A contract between an employer and employee or worker is a legally binding agreement. This could be a 'contract of employment' or a 'contract of service'.
A contract can be agreed verbally or in writing.
All employees and worker have the right to a written document summarising the main terms of their employment 'written statement of employment particulars' or employment contract. It includes information such as pay and working hours.
Contracts of Employment
Terms of a contract
'Custom and practice' terms are often unwritten. This type of term could become part of the employment contract, when all of these apply:
- It is generally well-known in the business or industry, usually over a period of time ('notorious')
- It is reasonable
- It is certain
To prevent misunderstandings, it is a good idea for the employer to put specific custom and practice terms into writing.
Terms restricting an employee's actions
An employer might state that an employee cannot take certain actions during their employment or once it ends. For example, after the employee has left, preventing them from contacting the business’s customers for a certain time.
These types of terms are known as 'restrictive covenants'. They will not usually be legal unless they're clear, specific and time restricted. Even then, this area of the law can be complex.
Other Key Employment Contract Clauses
Key employment contract clauses designed to protect the employer typically include:
Intellectual Property (IP): Employers are not automatically entitled to IP protection for business information related to clients, designs and copyrights. Therefore, if they have Intellectual Property that requires protection, they will have to spell it out in the employment contract.
Employee Duty of Confidentiality: Similar to the Intellectual Property clause the Employee Duty of Confidentiality clause binds the employee from divulging trade secrets, proprietary know-how, customer information or information about suppliers for a given period of time.
Monitoring of Employee Communications: Employers do not have the statutory right to monitor employee emails and messages, even if they are on the work system. If they want any degree of access to such communications, they will need to specify it in the employment contract.
Garden Leave: In some cases, employers may want employees who have given notice they are leaving to stop coming into the office and work remotely until the termination is final. A Garden Leave clause enables the employer to protect their interests without breaching restrictive clauses in the employment contract.
Pay in Lieu of Notice (PILON): With a PILON clause, an employer can pay an employee for their period of notice instead of requiring them to work during their notice period. In such cases, the contract of employment will end immediately instead when the notice period would have ended.
Employment Contract Review
Frederick Solicitors provides an expert employment contract review services for businesses that can ensure you are presenting a contract to a new hire that is in your company’s best interest. This kind of timely legal advice can save a business from the type of long-term expenses and hassles that crop up due to poorly considered employment contracts.
Employer Contract Lawyer
Well-crafted employment contracts can be of immense value, while poorly considered contracts can create myriad short and long-term problems. Don’t make the mistake of drafting and signing an employment contract, or contract of service, without first having it thoroughly examined by an Employment experts at Frederick Solicitors.
Speak to us, we can help explain your options.