Contract of employment

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The terms that make up a contract of employment can be verbal (somethng you agree by negotiation) or written.  However, employees need a written contract to ensure that terms are clear; and this gives less opportunity for later disputes.  You must make sure that your contracts of employment are legal and meet the needs of your organisation (ie whether you employ permanent, casual, part time or fixed-term staff).

The types of terms used in employment contracts

A contract is made up of two types of terms; `express’ terms and `implied’ terms.

Express terms

Written terms are called "express" terms (see contractual terms definition on wikipedia) and may include the terms in the offer letter as well as the written statement of particulars. The written statement of particulars is actually what most people call the contract. This is the document that you are given to sign when you start work.

Implied terms

Implied terms are terms that are usually not written down, but are commonly understood to be part of the employment agreement. For example to obey reasonable instructions, to be ready and willing to work and to care for the health and safety of others.

Complying with the law

As a minimum the law says that a written statement must be issued to anyone who will be employed for more than one month, by the end of the second month of starting work. A good employer will issue this with the offer letter so staff can see the detail of the terms they are being asked to accept, but certainly within the first few days of employment. Among other matters, it has to include:

• the names of the employer and employee;
• the date of starting and the date continuous employment began;
• the rate of pay, intervals of payment and the method of calculation;
• hours of work;
• holidays and the way in which holiday is accrued during employment and at the end of employment;
• job title or brief job description; and
• place of work or the address of the employer.

Other more detailed information will also need to be supplied. You may also refer the employee to other sources of information but these can only be in respect of your sickness, discipline or grievance policies.

Volunteers, contractors, consultants and interns

Volunteers are not employees and you should give them a different volunteer agreement. Paid contractors or consultants need a contract for service or terms of engagement. For interns you need to first decide if they are effectively volunteers or low paid staff and then issue the correct paperwork.

Useful links

• Business Link provides guides on the content for the offer letter, and how to create a written statement of employment.
• Acas provide practical assistance and sample or downloadable documents.

Have your say

Do you have experience regarding an employee without a contract of employment that you would be willing to share? Do you have any recommendations on what should be included in a contract of employment?

Talk to others on the Employment law and HR forum.