Employment Contracts

Contract of Employment

If you have been offered a new job, you will be given an employment contract, which you will be expected to sign and return before you start work. This contract exists between the employer and the employee, agreeing on the employee’s employment conditions, rights, responsibilities and duties. Employees and employers must abide by the conditions of the contract until it ends (for example, by an employee giving notice or being dismissed), or until the terms of the contract are changed.

After a gruelling recruitment process, reading through your employment contract might not be the most exciting prospect, but by reading the small print, you will have a much better understanding of the nature of your new role. Understanding the legal jargon of your employment contract will help bring clarity to your rights and responsibilities, as well as any perks that come with the job. If you are lucky, having negotiated the terms, you will never have to consult your employment contract again.

A few considerations

But, before you put pen to paper and sign on the dotted line, here are a few considerations to help you ensure your contract is fair.

Job title

Take care to check your job title best reflects the work you will be doing – it could be on your CV for the rest of your career. Being given the wrong title might have future consequences, so negotiate it if necessary.

Job description

If your contract includes a job description, ensure you agree to the summary of your responsibilities. The wider the description, the more flexibility your employer will have to ask you to take on more work or move the goalposts. If your contract does not include one, be in no doubt as to the expectations surrounding the role.

Salary, benefits and bonuses

Make sure that the salary stated in the contract is the one you have negotiated. You should also be clear on how and when you will be paid, as well as any incentives such as an enhanced pension, paid bonuses, health benefits, travel expenses and other reimbursements. Check if bonuses are guaranteed or discretionary. If based on performance, there should be set targets and an understanding of who decides whether the objectives have been met.

Period of employment

Both the start and end dates of the contract need to be clearly stated, unless it is a permanent one. It might stipulate a certain notice period to be given upon declaring it is time to leave the job. Check your notice is not unduly long or short. For most employees, a notice period of one to three months is usual.

Termination of employment

You will not be thinking about leaving a new job from the outset, but that time is likely to come at some point in the future. The contract should prepare for an orderly parting of ways by clearly stating the conditions around which it can be terminated by either party. Before signing the contract, make sure you are aware of these conditions and are happy with them.

Workplace and hours

Working hours should be clearly stated in the form of a daily time period, or number of hours per week you are expected to spend working (including allocated times for breaks and lunch). Negotiate a variation at the outset if necessary, including the possibility of flexible working if that appeals to you. If you are expected to work shifts, weekends or evenings, find out which days and for how long. If you are required to do overtime, will you be paid extra for this? Alternatively, you may be able to explore the possibility of convertible hours you can use in a ‘time-off in lieu’ system. Where your work should typically take place will also be stated on the contract. If you agree to flexible working practices, you have the right to work from home. If you agree to a wide geographical area, your employer will be in a strong position to ask you to work in any location within that locality.

Holidays and sick leave

How many holiday days are you entitled to each year? When does the holiday year start? If you are limited to when you can take your holidays, when are you expected to take the bulk of your time-off? Can you carry days over to the next year? If so, how many? Sick leave can impact other areas of your agreement such as termination, working hours and notice period. Every employee is entitled to statutory sick pay, but many employers offer better terms including a certain number of fully-paid sick days per year. Make sure you know the law regarding holidays and sick leave before you look at this section of the contract.

Pension

It is common for companies to offer a pension to all their employees as a standard part of their contract. It should state whether pension contributions are taken directly from your salary and how much will be put aside. It should also clarify how much your employer is liable to contribute and what aspects of the pension contribution are subject to tax.

Restrictive clauses

Your company will most likely have detailed certain policies around behaviour, rights and proper conduct for you to consult and follow. Restrictive clauses take effect after the termination of employment, protecting the employer’s business, its clients and other employees. Knowing the terms is important because they could restrict you from taking jobs in the future. The usual clauses seek to prevent you from dealing with clients and suppliers of your former employer, working for a competitor for a certain period of time after you have left, or poaching employees from your former employer. Your contract will also address copyright and confidentiality issues where relevant, putting limitations on what information can be shared by you outside the company. Be careful to follow these rules to avoid any future legal proceedings.

Update your Contract

As a final point, it is wise to keep your contract updated, especially if you gain a promotion, decide on new terms or switch job roles. Remember that your employer cannot force you to sign a new contract, so be clear about all the terms and conditions before you agree to anything you might live to regret.