Business Owners’ basics on Employment Contracts

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Not having up to date contracts for your employees is a huge business risk and is against employment law.

All employees must receive their contract of employment within 8 weeks of starting within your business. As of April 2020 all employees must have a contract of employment on or before their first working day.

We provide business owners, directors and employers with up-to-date advice on employment law regarding employment contracts in the workplace.

What is an employment contract?

An agreement between an employer and employee. It is the basis of the employment relationship.

Which is know as A Statement of Main Terms and Conditions of Employment.

Types of Contracts

There are various forms of contracts. The contract you require will depend on the needs of your business.

Contract types include:

  • full-time contracts.
  • part-time contracts.
  • fixed-term contracts.
  • agency staff.
  • freelancers, consultants, self-employed and contractors.
  • zero-hour contracts.

Full Time Employment Contracts

A full-time contract must details such as name, start date, hours of work and take into account all the employee statutory rights such as pay, holidays etc.

Part Time Contracts

Part-time workers have the right to be treated no less favourably than comparable full-timers. This means they should:

  • receive the same rates of Pay
  • not be excluded from training simply because they work part-time
  • receive Holidays (Holidays) pro rata to comparable full-timers
  • have any career break schemes, contractual and parental leave made available to them in the same way as for full-time workers
  • not be treated less favourably when workers are selected for Redundancy.

Part-time workers have the right to request a written statement of reasons for any treatment which is less favourable than a comparable full-time worker.


Fixed Term Contract

People on a fixed term contract can include a seasonal or casual person who has been taken on for a peak period, a specialist employee taken on for a project, or a person covering for maternity leave.

Fixed term contract are contracts that last for a specified time or will end when a specified task or event has been completed. Employers must not treat fixed term workers less favourably than permanent employees doing the same or a similar job. They will receive the same pay, conditions and benefits as permanent staff, and must be protected against unfavourable treatment.


Agency workers’ rights

From day one of their employment, an agency worker will be entitled to:

  • the same access to facilities such as staff canteens, childcare and transport as a comparable employee of the hirer.
  • be informed about job vacancies.
  • After a 12-week qualifying period, an agency worker will be entitled to the same basic conditions of employment as if they had been directly employed by the hirer on day one of the assignment, specifically:
  • pay – including any fee, bonus, commission, or holiday pay relating to the assignment. It does not include redundancy pay, contractual sick pay, and maternity, paternity or adoption pay
  • working time rights – for example, including any annual leave above what is required by law.
  • Agency Workers (regardless of their employment status) will also be entitled to paid time off to attend ante-natal appointments during their working hours.

Zero hours contracts

A zero hours contract is generally understood to be a contract between an employer and a worker where the employer is not obliged to provide any minimum working hours and the worker is not obliged to accept any work offered.

On 26 May 2015, new regulations about zero hours contracts were brought in. The law prevents employers from enforcing ‘exclusivity clauses’ in a zero hours contract.  An exclusivity clause would be where an employer restricts workers from working for other employers.

The Exclusivity Terms in Zero Hours Regulations 2015 state:

  • it will be automatically unfair if someone is dismissed if they have breached a contractual clause stopping them from working for another employer
  • it is unlawful for a worker to suffer a detriment because they work for another employer.

There is no qualifying period to bring an unfair dismissal claim for this reason, and any claim made to an employment tribunal will depend on the tribunal finding an exclusivity clause in the employment contract.

Self-employed / Subcontractors

A genuinely self-employed person will have few employment rights. Their rights are governed by the terms and contract that they enter into with the party who engages them.

Self-employed people are in business for themselves, providing a service to clients with more control over how, when and by whom the service will be delivered.

Self-employed people will account for their own tax and National Insurance payments.

You will require a contract for services explaining the relationship between them and you.

Timeline for issuing a contract

Under Employment regulations it’s the Employee’s right to receive a written statement of main terms and conditions of employment, regardless of the number of hours they work per week. All employees are entitled to receive a written statement from their employer within eight weeks of starting work. The statement should describe the main terms of the contract of employment. Best practice is to give your employee a contract on the day they start working, so as they know what your rules of engagement are from day one. 

Accompanying Policies

Please remember to have all the correct employment policies in place bespoke to your business. Many business owners are not sure of their requirements and sometimes get it wrong, so be careful. There are many policies you can have such as:
Lateness, Lay-off, Suitability, Capability, Drugs, Smoking including Vaping, Stealing, Vehicle, Bulling and Harassment, Holidays and many more.

It’s the way the policies are written and worded that’s make a big difference. The idea way of presenting all your rules of engagement, is to have a 2-4-page contract and a handbook alongside. The handbook enables all your policies to be in one document.

Perfect HR offers an Employment Contract Support Package.

This includes an up-to-date 12-page comprehensive Employment Contract, setting out your terms and conditions of employment.  Plus, at a heavily discounted monthly rate you can become a Perfect HR member with access to our helpline, documentation, updates and much more. 

For more information please call “Perfect HR” now on 1010101*** or email  The advice is free of charge for business owners and directors.


Access to our document library with template letters, example documents and guidance.


An email helpline and support for HR questions and issues;


Two telephone advice calls per month (extra calls are charged at £10 +vat for each additional phone call thereafter)


Employment legislation and document updates as and when they occur;


Download further Employment Contracts as and when you hire more staff;


Help with the full process of hiring, from drafting an application form, interview letters, offer letters etc.;


Tribunal Legal support.

Contact us



  07834 475832 / 07702 478414


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