What makes an employment contract

Anyone legally classed as an employee or worker has the right to a written document summarising the main terms of their employment. Those legally classed as workers do not have the right to written terms if they started the job before 6 April The legal term for this document is the 'written statement of employment particulars'.

It includes information such as pay and working hours. This document is often referred to as the 'employment contract'. But by law, the employment contract is broader than just these written terms.

For example, employment law is also part of an employee's contract but usually the law will not be written in full in the document.

Find out more about written terms. Information in the contract must follow the law. The exception is any information that must be in the written terms. For example, if the employer pays an employee the minimum wage, they must display that amount in the written document. There are some terms that are so obvious that they do not have to be written such as not stealing from your employer. Even if they're unwritten, these types of terms are often crucial for an effective working relationship between an employer and employee.

To prevent misunderstandings, it's still a good idea for the employer to make the following clear for example, by writing them in an employee handbook :.

This type of term could become part of the employment contract, when all of these apply:. To prevent misunderstandings, it's still a good idea for the employer to put specific custom and practice terms into writing. For example, that getting a Christmas bonus depends on the business's profit in the latest financial year. A written contract is a document that sets form the terms of employment. As explained above, some written contracts are for at-will employment.

Others limit the employer's right to fire. For example, it's not unusual for high-level executives to be hired pursuant to a written contract that obligates them to stay with the company for a set period of time two or three years, for instance and obligates the company to retain the executive for the same period absent an action specified in the contract as grounds for termination.

Grounds might include misconduct by the executive, such as committing a felony or engaging in financial malfeasance; they might also include outside events, such as a sale of the company.

An oral contract is simply an agreement that is spoken rather than written down. For example, an employer might call a successful applicant on the phone, offer her the job, and settle on a starting date, salary, and schedule. Once the employee says, "that sounds great; I accept," there is an oral contract of employment. Oral contracts are just as enforceable as written contracts, but much harder to prove.

If there's a dispute, it will be your word against the employer's. Like a written contract, an oral contract might be for at-will employment or it might limit the employer's right to fire. If, for example, an employer says, "I need a one-year commitment from you; during that time, the company won't fire you as long as you make your numbers," and the employee agrees, the employee can hold the employer to that one-year commitment.

If the employee is fired for any reason other than failing to hit the company's numerical goals, that's a breach of contract. An implied contract is one that has not been reduced to a formal document or even stated explicitly, but is instead implied from a combination of the employer's oral and written statements and actions. Whether there's an implied contract typically comes up after an employee has been fired. The employer argues that the employee was at will, and so can't sue for breach of contract; the employee counters that the employer's actions and statements led the employee to believe that the employee would be fired only for good cause, and were sufficient to create a contract to that effect.

Here are some of the factors courts consider in deciding whether an implied employment contract was created different states apply different standards when considering implied contract claims :.

If you sign an at-will agreement , a court will not allow you to argue that you actually had a contradictory implied contract; the written agreement will be the final word on the subject. The information provided on this site is not legal advice, does not constitute a lawyer referral service, and no attorney-client or confidential relationship is or will be formed by use of the site. The attorney listings on this site are paid attorney advertising.

In some states, the information on this website may be considered a lawyer referral service. Please reference the Terms of Use and the Supplemental Terms for specific information related to your state. Grow Your Legal Practice. Meet the Editors. Types of Employment Contracts. This may happen because the term is: Incorporated by collective agreements agreements with trade unions recognised by the employer. Incorporated by workforce agreements for example, agreements with the whole workforce covering issues such as entitlement to breaks.

Incorporated by statute. Incorporated into individual contracts by custom over a period of time. So obvious that the term is assumed to have been implied. Examples of terms that are implied into a contract of employment include: A duty of mutual trust and confidence between the employer and employee.

The right to receive at least the national minimum wage or living wage implied by statute. The right to a minimum period of notice implied by statute. The UK legal position A contract of employment is in many respects no different from any other contract.

As such, it's governed by contract law, which means that there needs to be: An offer of employment by the employer, which should be clear and unambiguous and may be conditional.

Acceptance of that offer by the employee. Consideration between the parties, for example the work done by the employee in return for the wages paid by the employer.

An intention to create a legally binding arrangement. Types of contract A number of different working arrangements have evolved over the years, with more fluid and flexible models of work accelerating due to technological change. UK law currently recognises three main types of employment status: employee worker self-employed. Various tests are used to decide whether a person is an employee including: Mutuality of obligation - does the employer have to provide work, and does the worker have to take the work that is offered?

The written statement of particulars The essential elements of the written statement of particulars of employment are set out in UK law. Items to be included in the main document : Names of the employer and employee or worker. Date when employment or engagement began.

Date on which continuous employment began employees only. Length of notice the employee or worker is required to give and receive to terminate the contract.

Scale or rate of remuneration, or the method of calculating the remuneration. Intervals at which remuneration is paid, that is, weekly, monthly or other specified intervals. Terms and conditions relating to hours and days of work, including any terms and conditions relating to normal working hours, days of the week and whether hours or days are variable and, if so, how they vary. Terms and conditions relating to entitlement to paid holidays, including public holidays and holiday pay, in such a manner as to allow them to be precisely calculated.

Job title or a brief description of the type of work the employee or worker is to do. Place of work and address of employer or an indication that an employee or worker is required or permitted to work at various locations. Any other benefits including benefits clearly specified as non-contractual which are not covered elsewhere in the written statement. Details of non-permanent employment or engagement e. If the employee or worker is required to work outside the UK for over a month: arrangements for working outside the UK including period, currency of pay, additional benefits and return terms.

Details of any probationary period. Details of training which the employer requires the worker to complete even if the employer does not pay for it. Items that can be provided in a supplementary statement : Terms and conditions relating to incapacity for work due to sickness or injury, including any provision for sick leave and pay.

Terms and conditions relating to occupational pensions and pension schemes can be provided within two months. Any collective agreements, which directly affect the terms and conditions of employment, including who made the agreements can be provided within two months.

Where the individual is required to work outside the UK for a period of one month or more, details of the time they are to work abroad, the currency they will be paid in, any additional remuneration payable and any benefits provided by reason of working outside the UK and any terms relating to their return to the UK.

Any other training entitlement can be provided within 2 months. Disciplinary and grievance procedures can be provided within 2 months. Any other paid leave. While the Employment Rights Act states the items that must be included in the written statement of particulars, employers can refer to their employee handbook or other policies for precise details of issues such as: Documents relating to disciplinary and grievance rules and procedures.

Documents relating to sickness and pensions. Documents relating to the detail of bonus or commission schemes. Collective agreements.