Are you legally obliged to provide a contract of employment?

Most employers provide their employees with a contract of employment when they start with a new employer.

It’s common practice across the UK and is essential to set out the expected terms of an employee’s role and their remuneration package. It’s a question that we’re often asked, are you legally required to give an employee a contract of employment?

The short answer is no, however this is a bit misleading because once people hear that, they switch off and think they’re in the clear! Whilst you are not legally bound to provide an employee with a contract of employment, you are however, required to produce something called “written statement of employment particulars”.

As an employer, you must provide the principal statement on the first day of employment and the wider written statement within 2 months of the start of employment. It is not an employment contract. The written statement is made up of the main document (known as a ‘principal statement’) and a wider written statement.

What needs to be included in the principal statement?

It must include at least:

• the employer’s name
• the employee’s or worker’s name, job title or a description of work and start date
• how much and how often an employee or worker will get paid
• hours and days of work and if and how they may vary (also if employees or workers will have to work Sundays, nights or overtime)
• holiday entitlement (and if that includes public holidays)
• where an employee or worker will be working and whether they might have to relocate
• if an employee or worker works in different places, where these will be and what the employer’s address is
• how long a job is expected to last (and what the end date is if it’s a fixed-term contract)
• how long any probation period is and what its conditions are
• any other benefits (for example, childcare vouchers and lunch)
• obligatory training, whether or not this is paid for by the employer

For employees, it must also include the date that a previous job started if it counts towards a period of continuous employment.

The statement should also include if an employee has to work outside the UK for more than a month and what they’ll receive whilst there are abroad.

On the first day of employment the employer must also provide the employee or worker with information about sick pay and procedures, other types of paid leave (such as maternity and paternity leave) and notice periods. I’d recommend you put these types of company policies in a handbook or on an intranet site that everyone can access.

What about “The wider written statement”?

You must give employees a wider written statement within 2 months of the start of employment and that must include information about:

• pensions and pension schemes
• collective agreements (where there may be union recognition)
• any other right to non-compulsory training provided by the employer
• disciplinary and grievance procedures

Again, these might be typically included in a employee handbook or other central location.

When you look at the information you are legally required to give an employee, you can see that whilst a contract of employment, in its technical term is not a legal requirement, you are obliged to give an essentially shortened version of a contract.

A contract of employment protects both the employer and the employee and sets out clear parameters from day one. There is no beneficial reason to not give an employee a contract.

Some employers believe that the absence of a contract means their employees have less rights and puts the employer in a more favourable position. But that just isn’t the case and in some cases, the absence of a contract could give rise to them having more rights through something known as ‘custom and practice’. In the absence of a written contract, a verbal contract is considered to be in place.