Contract – Employment Contract
Legally you have to give all new employees a contract within 2 months of them starting.
On a purely practical level, it ensures that they know what is expected of them, i.e. their hours of work. They also know what they are entitled to, i.e. holidays, any sick pay, etc. This frees them up to concentrate on doing the actual work you hired them for!
If you don’t give them a written contract, then the statutory rules apply. These rules are to protect the employee not the employer. Therefore you may not be in the best position to do what has to be done if you rely on an oral contract. This applies to handbooks and policies as well. In your disciplinary policy you need to say that you won’t follow the ACAS guidelines if someone has been with you for less than one year. If you don’t have this written down (and have given it to the employee) then you have to follow the guidelines – what a hassle!
A recent case was about an employee who only had an “oral” employment contract. The employer had to pay her for all her unused holiday for the whole of her employment. Normally if you don’t use it, you lose it. However because the Tribunal felt that the employee hadn’t known what would happen to her holiday if she didn’t use it – she had nothing in writing telling her this – ignorance was bliss in this case. The employer had to pay out 131.5 days holiday to her.
On top of all this, if an employee brings a claim against you and is successful at tribunal, you may have to pay them more money because you haven’t given them a written contract.
The extra money they could be given will usually be two or four weeks’ pay. To lessen the amount, make sure you give them a written employment contract.
And make sure you let staff know, in writing, of any changes to their working conditions four weeks before you change them!
“Gap HR gives me peace of mind. They are quick to pass on relevant information even for things I hadn’t even thought about and are relevant to my business – including extra bank holidays and staff retirement issues. Working with Gap HR takes away the worry, allowing me to get on with running my business, knowing that my staff are well looked after. “Appletree Marketing