Are employment contracts necessary for all employees?

All employers are legally required to give their employees a written statement of particulars within two months of starting work.  Often they are included in an employment contract which is signed before the employee starts work but this is not strictly necessary. 

This written statement must contain certain specified information including the start date, job title/description, place of work, notice period and details of pay, hours, holidays and sick pay.  This information is the minimum legal requirement.  However, there are a number of other provisions which employers can include in an employment contract in order to protect their business.  

Confidentiality

An express confidentiality provision will prevent the employee from being able to use or disclose confidential information both during and after employment.

Termination

 The contract can also set out examples of circumstances in which employment can be terminated summarily i.e. without notice or payment for the notice period, for example theft, dishonesty, violence or abusive behaviour, or incapability through alcohol or drugs.

Employee deductions

It is also useful if the contract allows the employer to deduct from salary any amounts owed by the employee. Without such a provision any such deduction will be unlawful. You may also want contractual provisions governing employee's obligations during any sickness absence.

Key employees

For senior or key employees, additional protection can be achieved with post-termination restrictions to prevent these employees from, for example, competing, or soliciting or dealing with certain key customers, or poaching employees, for a certain period after termination. Such restrictions must be drafted very carefully in order to be enforceable.

Guidelines and policies

As your business grows, you would be well advised to establish policies which do not form part of the employment contract but provide useful guidelines for employees, such as an equal opportunities/harassment policy and a disciplinary and grievance procedure.