• Learning for LifeandWork

What is a Contract of Employment?

Updated: Mar 15, 2020

A Contract of Employment is an agreement between an employer and employee. It provides guidance on the working relationship between the employee and the employer and it outlines the main terms and conditions of employment. It does not need to be in writing to be legally binding but employees are legally entitled to a written contract so as to understand their expectations within the workplace.


What would you expect to see in a Contract of Employment?

The Contract of Employment should have the following:

  • name of employer

  • name of employee

  • job title

  • description of job

  • hours of work

  • rates of pay

  • method of payment

  • details of pension scheme

  • holiday entitlement

  • period of notice to be given

  • details of grievance and disciplinary procedures

  • sickness, injury and maternity pay entitlement

  • arrangements for payment of commission, bonuses or overtime

  • date it is to begin

  • signatures of employee and employer


Why is it important to have a Contract of Employment?


Having a Contract of Employment means that the employer is legally bound to ensure that all terms and conditions detailed in the Contract of Employment are adhered to and honoured in order that the employee cannot be exploited.


Having a Contract of Employment means that the employee will be fully aware of all their rights and responsibilities so it gives them a sense of security in their job.


A Contract of Employment is a legal document and may be relevant if the employee is unfairly

dismissed.


Why should an employee be familiar with the terms and condition of employment within their Contract of Employment?


  • The Contract of Employment explains the duties of the employee and therefore they will know exactly the work they have to carry out.

  • The Contract of Employment states the date the employee started work and this is important for the employee’s pension, redundancy entitlements.

  • The Contract of Employment states the rate of pay being agreed by the employer and employee and thus there will be no issues regarding the correct pay.

  • The Contract of Employment states the length of notice to be given by the employer and employee and therefore this is relevant when the employee is leaving that employment for whatever reason.

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