Understanding your Employment Contract

Every employee in the United Kingdom should have an employment contract. Although a written contract is not always necessary, you should make sure that you hold on to any written documents that you are given.

An employment contract seeks to establish the rights and responsibilities of both the employer and the employee. It is set out to protect both parties; however the employer normally has more control over the terms than the employee does. As an employee, you should make sure that you know and understand your employment contract.

Legal Rights

In the United Kingdom, contract law can be very confusing, because it takes into consideration express terms and implied terms. A contract can also be oral or written, and UK law also allows contracts to develop over time because of the implied consent of both parties. For example, if a landlord treats an occupant of their home as a tenant for a substantial amount of time and the occupant reciprocates this relationship, an implied contract may be established between the two parties. In these circumstances, the occupant may then be afforded the same legal rights as a standard tenant. Similar circumstances can evolve in employment law.

Your contract can set out a number of things, but your contract cannot be used to take away your legal rights as an employee in the United Kingdom. These rights are guaranteed under UK law, and if your employer does not meet these obligations then they may be breaking the law. For example, all UK workers have a right to be paid the National Minimum Wage. Any contract clause that states that you will be paid less than National Minimum Wage will be ineffective and can be overwritten by UK legislation.

Employment Status

Adult workers in the United Kingdom are normally classified under one of three different types of employment status; employee; worker; and self-employed. Knowing which category your employment is classified under can help you to understand your legal rights. You can find out more about how your employment status affects your legal rights by visiting the Gov.UK website or by speaking to the Citizen's Advice Bureau.

Oral Contracts

Your employer can set out the terms of your employment using an oral contract. Although an oral contract is legally binding, it can be very hard to prove what terms have been offered under this type of contract. If your employer wishes to make an oral contract with you when you begin your employment, you may ask them to provide you with a written statement that sets out the main terms of your employment. They should provide you with this within two months of asking, regardless of how many hours you work or whether your hours are regularly.

Standard Express Terms

Express terms are parts of the contract that are specifically stated. There is no set format for these terms, although most contracts will include similar information.

Standard terms will normally include; the amount that you will be paid (including pay rates for any overtime or agreed bonuses); the number of hours that you will work; the amount of annual leave that you are entitled to; and how much notice you need to give if you (or the employer) want to end your contract. Many other things may be set out in your contract, such as staff perks and place of work. In addition to the information which is given in your formal written contract, you (and your employer) may be bound by any express terms which are set out in other communications. For example, the staff handbook may set out certain terms of employment that apply to all staff. It is a good idea to keep a copy of all correspondence that is given to you by your employer, so that you have proof of express terms if there are any problems with your contract.

Implied Terms

Implied terms are contract terms which are not formally codified, but which are implied as part of normal employee-employer relationships. For example, it is implied that you will not financially abuse your employer, and it is implied that they will not ask you to do anything that is illegal. Many implied terms are formally codified in UK legislation, and they therefore do not need to be written down in every employment contract. Some implied terms also develop over time through the common practices which are displayed by the company. For example, wearing casual clothes on a Friday may not be formally codified anywhere by a company, but could become a part of a staff contract over time. In order for a practice like this to be considered as an implied contract term, the practice should be widely followed by other employees, long-standing,