Employment contracts are incredibly important to any workplace as they form the foundation of the relationship between employee and employer. In this article we will be providing an insight into the 5 most important reasons for employment contracts.

They are a legal requirement.
Since April 2020 it is a legal requirement to provide to a new member of staff with a written statement, on or before the first day of employment, with the following information;

The employer’s name
The employee’s or worker’s name, job title or a description of work
Start date
How much and how often an employee or worker will get paid
Hours and days of work and if and how they may vary (also if employees or workers will have to work on Sundays, during the ‘night period’ or take overtime)
Holiday entitlement (and if that includes public holidays)
Location of where an employee or worker will be working and whether they might have to relocate
If an employee or worker works in different places, where these will be and what the employer’s address is
Duration of the contract, permanent or fixed term and what the end date is if it’s a fixed-term contract.
How long any probation period is and what its conditions are
Benefits (for example, childcare vouchers and lunch)
Obligatory training, whether or not this is paid for by the employer
It must also include the date any previous job started if it counts towards a period of continuous employment.

Working abroad
If an employee or worker has to work outside the UK for more than a month, the principal statement must also include:
How long they’ll be abroad
What currency they’ll be paid in
What additional pay or benefits they’ll get
Terms relating to their return to the UK

Other information the employer must give on day one
On the first day of employment the employer must also provide the employee or worker with information about:
Sick pay and procedures
Oher paid leave (for example, maternity leave and paternity leave)
notice periods

Although this information can be provided in a written statement, with other contractual terms to be provided later many businesses prefer to provide everything on an employment contract at the outset

Outline the working hours involved in the job
This enables an employee to see if the working hours suit them and be prepared to adapt their lifestyle to suit the demands of their employers. If an employer has some special requirements such as overtime, shifts, or a requirement to attend the office on certain days if they are hybrid working an employment contract can clearly state this expectation.

Allows an employee to know their roles and responsibilities in the workplace
In a contract of employment, a job description allows employee to know their roles and responsibilities within the workplace. This is beneficial because it enables an employee to understand the nature of the job, whether it is right for them and if necessary seek the correct training.

Employment contracts provide information on bonuses and pay deductions.
Including information on bonuses and deductions in a contract is incredibly important. Firstly, bonuses whether financial or not, are a great way in motivating employees and it will clarify the terms of any bonus or commission structure. Equally important is providing a clause that allows deductions for wages, without this it may well be unlawful to make any deductions, particularly at the end of the relationship if the employee owes the business any money or ahs taken too much holiday and needs to reimburse the business.

Set out other contractual terms.

By sending out a contract at the time you are offering the job it allows you to set out any other contractual terms such restrictions on working for competitors if the employee leaves, contractual holiday or sickness allowance, who to contact when they are off sick, how to apply for holiday, any car provisions, length of probation and notice periods and any other terms that are important to the employer.

By providing a contract during the job offer stage demonstrates to a potential new employee that the business, is organised, professional and is keen for the candidate to join. It portrays a good first impression. Equally, it can help secure the right person quickly as they will feel that they have made a commitment to you and the formalities of agreeing a start date and the onboarding process can start.