Contract of Employment – are they just a worthless piece of paper or a great tool for employers?
We take a closer look at the main points you need to consider when drafting and varying contract terms and conditions.
Do I need to provide my employees with a written Contract of Employment?
Contrary to popular belief, a Contract of Employment does not have to be in written form to be legally valid. However, if you entered into a Contract of Employment verbally, you are legally required to provide each employee whose employment is to continue for more than one month with a ‘statement of written particulars of employment’ within two months of the employee’s start of employment.
The statement should include, amongst other elements, the following:
- The employer’s name and address
- Employee’s details – name, job title, job description, start date
- Salary, including payment intervals (e.g. weekly, monthly)
- Working time and holiday entitlements
- Notice periods
- Pension schemes
- Any applicable collective agreements
It is strongly advised to have a written Contract of Employment, laying down the rights and obligations of both the employer and the employee.
You should also have a written Employee Handbook, which provides other important information including disciplinary and grievance procedures and rules on sick leave, dress code and Health & Safety.
Can I agree with the employee whatever I want?
No. The law establishes certain minimum duties and obligations that all employers must abide by. For instance, you cannot agree with an employee that you will pay them below the applicable national minimum wage. The law will override the agreed terms that do not fulfil statutory duties.
Every Contract of Employment contains certain terms that are ‘implied’. This means that even though they are not written down, they still need to be followed. For example, even if it’s not mentioned in the contract, employers still have a legal duty to provide a safe working environment for all their workers.
Why might I want to change an employee’s Contract of Employment?
You may wish to change an employee’s Contract of Employment for a number of reasons, such as changing financial circumstances of the company, a business restructure or to harmonise contract terms across different teams or divisions. You may wish to change an employee’s duties, hours, pay rate, job title or place of work.
Do I need to consult the employee before implementing the change?
In most cases employers will need to consult before making a change to a Contract of Employment. Making changes without the agreement of the employee may be considered a breach of contract. An employer who wishes to make changes should consult with the employee or, if applicable, their trade union or other employee representatives. It is likely the employee will be more receptive to the change if you explain the reasons and allow them to express their views and offer alternative suggestions.
However, in practical terms, there are instances where contractual terms will change from time to time without needing formal consent from the employee. A good example of this is pay rises. Rather than varying the contract, you can send the employee a brief note about their pay change and keep a copy for their staff file. An employee is not going to complain about a positive change to their terms.
Do I need to provide employees with information about the change in writing?
Where it has been agreed to vary the contract and the change relates to any of the particulars in the written statement, the employer should give written notification of the change to the employee. This must take place within a month of the change taking effect. If you change terms and conditions that are not included in the written statement, you must inform your employees of where they can access information about the change, for example in the Employee Handbook or on your intranet.
What happens if an employee does not want to accept the change?
You should try to be flexible and be willing to compromise. If after lengthy consultation you cannot reach agreement, you can serve the individual employee notice that you will terminate the existing contract and offer a new contract with the new employment terms and conditions. If you wish to do this with 20 or more employees, you have an obligation to consult collectively with employee representatives or, if applicable, trade union representatives.
For further advice, please contact the British Sandwich Association Advisory Service on 0845 226 8393 and quote “British Sandwich Association” and your membership number. Alternatively, please email