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Employment Contracts

Employment Contracts

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Employment contracts
All employees have an employment contract with their employer, although it might notbe in writing. If you don’t have a written employment contract, your contract would haveautomatically been created when you started to work for your employer.
What is an employment contract?
An employment contract, or ‘contract of employment’, is an agreement between an employer and anemployee which sets out their employment rights, responsibilities and duties. These are called the ‘terms' of the contract.Your employment contract doesn’t have to be in writing. However, you are entitled to a written statement of your main employment terms within two months of starting work.The employment contract is made as soon as you accept a job offer. If you start work it will show that youaccepted the job on the terms offered by the employer, even if you don’t know what they are. Having awritten contract could cut out disputes with your employer at a later date, and will help you understand youremployment rights.You and your employer are bound to the employment contract until it ends (usually by giving notice) or untilthe terms are changed (usually in an agreement between you and your employer).
Terms of an employment contract
The terms of your employment contract could be of several different types, some of which do not need to bewritten down. You should be aware of what the terms of your employment contract are, so thatyou understand some of your employment rights.
Written statement of employment particulars
If you are an employee who has been working for your employer for longer than one month, you have theright to receive a written statement of employment particulars. This must be provided by your employerwithin two months of you starting, even if you are going to work for them for less than two months. Thewritten statement will set out some of your main employment rights.
Contract to provide services
If you have a ‘contract to provide services’ or a 'contract for services' with someone, then this is differentfrom an employment contract and generally means you are self employed.A contract to provide services is an agreement between you and another person to undertake some work forthem (for example paint their house). You do not become an ‘employee’ for this person - you just providethem with a service.If you are a temporary agency worker you may be contracted with your agency under a 'contract forservices'. Your agency, as an employment business, will be obliged to provide you with a written contract.
What to do if you have a problem
If you have a problem you should first try to sort out the problem with your employer. You could contact theAdvisory, Conciliation and Arbitration Services (Acas) for help, or visit the employment useful contactssection for other contacts. If you have an employee representative, such as a trade union official, they maybe able to help.If you cannot resolve the problem with your employer you may be able to make a claim to an EmploymentTribunal
Employment contract terms
The terms of an employment contract set out what you and your employer can expect of each other. There are several different types and some do not need to be written down inyour employment contract.
Where do contract terms come from?
Contract terms can come from a number of different sources; for example they could be:
verbally agreed
in a written contract, or similar document
in an employee handbook or on a company notice board
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in an offer letter from your employer
required by law, for example, your employer must pay you at least the minimum wage
in collective agreements (see below)
implied terms (see below)If there's anything in your contract that you're unsure about, or which is confusing, ask your employer toexplain it to you.It should be made clear what is a legally binding part of your contract and what is not. The legal parts of acontract are known as 'terms'.If either you or your employer breaks a term of the contract, the other is entitled to sue for breach of contract.
Collective agreements
Employers sometimes make agreements with a trade union or staff association. These are know as'collective agreements'. Your contract should make it clear which agreements apply to you and who cannegotiate on your behalf. These agreements can apply to you even if you're not a member of the tradeunion or staff association.
Implied contract terms
Implied terms aren't written down anywhere, but are understood to exist. If there's nothing clearly agreedbetween you and your employer about a particular matter, then it may be covered by an implied term.Terms are implied into a contract for a number of reasons.
Terms that are necessary to make the contract work
Terms can also be implied because they are necessary to make the contract work. The most important of these is the 'duty of mutual trust and confidence'. This means that you and your employer rely on eachother to be honest and respectful. For example, your employer trusts you not to destroy company property,and you trust your employer not to bully you.
Terms that are obvious or assumed
Some terms are included either because they are so obvious that it is not felt necessary to write them down,or because it will be assumed that such a term exists.An example of this might be where a contract provides for sick pay without saying how long it will be paid. Itwill be assumed that it is not intended to be paid forever.
Terms implied by custom and practice
These are specific to an employer or kind of work. They are arrangements that have never been clearlyagreed but over time have become part of the contract.For example, you might get a Christmas bonus every year, or the business might close early on particulardays.If a company practice has become a part of your contract then your employer must stick to it, and cannotnormally change it without your agreement.Whether a particular practice has become a part of the contract can be very difficult to decide. There is nofixed time limit after which something is definitely part of the contract.Among other things, it depends on:
how seriously it has been treated (has the employer acted like they have a choice?)
how clear it is (has the employer treated the matter differently each time?)
how long it has been in place
Changes to employment contracts
Sometimes it's necessary to change the terms and conditions of an employment contract.Find out why your contract might be changed, what your rights are and how to avoid orresolve problems in making these changes.
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What or who can change a contract of employment?
Either you or your employer might want to change your employment contract. However, neither you or youremployer can change your employment contract without each other's agreement. Changes should normallybe made after negotiation and agreement.Changes to employment contracts could be made by:
agreement between you and your employer
collective agreement - this is a negotiation between your employer and a trade union or staff association
implication - that is through a change in long standing custom and practice (for example if youremployer allows all employees a day off each year for New Year's Eve)If a collective agreement makes a change to employment contracts, the change will still apply to you evenif you are not a member of the trade union or staff association.
Reasons for changing an employment contract
An employer's need
An employer sometimes needs to make changes to working practice because of economic circumstances.The business may need to be reorganised, moved to a new location, or there may need to be changesbecause of new laws or regulations. Things that might change include:
rates of pay
working time (for example, longer or shorter hours, different days)
your duties and responsibilities
the duties and responsibilities of your immediate boss
the location of where you workYour employer might need to make a change to correct a mistake in drawing up the contract. Depending onthe situation, it might be in your best interests to allow the mistake to be corrected.In some circumstances, action like a demotion or a pay cut might be authorised as a disciplinary measure.
Employees' need
Employees might also ask to change the terms of their contract. For example, you might want:
better pay (you don’t have an automatic right to a pay rise, unless it’s in your contract)
improved working conditions
more holiday
different working hours
to work flexible hours
to work part-time
Flexibility clauses
Your employment contract may include 'flexibility clauses'. These give your employer the right to changecertain conditions (for example, shift patterns) or there may be a 'mobility clause', allowing changes to your job location.A flexibility clause that is vaguely worded - for example, 'the employer reserves the right to change termsfrom time to time' - cannot be used to bring in completely unreasonable changes. This is because there's an'implied term of mutual trust and confidence' in all contracts that requires the employer not to actcompletely unreasonably. There is more information about implied terms in the 'Employment contract termsarticle'.
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