As an employment lawyer I often see employers inadvertently making errors in their employment contracts that could lead to costly disputes down the line. Employment contracts are the foundation of the employer-employee relationship, and ensuring they are accurate, comprehensive, and legally compliant is critical for protecting your business. Below, I’ve outlined some of the most common mistakes and provide practical tips on how to avoid them.
1. Failing to Provide a Written Statement of Employment Terms
Under UK law, employers are required to provide employees with a written statement of particulars of employment by the first day of work. This statement must include key information, such as:
- Job title and description
- Start date and continuous service date
- Hours of work
- Pay and benefits
- Notice periods
How to avoid this mistake: Make it a standard practice to issue a comprehensive written contract to every new employee before their start date. Consider using a checklist to ensure all required terms are included.
2. Using Generic or Outdated Templates
Employment laws and business needs evolve over time. Relying on generic templates or contracts drafted years ago can lead to non-compliance with current legislation or insufficient coverage of important clauses.
How to avoid this mistake: Regularly review and update your employment contracts to reflect changes in law and your specific business requirements. Engaging an employment lawyer to tailor your contracts ensures they are both compliant and fit for purpose.
3. Overlooking Key Clauses
Some employers miss vital clauses that could protect their business, such as:
- Confidentiality clauses: To safeguard sensitive information.
- Restrictive covenants: To prevent employees from poaching clients or joining competitors after leaving.
- Intellectual property rights: To clarify ownership of work created during employment.
How to avoid this mistake: Identify the risks specific to your business and incorporate clauses that mitigate them. A bespoke contract drafted by a legal professional will address these areas comprehensively.
4. Ambiguities in Terms and Conditions
Vague or poorly drafted terms can create uncertainty and lead to disputes. For instance, unclear wording about bonus entitlements or working hours can result in misunderstandings.
How to avoid this mistake: Ensure that all terms are clear, precise, and unambiguous. Seek legal advice if you’re unsure how to phrase a particular clause.
5. Not Accounting for Changes in Employment Terms
Businesses evolve, and so do employee roles. Failing to update contracts to reflect changes in job duties, salary, or working hours can result in breaches of contract.
How to avoid this mistake: Establish a process for reviewing and updating employment contracts whenever there are significant changes. Obtain the employee’s written agreement to any amendments.
6. Ignoring Statutory Rights and Minimums
Some employers inadvertently breach statutory requirements, such as failing to provide the minimum notice period or holiday entitlement.
How to avoid this mistake: Familiarise yourself with the statutory requirements under UK law and ensure your contracts meet or exceed these minimums. Legal advice can help ensure compliance.
7. Overlooking Probation Periods
Including a probation period in employment contracts allows you to assess an employee’s suitability for the role. However, some employers either omit this clause or fail to detail its terms, such as the length of the probation period and notice requirements during this time.
How to avoid this mistake: Clearly outline the terms of the probation period, including how performance will be assessed and what happens at the end of the probation.
8. Protect Your Interests
Employment contracts are not just legal documents; they are tools to manage expectations and protect your business interests. By avoiding these common mistakes and seeking professional advice, you can reduce the risk of disputes and create a solid foundation for a productive employment relationship.
If you’re unsure about your existing contracts or need help drafting new ones, our team at Franklins Solicitors is here to help.
Please contact our Employment Law team on 01604 936512 / 01908 953674 or email [email protected].
Written by Sara Marshall
Associate Partner, Employment Law at Franklins Solicitors LLP
Specialises in settlement agreements, unfair dismissal, redundancy, discrimination (sex, race, disability, sexual orientation), employment tribunal claims, maternity and paternity rights, flexible working, equal pay, bullying, victimisation, and restrictive covenants.
Sara Marshall is an experienced Employment Law Solicitor at Franklins Solicitors LLP, qualified since 2009 with over 27 years of experience. She is a member of the Employment Lawyers Association and advises both employers and employees on a wide range of contentious and non-contentious employment matters.
Sara specialises in settlement agreements, unfair dismissal, redundancy, discrimination, employment tribunal claims, and workplace policies. Known for her practical advice and supportive approach, she helps clients navigate complex employment issues with confidence.
Outside of work, Sara enjoys running, spending time with her family, and walking their dog, Bailey.
Table of contents
- 1. Failing to Provide a Written Statement of Employment Terms
- 2. Using Generic or Outdated Templates
- 3. Overlooking Key Clauses
- 4. Ambiguities in Terms and Conditions
- 5. Not Accounting for Changes in Employment Terms
- 6. Ignoring Statutory Rights and Minimums
- 7. Overlooking Probation Periods
- 8. Protect Your Interests
