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Drafting a contract of employment

Drafting a contract of employment

Drafting a contract of employment that fully reflects the needs of your organisation is critical to its success, but you may wonder why drafting a contract of employment properly is so important, and not know what you should consider when looking for a provider?

Why is drafting a contract of employment carefully so important?

1. Employees can claim compensation for not having a contract of employment, or for having one which does not contain the required information.

 

Each organisation has its own view of contracts. Some may have had a contract of employment drafted but never really looked at what it contained or considered whether it is still serving the intended purpose, other workplaces may be fully aware of what is in the contracts that they have had drafted as they are reviewed regularly. Whatever your attitude to contracts of employment they are a legal requirement. A contract of employment must contain certain information. If such information has not been included, and the person brings a claim at an Employment Tribunal, such as discrimination, compensation can also be awarded for not having a contract in place, or for not providing the required information in the contract of employment.

The points below do not necessarily relate to the required elements, as the article is focused on what a difference effective drafting of an employment contract can make to an organisation, whether that information is required or optional.

2. Probationary periods

 

It can often be difficult to predict how a new recruit will turn out, and specifying a probationary period is common. However, some organisations have contracts which do not have a probationary period, or perhaps there is a short one because the organisation was unsure what length of time would be best. Setting probationary periods, and the targets which determine whether the required standard has been met, are tasks that require careful consideration to ensure the desired result is achieved.   

 

3. Requirement to travel

 

A need to travel a considerable distance is necessary for many jobs. Perhaps there is a need to travel to multiple locations. If there is such a requirement does the contract make reference to it? If it is needed, how should that requirement be referred to in order to best achieve the needs of the organisation and ensure that staff are aware of what the role requires? Seeking advice regarding this may be beneficial, as amending contracts later to include a requirement to travel may cause objections to be raised, and distress caused, unless it is handled in the right way.  

 

4. Sickness absence

 

How would your organisation wish to be notified of a sickness absence? If a procedure is not laid out in the contract it may well cause disruption as the person is unaware of what they should do in terms of when to report their illness by, and whom they should notify of the situation.

 

5. Notice periods

 

What would happen to your organisation if a senior figure left unexpectedly giving little or no notice? If there is either no contract in place, or the amount of time specified is inadequate, that is likely to have a substantial impact on what the organisation is able to achieve because there is no chance of filling the gap before the person leaves. It can be tricky to decide what the right notice period would be, but it is important that organisations have sufficient advice to make an informed decision.

 

6. Confidentiality

 

How is a person expected to treat information? What does the organisation regard as confidential? It is likely that views may vary from one organisation to another. However, the key is to ensure that any wording meets the needs of your organisation and leaves staff in no doubt as to how they should act in particular circumstances, and the consequences that may arise if those rules are not followed.

 

7. Deductions from wages

 

There may be occasions when, for example, an employee causes damage to company property, or leaves part the way through a training course that their employer paid for. The circumstances when reimbursement can be sought, and the extent of it, would need to be made clear before the arrangement was entered into, such as within the contract, otherwise such deductions could be found to be unlawful.

 

8. Misconduct

 

People often have differing views on what is and what is not acceptable. Even when there is agreement that certain conduct is unacceptable at work there is likely to be disagreement regarding what the appropriate response should be. If no guidance is provided, individuals are unlikely to know what consequences they are facing by acting in a particular way, and there is likely to be an inconsistent approach, with the outcome depending on the outlook of the particular manager dealing with the situation.

The approach that an organisation adopts with regard to misconduct depends on its values and culture. Whatever is decided on, having expectations laid out will remove any doubt about the standard of behaviour required. Training for managers on how to run investigation meetings or disciplinary hearings would strengthen the aim of providing a consistent and fair approach.

 

9. Reduction in work

 

The pandemic has shown us all that things can change in ways that cannot be predicted or prepared for. After all, lockdowns meant that entire industries could not operate. What would happen if there was a sudden and unexpected reduction in work, meaning there was little or no work for staff to do? Would the organisation still have to pay the individual their full contracted hours? What process would the organisation need to go through to get the desired outcome? The answer to all those questions is the same: it all depends on what is contained in the contract.

 

10. Post employment restrictions

 

How would it feel if an employee left and then set up in competition with his former employer next door taking a number of workmates to support him with the new venture? To make things even worse the individuals involved in the new venture also announced the development on social media and attempted to take clients from their former employer. Yes, this is an extreme example, but those situations could happen unless the employment contract is drafted in a way that prevents it.

What to consider when having a contract of employment drafted for you

1. What is done for you?

 

Some providers expect to have conversations with their customers in order to understand their needs and requirements and draft a contract accordingly. On the other end of the spectrum, other providers expect clients to fill out the contract themselves without any guidance or advice. Whatever the option chosen it is important to know what you are going to get and what is expected from you.

 

2. What’s the price?

 

 Does the provider offer contract drafting as a fixed price, or is it necessary to commit to a longer term arrangement? Are there any additional charges for amendments or for providing advice via email or over the phone?

 

3. Is customisation possible?

 

Does the provider allow customers to discuss their needs over the phone or via email? Will the provider give advice and lay out the options to tackle the issues of concern? Will these preferences be reflected in the contract? If so, will there be an additional charge for the amendments? Perhaps there is not a facility to request changes at all. Is there an opportunity to review the draft and make comments before it is signed off?

Plotkin & Chandler works exclusively in the areas of HR and employment law. Whether you would like assistance drafting a contract of employment or you are seeking to have your existing arrangements reviewed. Please contact us on 020 3923 8616 to discuss your needs and requirements or email us on info@plotkinandchandler.com

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