Employers are often confused about contracts of employment – what needs to be issued & when; what these should contain; and whether a contract even exists. There's a myth often held by small employers: their staff do not have contracts of employment.

The truth is that employers don't put key details (a Statement of Particulars) of the contract in writing, despite the law requiring this within two months of an employee starting work. But without exception, every employer has a contract of employment with their employee(s); this contract is formed the moment an offer of employment is made & accepted. There may be nothing in writing, let alone signed, and many of the details of the contract may not be known, but a contract will nonetheless exist.

The legal minimum

Employers are obliged by law to issue all new employees with a Statement of Particulars within two months of them commencing work. (A failure to provide just this simple information can result in an employment tribunal claim against the employer, where the details may be determined & then become binding on the employer.)

Providing there are basic employment policies available (i.e. a Disciplinary & Grievance Procedure) a Written Statement of Particulars is a relatively straightforward document to complete, and small employers should get into the habit of issuing these as soon as possible after the recruitment of a new employee.

The Principal Statement

The Statement of Particulars can be provided in instalments, and may refer to other documents that are readily available to employees, but there is a minimum that must be provided in one document, commonly referred to as a Principal Statement.

The Principal Statement must include:

  • the legal name of the employer (it is good practice to include any trading name too);
  • the name of the employee (it is good practice to include the address too, at least to ensure this information is held by the employer);
  • the date employment commenced (including, where appropriate, the date continuous employment began);
  • the rates of pay, how this is calculated, and the frequency of payments (weekly, monthly, or other specified intervals);
  • any conditions relating to hours of work, including the normal hours of work and where this may vary;
  • holiday entitlements, including public holidays & holiday pay (this information needs to be sufficiently detailed to allow calculations to be made on accrued entitlements);
  • the job title, or brief description of the work ( it is good practice to give a clear description of work that employees could occasionally but regularly be required to complete, to ensure they cannot later suggest a task was not part of their duties and decline to complete this);
  • the normal place of work, or where the employee is required or permitted to work at various places, an indication of that and of the address of the employer.

This information must be provided in the form of one document; this could be a letter of appointment, with the details attached, or be provided in a single document shortly after the employment commences.

Other details that need to be provided to an employee can be provided in more convenient ways – some details need to be directly provided to the employee, while other policies can simply be referred to (where these are easily accesible by the employee).

The further details that must be provided to all employees (in a note or other document, but not necessarily with the Principal Statement) are:

  • details of the name or position of the person an employee should apply to in order to resolve a grievance, or if they are not happy with any disciplinary decision - including the form this should be presented in;
  • length of the contract, or the date when it is to end, where this is not intended to be permanent;
  • details of any collective agreements that directly affect the terms & conditions;
  • details relating to employment to be worked outside the UK;
  • whether a contracting-out certificate under the Pensions Schemes Act 1993 is in force for the employment.

And finally, details that need to be provided to the employee, but can simply advise the employee where the information is available (as long as the policies are readily & easily accessible to the employee):

  • terms & conditions relating to sickness, including terms & conditions for sick pay;
  • notice periods – the length of notice the parties should give to end the contract;
  • terms relating to pensions;
  • the companies disciplinary & grievance procedures (although details of who an employee should raise a grievance or appeal with must be provided in writing to the employee).

In any instance where there are no particulars – for example, if there is no pension scheme – the Written Statement must also specify this to be so.

The Statement of Particulars has to be provided to an employee even if the employment ends before the end of the period in which it was due - as necessary, this should be sent to the employee.

Where changes are made to any particulars, the employer must provide the employee with details of these changes within one month. This does not require the employer to produce a new Statement of Particulars in full: a document that states what changes are being made & the effective date of these changes will suffice, although it should be noted that changes cannot be made to a Contract of Employment (including the Statement of Particulars) without the prior consent of the employee.

Preparing a Statement of Particulars

Employers may feel that preparing a statement of particulars requires a professional, and is a task that will increase the costs of running a business. If employers wish to have these documents completed for them, the Employment Law Clinic is ready to take care of the legal stuff, and will produce documents specific to your needs.

However, if an employer can spare 25 minutes, there is a free tool available on the Government's Business Link website; once you've prepared documents, the Employment Law Clinic will even check your documents are suitable & correctly completed.

Staff Handbooks

While not strictly part of the contract of employment, a staff handbook can help influence or determine the contract: guidance in the staff handbook will generally reflect what is expected of an employee, and a failure to follow or abide this may mean the contract is being breached - in which case the employer may have grounds to take disciplinary action against the employee.

There is no legal obligation for Staff Handbooks, although employers should consider having these in place to help promote the business & the expected behaviour of staff. These are also less formal than a Statement of Particulars, making them more easily understood by staff, and will normally be more extensive, covering company policies & the general standards required.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.