How Your Employment Contracts Can Protect Your Business

Some contract terms are obvious: the rate of pay, the hours of work, arrangements for holiday pay and sickness absence, etc. Provisions for how the employment can be brought to an end – by either employer or employee – and the disciplinary and grievance procedures should also be in the contract.

The law also implies terms into the contract which are not expressly stated. For instance, for a delivery driver or chauffeur job, it might be an implied term that the employee has a driving licence. Custom and practice can also become contract terms in some circumstances, such as paying travel expenses.

There are also other implied terms which allow the employment to operate smoothly. The most important of these is the implied term of mutual trust and confidence. This means that physical and verbal abuse or harassment can amount to a breach of contract (as well as possibly a breach of the criminal law).

As an employer, you can protect yourself by including other terms in the contract. For instance, if at any time your employee owes you any money, you might want to deduct it from their pay. But unless there is a term of the contract which allows you to do so, it is likely to be illegal. The contract can also contain an opt-out from the maximum working week requirements of the Working Time Regulations.

What about when your employee moves on to work elsewhere? The employment contract can restrict their ability to use your confidential information after they have stopped working for you. It can also limit their ability to work for a competitor, deal with your clients and poach your staff.

All told, properly drafted employment contracts are a good investment for every business.

Notes

To find out more about employment contracts and claims, click here.