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02. Employment Contracts

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United Kingdom

02. Employment Contracts

Minimum Requirements

The standard type of employment contract in the UK is an “open-ended” contract which can be terminated on notice (subject to the protection which the law provides on unfair dismissal). An employment contract need not be in writing and may be partly written and partly oral. However, the basic terms of the employment must be confirmed to employees in writing. Since April 2020, further information must be included in the written statement of terms and this must be provided on or before their start date. From April 2020, this right was extended to workers who are entitled to the basic terms of their engagement in writing on or before their first day.

The most common employment relationship is that of full time permanent employment, but an increasing number of staff have flexible working arrangements.  This may include working part time, through fixed-term contracts or through an agency. UK law gives special protection for these types of workers. Zero hours contracts have become more common in the UK. New regulations prohibit the inclusion of exclusivity clauses in such contracts. There are also special rules relating to apprentices, trainees and young persons.

Agency workers are entitled (i) from day one of an assignment to the same rights as comparable permanent employees in relation to access to shared facilities and job vacancies and (ii) after 12 weeks of an assignment, to additional rights – in particular the same basic working and employment conditions as comparable permanent employees, including those relating to pay, annual leave and working time and rest periods. Agency workers are also entitled to a key information document which must include certain basic information about the terms and conditions on which they work.

Fixed-term/Open-ended Contracts

Workers may be contracted to work for a fixed period only or to perform a particular task with the contract terminating at the end of this period or on the completion of the task. Examples are those who are employed specifically to cover for maternity, parental or paternity leave; employees who do seasonal or casual work such as agricultural workers and shop assistants during busy periods; employees hired to cover unusual peaks in demand as in the tourist industry; and employees whose contracts will end on the completion of a specific task such as installing a computer system.

There is no requirement for fixed-term contracts to specify the reason why it is a fixed-term, although a job title should be included in the contract to comply with the employer’s statutory requirements on the written statement of particulars of employment.

Trial Period

Employment contracts often provide that the employee will undergo a trial or probationary period at the start of their employment, during which the employer has the opportunity to assess the employee’s suitability for the position. The exact terms of the trial period will be governed by the employment contract, but it will typically last between three and six months. During this time, the employee may not be entitled to certain benefits.

Notice Period

The employment contract should state the notice period that either party must give to the other party to terminate the employment. Employees have a statutory right to receive a minimum period of notice from employers once they have been employed for one month, as follows:

  • one week’s notice for those with between one month and two years’ service;
  • thereafter, an additional week’s notice for each continuous year of service, up to a maximum of 12 weeks for 12 complete years’ service.

The statutory minimum notice periods will be implied into the employment contract and will override any express terms providing for a shorter period of notice than that provided by statute.

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