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An employment contract is an agreement between a business and an employee. As soon as someone accepts a job offer they have an employment contract, so it’s important to make sure everyone’s clear on the terms.
You can use an employment contract template as a guide to create your own depending on what your business needs. Read on to find out more about what to include in an employment contract, and why it’s important when hiring new staff.
When you take on a new member of staff, a contract of employment sets out the agreement between you (the employer) and your employee. It starts when an employee accepts a job offer, and it remains in effect until the contract ends (when an employee or employer gives notice) or until the terms are changed.
Although an employment contract usually doesn’t need to be in writing for it to be legally valid, it’s advisable to put something down on paper. Employment dispute body ACAS says that simple misunderstandings over what is or isn’t in a contract are amongst the main causes of employment tribunal claims.
It’s important to note that most employees are legally entitled to a written statement of the main terms and conditions of their employment within two months of starting their job. This is likely to overlap with the contents of the contract, as it must include details of things like pay, holidays, and working hours.
An employment contract makes an agreement between you/your company and your employee. It should include an employee’s:
You can use an employment contract template as a guide that you can edit and tailor to your business needs. These templates will usually provide sample wording to help you set out things like:
An employment contract template could also include a suggested outline for describing notice periods, hours of work, salary, performance reviews, holidays, sick pay, pension arrangements, retirement, and other important employment terms.
Where more detailed information is provided in a company policy, rather than the contract itself, a template could give you the option to insert the relevant policy name or refer to the company handbook (if you have one).
Most employment contract templates are fully customisable, with gaps for you to add in the employee’s job title, your company name and address, and the employment and probation dates.
It’s important that you check the template carefully, making sure it applies to your organisation and the relationship you’re forming with your employee. You’ll need to edit the template as necessary, but at every stage you should make sure you’re complying with employment law and workplace regulations. Seek help from an employment law specialist if you need it.
You and the employee both need to sign the contract of employment, and you should give the employee a copy to keep, and keep a second copy for your business records.
Simply Business Editorial Team
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