rata.
Can I change the terms of an employment contract?
Yes – if you have reserved the right to amend the terms within the contract itself. However, you may not act in an arbitrary or unreasonable manner. If you have not reserved the right to amend the terms then the answer, strictly speaking, is no, unless it is with the employee’s agreement or consent. The outcome will depend upon the nature of the change and how serious it is. For instance, a cut in pay rates normally justifies an employee resigning and claiming constructive dismissal it is not agreed upon firstly with the employee.
When may an employee claim constructive dismissal?
An employee may treat themselves as constructively dismissal if you, as the employer, have committed a serious fundamental breach of contract.
For constructive dismissal: -
Can I use an employment contract to protect the company against an ex-employee who has resigned or been dismissed?
If you include a restrictive covenant and a clause protecting confidential information in the employee’s contract of employment, this allows you to prevent competition from or the exploitation of commercially sensitive information by an ex-employee after they have left their employment. In the absence of such provisions, an ex-employee may compete with you, solicit your customers or use confidential information and try and poach your staff.
For a restrictive covenant to be enforceable, the following conditions apply: -
Do I need to consider special terms for senior employees and directors?
You may wish to consider putting a longer notice period in the contracts of senior employees and directors. This is in order that you may adequately prepare for their departure and also to allow sufficient time to find a replacement. You may also want to reserve the right to place the employee concerned on garden leave during the notice period. Given that the senior employees or directors may have access to commercially sensitive confidential information and customer contact, it would be prudent to consider whether restrictive covenants should also be included in their contracts of employment. This would deal with the non-solicitation of clients and/or employees. You may also wish to consider detailed confidentiality clauses in their contracts of employment in addition. Contracts of employment senior employees and directors (usually known as ‘service agreements’) may also contain clauses relating to commissions or bonus payments. These clauses need careful drafting.
What is a settlement agreement?
A settlement agreement is a legally recognised agreement that usually terminates an employee’s employment and finalises the terms of settlement between an employee and the employer. The employee agrees to sign away their rights to bring complaints to the Employment Tribunal and Courts in exchange for a ‘full and final’ financial settlement from their employer.
What are the usual time limits for an Employment Tribunal claim?
Most claims to Employment Tribunals must be made within three months. The three months begins with the date that the employment ended or when the matter being complained of happened, generally speaking. The Claimant is now required to contact ACAS before bringing a claim in the Employment Tribunal. ACAS will then attempt early conciliation. If the Claimant contacts ACAS within the time limit then this will ‘pause’ the time limit for a period of one month whilst ACAS tries to conciliate the claim.
What is redundancy?
A redundancy situation will exist where: -
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