Contract of employment - a guide for employees

What is a Contract of Employment

A contract of employment is a contract between an employer and an employee containing the agreed terms of employment. There should always be a contract between an employer and an employee – either partially or wholly verbal or in writing. Although verbal contracts have the same status as written ones, they’re harder to prove.

Your employer must provide written details of certain terms and conditions of your employment within two months of your start date. See “Your right to be given a written statement of your employment contract”.

What the employment contract will cover

The contract covers the agreed terms of your employment, with some of these terms being express, some implied, and some inserted by statute. The contract lasts from the date that you commence employment with your employer to the date that your contract terminates (normally if you are dismissed or you resign).

Your right to be given a written statement of your employment contract

You have, under s.1 of the Employment Rights Act 1996, the right to be given a “written statement of particulars” of your employment. This is also known as a “section 1 statement” and must be supplied to you within two months of the date that you started employment with your employer.

The written details of your section 1 statement must include (among other things):

• The names of the employer and the employee;
• The date of which your employment began;
• The amount of pay and how often you will be paid;
• Your hours of work;
• Your job description or a brief description of the work for which you’re employed;
• Terms relating to holiday, including holiday pay and public holiday entitlement; and
• How much warning (notice) you are entitled to if you are dismissed and how much warning you must give to your employer if you want to leave your job

The section 1 statement is not in and of itself the contract of employment but it is strong evidence of what the contract terms are.

What happens if there are problems with your written statement

If no proper written statement of particulars is provided to you within two months of the start of your contract of employment then you can apply to the Employment Tribunal within three months after the date your employment ends for a determination of your particulars.

Which documents could make up your contract of employment

Your contractual terms may be comprised of a number of documents, including:

• Your contract of employment (if applicable)
• Staff handbook
• Collective agreement
• Your offer letter from your employer

The terms may also be verbally agreed or implied by law.

What happens if your employer breaches your contract

Your contract of employment may be broken if you or your employer does not comply with a term in your contract – this is commonly known as a “breach of contract”. For example, if your employer fails to pay you your wages or to pay you for your notice period.

If you believe that your employer breaches your contract of employment then you should normally do the following in the following order:

• Raise the matter informally with your employer
• Raise a grievance with your employer
• Take advice from a specialist employment lawyer on the breach of contract

What happens if you are offered a job and that job offer is then withdrawn by your prospective employer

There are two key issues here:

1. Have you satisfied all of the criteria to be offered employment? (e.g. provided proof of identity, proof of your right to work in the UK, proof of any qualifications/memberships etc.); and
2. Have the parties entered into the contract? (i.e. signed it or indicated an intention to be bound by it)

If the answer to both of the above questions is ‘yes’ then you may be entitled to your notice pay under the contract if your employer subsequently decides to withdraw. However, this will depend on the circumstances.

What happens if your employer wants to change your employment contract

If your employer wants to try and change your contract then the consequences of this will depend upon whether these changes were agreed with you.

If your employer changed your contract with your consent (e.g. your employer increases or decreases your pay with your agreement) then the variation would be unlawful.

If your employer changes your contract without your consent then that variation would not be recognised as lawful. However, if you don’t object to the change within a reasonable period of time then you may be deemed to have “waived” the breach – you must therefore object to the proposed change in your contract as soon as possible.

You should obtain specialist advice from an employment solicitor if your employer is trying to change your contract terms without your consent.

Termination of a contract of employment

Your contract of employment will normally be terminated by you resigning from your job or your employer dismissing you.

If you are resigning from your job then you should normally give the requisite period of contractual or statutory notice, whichever is longer.

Summary dismissal is dismissal without notice and should only be used for gross misconduct, where a situation occurs that is so serious (such as theft, violence, fraud) that the employer gives no notice. However, employers should investigate the circumstances before making a dismissal and follow a fair procedure even in these cases.

What happens if your employer breaches your contract of employment?

If your employer breaches your contract of employment then you could have a claim for breach of contract or constructive dismissal (depending on the circumstances).

Other types of contracts

There are other types of contract that you may be working under in an employment relationship:

1. A zero-hour contract; or
2. A key time contract

You may also be what is known as an “employee shareholder” (although it is not possible to now create such a relationship).

Illegal contract of employment

Your contract of employment may be illegal if:

• You entered into it with the intention of permitting an unlawful act
• Where the contract is expressly or impliedly prohibited by statute; and/or
• Where a contract was lawful when it was made but it has been performed illegally

An illegal contract of employment will be void and the parties will therefore not be able to rely on its terms.