Employment Contracts and Your Rights as an Employer

The employment contract is the foundation of the employer-employee relationship. It defines the terms on which work is performed, the obligations of both parties, and the remedies available when things go wrong. Getting it right from the outset saves significant cost and dispute later.

The written statement of employment particulars

Employers must provide a written statement of principal employment particulars from day one of employment. The statement must include the names of employer and employee, the start date, pay and pay intervals, working hours, holiday entitlement, notice periods, job title, place of work, and details of any collective agreements. Failure to provide a compliant statement can result in an employment tribunal award of 2–4 weeks’ pay when a tribunal finds in the employee’s favour on any other claim.

Key clauses to include

Beyond the mandatory information, well-drafted contracts include a probationary period with a shorter notice period, a clearly defined job description with a flexibility clause, an express right to vary duties within reason, garden leave provisions, a clear disciplinary and grievance procedure reference, a clause permitting deductions from salary for overpayment or return of equipment, an intellectual property assignment clause vesting ownership of work product in the employer, and a confidentiality clause protecting business information.

Restrictive covenants

Restrictive covenants are clauses that restrict what an employee can do after they leave — such as working for a competitor, poaching clients, or soliciting former colleagues. They are only enforceable if they go no further than reasonably necessary to protect a legitimate business interest, such as trade connections or confidential information. Courts will not enforce covenants that are too wide in scope, duration, or geography. A solicitor can draft covenants that are tailored, proportionate, and likely to be enforceable.

When an employee breaches their contract

Breach of contract by an employee — such as failing to give proper notice, misusing confidential information, or breaching a restrictive covenant — can give rise to a claim in the civil courts for damages, or in some cases for an injunction restraining further breach. The Employment Tribunal has limited jurisdiction to hear employer contract claims — generally only up to £25,000. Significant claims must be brought in the County Court or High Court.

Zero-hours contracts

Zero-hours contracts are lawful in England and Wales, provided workers are not excluded from working for other employers. Workers on zero-hours contracts have the same holiday entitlement, minimum wage rights, and protection from discrimination as other workers. The status of a worker — employee, worker, or genuinely self-employed — affects which additional rights they have, and misclassification carries significant legal and financial risk for employers.