A Contract Exists as Soon as an Employer Takes on an Employee; Commercial Law Update

Article excerpt

Hannah Roberts, solicitor in Leo Abse & Cohen's employment team, takes an overview of contracts of employment

A COMMON misconception about employment contracts is that unless there is a written document, there is no contract of employment.

However, a contract exists as soon as an employer takes on an employee. The terms of that contract, whether written or oral, are determined by a number of factors.

The minimum that every employee is entitled to is a written statement of his or her basic terms and conditions within two months of starting employment.

This statement is often in the form of a letter of appointment, however, for the sake of completeness, many employers choose to issue a formal written contract to cover these basic requirements. The written statement must contain the names of the employee and employer, the date that employment began, details of wages, the hours of work and holiday entitlement, the job title and the place of work of the employee.

If an employer decides to give a written contract, what terms will it contain? There are several types of terms that will be included in a written contract, such as terms inserted by law, terms agreed between the employer and employee and terms that are implied by the law.

The law requires certain terms, such as the employee's right to a minimum wage, maternity pay and a minimum payment in the event of redundancy. The law also inserts a right of the employee not to have unauthorised deductions made from their wages and a minimum period of notice to terminate their employment contract, depending upon their length of service.

Agreed or express terms THESE are the terms that the parties agree upon when the contract is made, either in writing or orally. Common express terms are wages, holiday entitlement and benefits such as company cars and pension entitlements. …