Successful employment contracts are a key tool in an employer’s armoury. They create a smooth working relationship between employer and employee that helps businesses stay on track with minimal disagreements and disruption. Drafting a strong contract isn’t necessarily difficult or complex. It simply means providing clarity, avoiding assumptions, and helping team members stay aligned with expectations.
Without job contract agreements, companies are left with informal deals and ineffectual paperwork. Ensuring legal accuracy is vital whether you require a basic employment contract or something more bespoke. That’s why we have provided this quick checklist for employers like you. It can inevitably only be a high-level introduction to the topic and should not be considered formal advice, but we trust it proves useful.
What Is an Employment Contract?
An employment contract is typically a binding agreement between an employer and a staff member outlining the terms of their working relationship, including conditions, rights, responsibilities, and duties. These agreements can be verbal—the archetypal deal ‘done on a handshake’ still counts technically—but having a written employee contract agreement is strongly recommended to avoid costly misunderstandings and disputes.
A solid work contract should lay out details such as duties, wages, hours, and benefits. Clauses take effect from day one of employment. Employers are given a two-month grace period to provide a written contract, though issuing one earlier and getting it signed as part of an onboarding process earlier is considered best practice.
Essential Clauses Every Employment Contract Should Include
The following ten points are not intended to be a complete list. Every business is different and all employers will have differing expectations of their employees. It is, therefore, essential to consider each contract as unique. By all means, use the below as guidance, but it is wise to seek professional employment contract advice tailored to your specific requirements if you need support.
1. Job Title & Role Responsibilities
Your employee contract should define the employee’s official title and list their primary duties. It may include or be linked to a job description. If roles are not clearly defined, confusion abounds, and performance expectations are hard to meet if they are not expressed in detail.
2. Salary, Benefits & Payment Terms
Any work contract should spell out pay rates, salaries, remuneration, bonus structures, and overtime policies. Mention pensions, insurance, or other perks. Transparency in a job contract agreement fosters trust and sets clear financial expectations.
3. Working Hours & Flexible Working
Any contract document you ask employees to sign must clarify when they are expected to work, including start and end times and breaks. If your firm supports flexible working, the employment contract should explain how requests are to be made, responded to and managed.
4. Probationary Period
If you plan to assess new hires against performance in the early part of their time with you, any contract needs to include a probation clause. In a standard employment contract, probation periods typically last three to six months. It is essential to include review procedures, too. Any employee assessment should be done fairly and transparently. Nobody likes surprises.
5. Holiday & Sick Leave Entitlement
Most employees, even those on short-term contracts, are entitled to minimum leave entitlements and pay in the event of sickness. It’s, therefore, essential that any employee contract agreement you draft includes how many days or hours of annual holiday employees receive, any rules about time off in lieu and rest days if appropriate, alongside any sickness policies and entitlements.
6. Termination
If you are an employer, it is your responsibility to document how much notice is required if either party wants to end the work contract and cease employment. A contract should also explain what circumstances could justify early termination.
7. Disciplinary Action
Not every contract runs as planned. There may be circumstances when an employee’s performance, practice or behaviour works against a company’s interests. To minimise the loss in these circumstances, employee contracts ought to include corrective and disciplinary clauses.
8. Confidentiality & Non-Disclosure
A clear and transparent non-disclosure agreement clause in an employee contract is a great tool for keeping commercially sensitive or private information from reaching the public domain. Such clauses can protect you throughout a period of employment and, to a degree, after the person leaves your team. You can read more about this in our dedicated non-disclosure blog.
9. Restrictive Covenants & Non-Compete Clauses
If you’re in a competitive marketplace, it is sensible to include contract terms that prevent an employee from providing an advantage to your rivals by working for them, sharing their expertise or even poaching clients. These clauses must be fair and reasonable to be enforceable under the law.
10. Data Handling
Including a data protection clause in employment contracts helps employees understand how their data will be processed and by whom, fulfilling the employers’ GDPR obligation.
Common Mistakes to Avoid When Drafting an Employment Contract
If you’re writing a contract, it is easy to fall into bad habits. We’ve listed three common types of mistakes below. You would be surprised how many employers make easily avoidable blunders.
Unclear language
Poor writing, vagueness, paragraphs that can be misinterpreted, and the use of obtuse ‘legal-ese’ can impact the effectiveness of a contract. It is easy to get wrapped up in detail, too, so it is essential you keep an eye on your overall goals as you draft any of the clauses we mention above.
Outdated Law
Employment law shifts over time, so it is vital to review contracts to ensure they are renewed, refreshed and kept in line with current legislation. This work is challenging to do if it’s not your specialisation. Keeping yourself informed about new employment rules can be a full-time job in itself.
Neglecting non-permanent roles
It is tempting to view short-term and interim workers as somehow less deserving of attention than permanent employees. However, any temporary employment contract or part-time employment contracts still require full legal consideration.
Employer Obligations Under UK Employment Law
We have used the term UK employment law to describe the employment framework created by the UK Government. This framework is largely applicable, despite some differing legal technicalities, across England, Wales, and Scottish devolved authorities. Northern Ireland’s employment law is devolved to a greater degree, but the principles remain similar.
To comply with legal best practices, UK businesses must give new hires a written summary of their job terms as a minimum.
A basic employment contract should include the following as a starting point. This ensures employees have the information they require to work for you.
- Position and title
- Start date and hours
- Pay details
- Holiday rules
- Location and conditions
- Exit notices
Contract agreements must also adhere to Employee Law in matters relating to fairness and equal opportunities. Ensuring full compliance with UK Law, or law under any other jurisdiction for that matter, can really only be guaranteed by requesting formal advice from suitably qualified professionals.
How to Ensure Your Employment Contract Is Legally Sound
There are key steps to producing a sound document. We’ve shared three in this blog. Here’s how to make sure your employment contract holds up:
Work with experts: Even if you start with a generic template or with some of the sound contracting advice available online, specialist employment contract lawyers can customise documents to match your company’s exact needs. They’ll also spot any errors or omissions, potentially saving future angst or costs.
Audit annually: Even a solid standard employment contract needs updates as external factors such as new rules and regulations evolve. Your business will change too. A contract that was suitable in 2024, may not be in 2025.
Adapt for each role: One-size-fits-all, sadly, doesn’t work for employee contracts. Temporary employment contracts and part-time employment contracts, for example, are likely to require different clauses to full time employment. Your senior management contracts may look different from an entry level team member, too.
Strong Employment Contracting
A strong employment contract isn’t just about the legality of managing employees —it’s about protecting your workforce and operations from unwanted disputes, disruption and costs. Poor contracting can lead to unhappy employees who may, ultimately, vote with their feet and leave your business. Alternatively, a weak contract can leave you unable to manage an under performing colleague – who won’t leave!
The good news is Jamieson Law offers specialises in employment contract advice, and our experienced professionals support UK employers achieve success every day. Want peace of mind? Contact Jamieson Law Employment Law Services today to speak with our expert employment contract lawyers.
Frequently Asked Questions
A complete job contract agreement covers the role, salary, hours, benefits, leave policies, notice periods, and clauses like non-disclosure agreements and post-employment restrictions.
Yes. UK employers must provide a statement of job terms, which acts as a formal employee contract agreement. Such statements typically take the form of a written employment contract for both parties to sign.
Yes, but only with mutual agreement. All proposed changes to the employment contract should be confirmed in writing. A minor change could be marked with a simple letter. A major change or role needs careful management and may require further legal advice to avoid complications.
Most standard employment contracts continue on an open-ended basis to last as long as the employee is with you. However, a fixed-term or temporary employment contract should have a clear end date.
