Support for your business

Standard, Management and Directors Employment Contracts

Having well-drafted contracts of employment that are suitable for different types of employees is essential for a business to run smoothly and effectively. Contracts of employment should clearly set out the parameters of employment and should encompass the different expectations and criteria for employees, based on their position in the company’s hierarchy.

We know that contracts of employment are not “one size fits all” and should be tailored to the individual based on their role and responsibilities. The protection that a business can enjoy as a consequence of well thought through contracts of employment should not be underestimated. We specialise in, and have vast experience of, protecting our client’s business in this way.


Requirements for Employment Contracts

Whilst contracts of employment may need to be tailored for different job roles or individuals, there are several requirements for all employment contracts, including:

  • Names of both parties;
  • Continuous service date and start date (which may be different);
  • Working hours/days;
  • Salary;
  • Annual leave entitlements;
  • Notice period;
  • Roles and responsibilities;
  • Whether the role is fixed-term or permanent;
  • Probationary period;
  • Training; and

We can advise you on what needs to be included in your contracts of employment as a minimum requirement, as well as what should be considered in order to suit the job role (and individual) that the contract of employment is intended for.


Types of Contracts of Employment

Zero-hour contracts of employment are designed to be flexible. Employers use them when they don’t have typical working hours for staff. However, even zero-hour contracts of employment require the national minimum wage to be paid and an entitlement to annual leave, amongst other things that should (and should not) be included.

Standard contracts of employment will apply to the majority of most employers’ workforces and should be designed to cover the requirements of the majority. Where a business has different sectors or departments, it may be a requirement to have standard contracts of employment that will cover these differing circumstances, rather than an overarching template. In our experience, this engenders effective management and often, improved engagement.

Contracts of employment for managers may require more consideration because they will have greater responsibility, and employees of greater seniority may present a greater risk to the business in question. Because employees of this kind are more senior in an organisation, they will also commonly enjoy greater access to an organisation’s confidential information, suppliers and/or clients. It is often sensible therefore to incorporate restrictions on conduct whilst employed and conduct after the employment relationship has ended in order to ensure that the best interests of an employer are better protected. Greater protection can also be afforded in respect of confidential information, property and equipment and intellectual property. Equally, good managers can be an enormous asset to a business and adequately incentivising employees of this kind to remain in the business can also be very sensible.

Contracts of employment for the directors of a business are generally referred to as service agreements. These contracts of employment will go further still, with further duties owed and other additional incentives may be considered, such as share schemes or long-term incentive plans. Further information on these can be found here. Because of the seniority within the business, service agreements tend to be more bespoke to the individual. These are an essential tool in the management of senior employees and directors and the obligations that spring from that status.

Our Employment Team drafts hundreds of contracts of employment each year for our clients, tailoring them to the industry and sector that our clients work in. This idiosyncratic approach, rather than a one-size fits all provides our clients with much more effective tools for managing their work force and the attendant risks. Our clients range from scale-ups to SMEs through to PLC’s, across a wide range of sectors. This breadth of client base sits at the core of the decision-making process and allows us to advise on the application of the most appropriate forms to be deployed.


Consultancy Agreements and IR35

Consultancy agreements are also commonplace for many employers who contract a self-employed individual to undertake specific projects or tasks, commonly limited to a defined period of time. In our experience, consultancy contracts often need to be drafted for specialist and one-off  roles and should more often than not be tailored specifically each time a consultant begins a new project.

IR35 Regulations have completely changed the way organisations utilise consultants and the new legislation can be a minefield for organisations. As the end user of the services of a consultant, IR35 will result in an increased workload both in terms of additional administration and the resulting and potential payroll processing. 

Whilst smaller businesses have, so far, avoided the majority of IR35 legislation, it is likely that small businesses will have to adhere to these Regulations in the future. For this reason, businesses should consider how to work within the Regulations, should (or when) the time come when they affect smaller businesses.  

As IR35 is a relatively new concept for organisations to be dealing with, businesses may require  more guidance or advice in how to adhere to the Regulations. Our Employment Team will work with you in order to ensure use of consultants in a tax efficient and compliant manner, minimising the risk that consultants are considered employees (or workers) under the relevant legislation.

The employment relationship begins and ends with the contract of employment. We always work with our clients to draft the contracts of employment that they actually need. Whether that’s bespoke, tailored contracts of employment for individuals or more generic contracts of employment that can be used for groups of employees, our Employment Team can create documents that work for your business and provide the protection that a business is obliged to consider when engaging employee at all levels.

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