An employee must receive a written statement outlining the basic terms of their employment on or before their first day of employment. This is a legal requirement. There is no legal requirement that this written statement must be in the form of an employment contract, but using a written employment contract is considered best practice so there is no confusion about what you and your employee have agreed. This blog discusses when an employee must receive a contract, what happens if you don’t provide your employees with written terms, and whether you must make changes to employment contracts in writing.
By using one of our customisable employment contracts, you can also go beyond the basic written terms of employment required by the law, including terms such as a requirement to keep your confidential information secret, or preventing your employee from working for a competitor for a specified time after leaving your employment. Clear terms like these can really help to protect your business.
When must an employee receive a contract?
Your employee must receive a contract, or at least a written statement outlining the basic terms of their employment, on or before their first day of employment.
There are core terms that must legally be included in the written statement or contract you provide to your employee, for example (but not limited to) the names of employer and employee, start date, pay and working hours. For more information on what particulars of employment must be given to employees in writing, see our recent blog.
To ensure your employment contracts cover all the legally required information, as well as additional terms to protect your business, you can use our templates:
- Service Agreement for a director.
- Employment Contract – Senior Employee.
- Employment Contract – Junior Employee.
- Contract – Casual Worker.
Note that the rules about the information to be included in employment contracts changed on 6 April 2020. If any employees who started working for you before 6 April 2020 request a written statement containing these core terms, you must provide them with a copy within one month of their request.
What happens if I don’t provide my employees with written terms or an employment contract?
If you fail to provide employees with written terms or an employment contract, your employee can discover what their basic terms of employment are and claim compensation from your business by applying to the Employment Tribunal. This is a time consuming and expensive process so you should take steps to avoid this.
Do I have to make changes in writing to my staff contracts or can changes be done verbally?
Subject to the terms of your employee’s contract, you’ll generally need your employee’s agreement to make a change to their contract. Keep an eye out for our next blog which will cover how to make changes to your employee’s contract in more detail.
In terms of recording any changes to an employment contract, the following applies:
- For employees and casual workers, if the change is to certain core terms of work, you are legally required to confirm the changes in writing as soon as you can, and within a month in any event. See our Q&A for a list of the core terms that require this. Note that it is good practice to document any employment changes in writing regardless of whether you are legally required to do so, as this will help to avoid confusion or disagreement.
- For staff other than employees or casual workers, there is no legal requirement to formally record a change, although it is always a good idea to record anything other than very minor changes to staff contracts in writing.
If your employee is promoted, this will amount to a change in the employee’s job title, description or pay. This must be written down. Contracts of all employees and casual workers who are entitled to the National Minimum Wage or the National Living Wage must also be updated when the threshold changes (every April) or when a staff member moves into another tax bracket.
For template letters you can use to confirm changes in writing, see Letter to staff member amending contract, Letter to staff member confirming change of work location, Letter to staff member confirming pay increase and Letter to staff member confirming promotion.
The content in this article is up to date at the date of publishing. The information provided is intended only for information purposes, and is not for the purpose of providing legal advice. Sparqa Legal’s Terms of Use apply.
Marion joined Sparqa Legal as a Senior Legal Editor in 2018. She previously worked as a corporate/commercial lawyer for five years at one of New Zealand’s leading law firms, Kensington Swan (now Dentons Kensington Swan), and as an in-house legal consultant for a UK tech company. Marion regularly writes for Sparqa’s blog, contributing across its commercial, IP and health and safety law content.