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Factors to consider when drawing up a contract.

By partnersinhr, Jul 31 2015 02:16PM

An employment contract has to be one of the most important documents between an employer and their employee. Essentially, it’s the only way to make sure you’re both singing from the same hymn sheet, so to speak; helping to avoid any potential miscommunications or ambiguity. An employment contract clearly outlines – without any unnecessary jargon – everything an employee needs to know about their role, duties, benefits, compensation and general terms and conditions , and so on, in order to meet the expectations of you, the employer. But what are the key factors that need to be considered when drawing up or reviewing a contract?

When do they need to be drawn up?

Try to ensure that your new employee signs the contract prior to starting at your business, although you are legally bound to produce a written employment contract within the first two months of their start date. However, a contract really ‘begins’ whenever your new worker says “yes” to the job; by accepting the role and starting work, they are agreeing to the terms and conditions provided by you.

Are they up-to-date?

Crucially, contracts must be legally compliant. Employment law seems to be changing every five minutes (even though the government stated that law changes are now made in April and October) so, as an employer, it’s vital that you keep a firm eye on any new rules that have come into effect. Failure to be aware of these changes could seriously cost your business, and you could be fined thousands of pounds as a result of an unfair dismissal, for example. If you want to avoid being caught out, you need to make sure you’re providing up-to-date, accurate contracts for each and every one of your staff.

Are they bespoke to your business?

Every business is different (and every employee, for that matter), so contracts will need to be tailored in order to give you and your employees maximum protection. Off-the-shelf contracts will require you to ‘fill the gaps’ whereas legally comprehensive bespoke contracts will ensure the contract meets your needs and that your business is protected as it grows.

Do they need to be rewritten?

If your business has expanded or roles have changed, it may be necessary for your contracts to be reviewed and updated. This doesn’t necessarily mean they have to be rewritten from scratch, but it’s important that – as an agreement has been reached – you follow the appropriate steps before amending employment contracts.

You may find that your ever-growing business’ working practices have changed; you could require more permanent staff or more flexibility (zero hours contracts, for example, where you are not obliged to provide any minimum working hours and the worker isn’t obliged to accept any offered work). It could be that new senior employees need new tighter contracts or official reward incentive schemes included within the contract.

When is best to review?

Whenever you’re looking to make changes and negotiate new terms, you may want to consider reviewing an employment contract. By reviewing the existing terms and conditions, these potential changes can be highlighted. But don’t think you can adapt the contract on a whim! All terms must be completely clear.

If you are looking to create employment contracts or get some advice on the current status of your contracts, why not get in touch with the friendly team here at Partners in HR? We are highly experienced in creating bespoke contracts that will protect your business, year after year.

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