HR Helpline Queries Part 2: Contracts of Employment

The FPM HR helpline sees hundreds of queries each year from practice manager members, some common and some not so common. In this second part of our new series of articles, our HR expert Ciara Burns looks at the subject of Contracts of Employment.

When an employer hires a new employee or worker, it is essential to establish a well-defined employment contract. Contracts of employment should explicitly outline the assigned tasks, responsibilities, and expectations associated with the job. A contract doesn't always have to be in writing as they can be established verbally, but it is best practice to have a written document to avoid any misunderstandings.

Many employers offer a written statement of particulars; often this statement and contract of employment are used interchangeably in the workplace, however there is a difference between them. A contract of employment defines the legal relationship between both employer and employee, whereas the written statement of particulars is evidence that the contract of employment exists. Legally, employers are required to provide employees and workers with a 'written statement of particulars' on or before the start date, as outlined in Section 1 of the Employment Rights Act 1996.

When embarking on the task of drafting a written statement of particulars and the employment contract, it is crucial to consider several important factors before putting pen to paper, such as gathering basic information.

A written statement of particulars should include the following:

  • Employer’s name
  • Employee’s name, job title and description of work, and start date
  • Salary / hourly rate and when payment will be made
  • Hours and days of work
  • Holiday entitlement
  • Location of the role
  • If the job offer is permanent, fixed term, temporary
  • Length of probationary period
  • Any other benefits
  • Obligatory training

Within two months of starting other terms can be agreed such as;

  • Sick pay
  • Pension arrangements
  • Disciplinary rules and disciplinary and grievance procedures

The above can be provided to an employee in the absence of the contract of employment. If you are offering both, the same provisions should be included, however the difference between both is that the contract will be signed by two parties. The contract includes the rights and responsibilities of each party and will be broader than the written statement. A contract that is enforceable requires certainty as to its terms; usually the contract will have both express terms (pay, hours of work, annual leave entitlement) and implied terms (employers’ duty to of care towards employees, the duty not to destroy mutual trust and confidence). There are other clauses that can also be added to the contract of employment, even if they are not required by legislation.

Not every contract of employment will be the same for all employees in the organisation, for example clinical and non-clinical employees will have different requirements to meet the expectations of the role. Often, various clauses are overlooked such as the requirement to keep professional registration, the probationary period and deduction from wages. Below we will look at the importance of having such clauses in a contract of employment.

Professional Registration

By law, employers are required to check that employed healthcare professionals are registered with an appropriate regulated body and that they are fit and licensed to practice in their chosen profession, before they start work. Employers should also ensure that professionals continue to maintain their registration and fitness to practice for the duration of employment. If a nurse continues to practice when their registration has lapsed, this means they are illegally practising; an employer must take immediate action, which can include disciplinary action. It is important to include a clause in the contract of employment which places responsibility on the employee to maintain their professional registration. This clause is often overlooked, but it is one of the top 3 clauses an employer should consider incorporating into the contract of employment for healthcare professionals.

Probationary Period

There is no legal requirement in employment law to include a probationary period for new employees, but having a managing review period has several advantages. During this time the employer can monitor the employee’s performance and have the option to terminate the contract of employment with one week's notice, if it becomes apparent they are unsuitable for the role. It is recommended to include a dedicated paragraph in the contract detailing the probationary process; it should include the duration of the probationary period, the review dates, how the employee's performance will be measured, and whether the probationary period can be extended.

Deductions from Wages

The Employment Rights Act specifies that it is unlawful to make deductions from an employee’s wages unless the deduction is required by statute, authorised by a provision in the employees’ contract of employment and the employee has consented to the deduction in writing. Including a deduction clause in the contract of employment lawfully allows an employer to make deductions from an employee to pay for things such as damage to property cause by the employee’s negligence, or any sums owed to the employer such as an advancement on wages. If an employer makes a deduction from wages without a clause in the contract of employment, they may face a claim for unlawful deduction from wages.

Having a well-written contract of employment can help avoid problems that may arise in the future, if an employee raises a dispute to an Employment Tribunal. Employers who have an established and well-written contract of employment will be able to rely on this and the clauses within it to defend any claims.

Created by Ciara Burns
Ciara Burns
Ciara is the HR Consultant at FPM Group who writes and produces content on a wide range of topics such as HR best practices, employment law, recruitment, policies, and procedures.


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