What Should a Contract of Employment Contain?

When employing a new member of staff, you must provide a written statement of employment particulars known as a “section 1 statement”. This can be a stand-alone document, or the details can be incorporated into a more detailed formal contract of employment.

The law says that employers must provide the section 1 statement before or on an employee’s start date. If the section 1 statement is not incorporated into a more detailed contract, we highly recommend that the full terms of the employment relationship are recorded in a formal written document, which is then signed by both parties. This is especially important for more senior employees as their terms are likely to be significantly more complex than those of more junior employees/workers.

What does a section 1 statement need to include?

A section 1 statement includes a principal statement and a wider written statement.

An employer must provide the principal statement before the employee or worker starts. It includes:

• The employee and the employers’ names
• The employee’s start date
• The job title and job description
• The office address where the employee is expected to work
• The amount of pay, how often the employee is paid, and when
• If the employee is full time or part time, what the working hours are and whether the hours can be changed by the employer
• Holiday pay, sick pay, and any other leave the employee qualifies for
• The employee’s contractual and non-contractual benefits
• The probation period length and conditions
• If the job is temporary or permanent
• The notice period
• The terms of working abroad if this is required
• Any training that the employee must complete

The wider written statement must be issued within two months of the employee’s start date. It includes:

• Pension arrangements
• Collective agreements
• Optional training opportunities
• Discipline and grievance procedures

If, after the section 1 statement has been delivered, there is a change to any of the particulars, the employer must give the employee or worker a written statement containing details of the change (a “section 4 statement”).

What a contract of employment should include

As well as containing more detailed information on the basic terms of the working arrangement, which are explained in the section 1 statement, a formal contract of employment can also include details on the following:

• Confidentiality and data protection
• Intellectual property
• Post termination restrictive covenants
• Obligations on termination

What makes a contract legally binding?

Both verbal and written contracts are legally binding. However, it is very difficult to evidence the details of a verbal agreement, and this frequently leads to disputes. For business protection, it is very important that the full terms of employment are clearly recorded in writing, and that an employee signs to confirm acceptance.

What is a permanent contract?

Permanent employees will receive a permanent contract. The contract is in effect until the employee leaves the company.

For temporary or fixed-term employees, the contract will last until the agreed end date.

How to draw up a contract

At DFA Law, our team of employment lawyers are experts at drafting employment contracts. We can help ensure that terms of employment are comprehensive and clear from the outset, minimising disputes and maximising protection for your business.

If you are in need of an employment contract or section 1 statement, please contact an employment law solicitor at DFA Law for a no-obligations chat.

In addition to employment contracts, our talented team of solicitors at DFA Law can help with all aspects of employment law. Please email info@dfalaw.co.uk or call 01604 609560 for more information.