Employment Contracts

An employment contract does not need to be in writing, but, if it is not, an employer must provide to each employee a written statement of the main terms and conditions of employment within two months of the first day of employment. Of course, it is highly advisable to issue a written employment contract in case there is a dispute over the employee’s terms of employment.

There are a number of reasons why you should instruct a solicitor to draft or review your employment contracts:

• Although a degree of protection will automatically be implied into an employment contract, there are key areas where this is not the case. It is important to ensure that key areas – such as non-competition restrictions, PILON (payment in lieu of notice) and garden leave clauses – are suitably incorporated into the contract.

• Restrictive covenants must be carefully drafted to ensure they are no wider than is reasonably necessary to protect a legitimate interest of the employer. Getting this wrong will mean that the restrictive covenant cannot be relied on at all. Whether a restrictive covenant is legally justified is fact sensitive and highlights the importance of obtaining the appropriate advice.

• Advice should be obtained on the interaction between the employment contract and a company’s policies. It may or may not be advisable to treat the company’s policies as contractually binding – in reality, it is likely that some policies ought to be contractually binding and that others should not be.

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