Contracts

A Contract of Employment defines the working relationship. It exists whether or not anything is written down. Employers are required to give certain written particulars to each employee. Contracts of Employment often impose other obligations such as confidentiality or post termination restrictive covenants. As these might affect your ability to take another job in the future, it is important that you understand them and negotiate clauses that both parties can live with.

Some contracts expressly give the right to alter or vary the Contract of Employment. Still, any significant change should be done in consultation with employees. If it is not and your employer seeks to unilaterally vary your contract, you might have a claim for constructive dismissal if the change is fundamental.

If agreement cannot be reached, your employer might terminate the existing Contract of Employment (using the contractual or statutory notice period) and offer a new Contract. You might have a claim for Unfair Dismissal but your employer might successfully defend that claim if they had a good business reason for the change and consulted you about it.

It is possible to stay with your employer whilst refusing to sign a new Contract of Employment. You should however make clear that you do not accept the change and that you are working under protest, perhaps using the Grievance Procedure. If you continue to work without complaint, you are likely to be deemed to have accepted any change even if you don’t sign the new contract.

Restrictive Covenants impose obligations on employees after their employment has ended. They usually prevent use or disclosure of confidential information, contact with clients, poaching staff or even working for a competitor.

Restrictive covenants are enforceable only if they go no further than is necessary to protect a legitimate business interest. They should be limited in scope (for example only referring to clients or employees with whom the employee in question has had contact) and in time (lasting only the length of time necessary for new staff to develop relationships with clients).

There are in fact three possibilities:

• you are an employee
• you are a “worker”
• you are a self-employed independent contractor or freelancer

The contract and even tax status does not answer the question. Employment Tribunals look at the level of control the “employer” has over you and what is known as “mutuality of obligation”, i.e. Do you need to turn up at specified times? Do you have to request holiday or can you simply decide not to work that week? Can you send a substitute?

Employment status is a complex matter but it is important because it determines your statutory rights to things such as holiday pay, and even the right not to be unfairly dismissed. If you are at all unsure about your employment status, our employment lawyers can advise how an Employment Tribunal would likely view the situation.

Zero Hours Contracts can be Contracts of Employment or casual worker contracts. They are used when the amount of work available for staff varies and are common in retail, hospitality and the care sector.

A Fixed Term Contract is a Contract of Employment that is limited in time, usually to a number of months or years. Fixed Term Contracts are often used to cover particular projects, employee absence or when limited funding is available. Successive Fixed Term Contracts lasting more than 4 years are treated as permanent contracts unless the fixed term can be justified on objective grounds. The non-renewal of a Fixed Term Contract is treated as a dismissal under Unfair Dismissal legislation.