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Contracts of employment

This advice applies to England

It is important that you find out what your employment status is and understand how it affects your rights. 

There are 3 employment statuses:

  • employee
  • worker
  • self-employed

You only have employment rights if you’re an employee or a worker.

An employer might try to call you ‘self-employed’ when you’re actually an employee or worker. Employers sometimes do this to take away their employees’ employment rights. 

If you think your employer has done this you can:

Check if you’re an employee

You’re an employee if:

  •  your employer is in charge of what work youto do and how you should go about  it on a day to day basis (even if you’re left alone to actually do the work) 
  • under your contract you have to do the work yourself - you can’t pass it onto someone else
  • your contract guarantees you a specific amount of work - and you have to do it

Check if you’re a worker

You’re a worker if:

  • under your contract you have to do the work you’re given yourself - you can’t pass it on to someone else
  • your employer isn’t a client or customer of a business that you run

If you’re an agency worker

If you’re working through an agency, you will usually be a worker for the agency. This means you’ll:

  • be sent to do work for another business, which is a client of the agency
  • only have a contract with the agency - not the business where you’re working

Contracts of employment

There is always a contract between an employee and employer. You might not have anything in writing, but a contract still exists. This is because your agreement to work for your employer and your employer’s agreement to pay you for your work forms a contract. Your employer has to give you a written statement within 2 months of you starting work. The statement must contain certain terms and conditions.

A contract gives both you and your employer certain rights and obligations. The most common example is that you have a right to be paid for the work you do. Your employer has a right to give reasonable instructions to you and for you to work at your job. These rights and obligations are called ‘contractual terms’.

The rights that you have under your contract of employment are in addition to the rights you have under law - for example, the right to be paid the National Minimum Wage and the right to paid holidays.

Generally, you and your employer can agree to whatever terms you want in the contract, but you can’t agree to a contractual term which gives you fewer rights than you have under law .

A contract of employment is usually made up of 2 types of contractual terms: ‘express terms’ and ‘implied terms’.

Express terms

Express terms are explicitly agreed between you and your employer. They include:

  • how much you get paid, including any overtime or bonus pay
  • your hours of work, including overtime hours  - there is a legal limit for most employees on the maximum number of hours they can work per week
  • your holiday pay, including how much time off you’re entitled to 
  • sick pay
  • redundancy pay
  • how much warning (notice) your employer must give you if you’re dismissed

Your express terms might not be in one written document, but could be in a number of different documents. They might not be written at all. 

You might also find express terms in:

  • the job advertisement
  • a written statement of main terms and conditions
  • any letters sent by your employer to you before you started work
  • anything you were asked to sign when or since you started work
  • instructions or announcements made by your employer on a notice board at work
  • an office manual or staff handbook

If you don’t have all the relevant documents you should ask your Human Resources  department for copies.

Make sure you  keep any documents given to you by your employer.

Because a contract still exists even if there’s nothing written down, it’s a good idea to make a note of anything your employer says about your rights at work and anything you’ve agreed verbally.

Implied terms

Every contract of employment has general ‘implied’ terms for employees and employers including:

  • you and your employer have a duty of trust to each other, for example, if you lied when you said you were sick to get time off work, you’ll have broken an implied contractual term of trust
  • you and your employer have a duty of care towards each other and other employees., for example, your employer should provide a safe working environment for you and you should use equipment safely
  • you have a duty to obey any ‘reasonable’ instructions given by your employer - there is no legal definition of reasonable, but it wouldn’t be reasonable to tell you to do something illegal

Terms implied by custom and practice

You can only imply a term by ‘custom and practice’ when there’s no express term dealing with the issue. For example, if you’ve worked 35 hours a week for 10 years, even though your contract says you should only do 30 hours, you don’t have the right to work 35 hours by custom and practice.

The exception to this would be if you and your employer have verbally agreed that you’ll always work a 35 hour week.

If part of your contract is broken 

A contract can be broken if either you or your employer doesn’t follow a term in the contract. This is known as a ‘breach of contract’. For example, if you’re dismissed and your employer doesn't give you the amount of notice you’re entitled to under your contract, this would be a breach of contract.

If your employer breaks your contract, you should try and sort the matter out with them informally first.

If this doesn't work, you could try raising a grievance against your employer

Find out what you can do if your employer doesn't pay you what you're owed

If a job offer is withdrawn

Whether you can take any action will depend on if the job offer was made subject to any conditions.

If the job offer was subject to conditions - like satisfactory references or passing a test - and you haven’t met the conditions, there’s nothing you can do. This is because there’s no contract of employment - there’s only a conditional offer.

If your job offer was unconditional, or you met the conditions and you’ve accepted it but it’s withdrawn it's a breach of contract. This is because there's a contract of employment as soon as an unconditional job offer has been made and accepted. You can claim compensation for breach of contract in an employment tribunal or county court.

You can only claim pay for the notice period the contract says the new employer should have given you. If you don’t have a right to contractual notice, you can  claim ‘reasonable notice’, which is 1 week. 

If you think that the job offer was withdrawn because of discrimination, you could consider making a discrimination claim to an employment tribunal. You'd first need to check if you have a strong discrimination case.

Your right to written details about your employment contract

All employees, regardless of the number of hours they work each week, are entitled to receive a written statement from their employer within 2 months of starting work. The statement should describe the main terms of the contract of employment. 

You are entitled to the statement even if your job finishes before the initial 2 months, as long as the job was supposed to last for more than one month and you have worked for at least a month.

An employee who wants a written statement may request one verbally or in writing. It is usually best to request the statement in writing and keep a copy of the letter, so that you can prove you asked for the statement.

The written statement must include:

  • the names of you and your employer
  • the date you started work
  • the amount of pay and how often you will be paid, for example, weekly or monthly
  • the hours of work
  • your holiday entitlement, including how many days off you are entitled to and what your holiday pay will be, if any
  • how much warning (‘notice’) you are entitled to if you are dismissed and how much warning you must give the employer if you want to leave the job
  • the title of the job
  • where the job is based, for example, whether you will have to work in more than one location
  • what the disciplinary, dismissal and grievance procedures are in the workplace
  • what sick pay you are entitled to
  • whether you can join the employer’s occupational pension scheme, if there is one

If your employer  dismisses you for asking for the written terms and conditions of your job, you can claim automatic unfair dismissal.

How your contractual rights relate to statutory rights

Employees have rights given by law - these are called ‘statutory rights’. Any rights you have under your employment contract are in addition to your statutory rights. 

Statutory rights include rights to:

  • paid holidays
  • be paid at least the National Minimum Wage
  • a written statement of the terms of employment
  • an itemised pay statement
  • maternity leave
  • pay in compensation for being made redundant
  • not be unfairly dismissed

You and your employer can agree any terms in the employment contract that you want, but you can’t agree to a contractual term that makes you worse off than you are under  your statutory rights. 

If there’s a contractual term that makes you worse off , for example, you have agreed that you’ll work for less than the National Minimum Wage, your employer won’t be able to enforce the contractual term. You’ll still have a legal right to be paid the National Minimum Wage.

If you’re in your probationary period

Legally, there’s no such thing as a probationary period. Once you’ve started work, the number of weeks you’ve worked begins on the day you started, not from the time when your probationary period ended. Your full contractual rights also started from your first day of work, unless your contract says otherwise.

Your contract could, however, contain terms which only apply during your probationary period and which are less favourable than those which apply when your probationary period has ended. These terms must not take away your statutory rights.

Your employer can extend your probationary period, as long as your contract says they can do this. For example, your employer may want to extend your probationary period in order to have more time to assess your performance. However, they can only do this if your contract has a term which says your probationary period can be extended under these circumstances.

If you’re on a fixed term contract

A fixed term contract specifies a date when it will end. If you’re on a fixed term contract, your employer shouldn’t treat you differently to a permanent member of staff just because you’re a fixed term employee. You have the same statutory rights as permanent staff.

Some of your statutory employment rights only come into effect after you’ve worked for an employer for a certain period of time. This must be a continuous period of employment. 

If you have been employed by the same employer on a series of short-term contracts they are added together to provide ‘continuity of employment’. 

Continuous employment is the length of time an employee has worked for their employer without a break. You can read more about continuous employment on GOV.UK.  

Zero hours contracts

Your employer doesn't have to specify how many hours' work they'll give you if you have a zero hours contract. If you’re on a zero hours contract, your employer can’t stop you working for another employer.

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