Written by Caroline Trenchard | 9th May 2023

For all employers, a legally sound, comprehensive employment contract is essential – not just for legal compliance but also to ensure employer and employee understand what is required of them, right from the start of the relationship.

You are legally obliged to issue a written statement of particulars – a written document summarising the main terms and conditions of their employment – on the first day of employment, and a copy should be read, signed and returned by the employee to be kept on file for you to refer to.

Poorly-drafted, or non-existent written statements and employment contracts are a huge risk to a business, storing up potential problems for the future – particularly if a disciplinary issue or grievance arises.

But what about outdated contracts? Employment law changes all the time, workplaces introduce new policies and procedures, people come and go, so it’s vital you review and refresh contracts. Here’s why:

Compliance with new laws and legislation

A contract that isn’t compliant is a risk to your business in many ways. From tribunal claims to reputation, compliance is the cornerstone of every contract. In the event of any potential claim or employment tribunal, the contracts you have with your employees will be one of the first things asked for.

You should keep up to date with employment law and legislation such as the recent changes to statutory sick pay, national living wage and statutory maternity and paternity pay .

The Good Work Plan came into effect in 2020 and employers are still failing to embrace new compliance required by that legislation. This sets out that employment contracts must include details of any probationary period the role is subject to, the days of the week the employee is required to work, whether working hours are variable and how this will be determined, any paid leave entitlements, all remuneration and benefits, length of temporary or fixed term work and any training entitlement (see below). These are simple changes to make but are frequently missed and costly to get wrong.

Transparency with your employees

Not having an up-to-date document in place makes it difficult to track employees’ entitlements and obligations and is very likely to lead to misunderstandings and different expectations. Having everything clearly written down will prevent potentially costly disagreements later on.

Employees may be unclear about their entitlements and feel confused about what other employees have received. It might be something completely innocent such as employees’ annual leave increasing with length of service (therefore longer serving employees receive more annual leave days). This not being clear in the employment contract can fuel the feeling of unfair treatment and potentially even affect morale in the workplace.

When might you update employment contracts?

There are several cases where you may need to make changes to your employment contracts, but it’s important to remember that before making a change, you must first obtain employee consent.

You can do this by discussing and explaining the proposed change with the individual, group or all employees, providing full details of the change and the reasons for it. You should also use this as a consultation and listen to any suggestions, feedback or alternatives that your employee puts forward.

Your contracts may include ‘flexibility’ clauses, which give you the right to change certain conditions (for example, shift patterns) or a ‘mobility clause’, allowing changes to job location, but you should always be cautious about trying to vary contractual terms.

If changes are a fundamental breach of contract, employees can resign and bring a tribunal claim. We recommend seeking HR support if you wish to make changes.

Here are four situations where you would need to update your employment contracts:

To introduce or vary terms and conditions

If you need to introduce or make a change to terms and conditions such as working hours, maternity or paternity leave and pay, or details of a pension scheme, this needs to be agreed with your employees and updated in your contracts.

This also applies to the written statement of particulars. You should update this statement if the change relates to job title, job description, job location, pay, working hours or holiday entitlement. You must usually update their written statement within one month of any changes taking effect.

Changes to ways of working

You can actually agree to change to a hybrid or remote working arrangement on an informal basis without the need to change an employment contract. You may agree with your employees that everyone will work from home on Fridays, for example, or whatever home-office split works for each employee. This could be for a trial period or a permanent way of working.

Where employees make a formal request for remote or hybrid working through a flexible working policy (and the request is accepted) this will amount to a formal change to terms of employment.

In this case, you may decide that updating employment contracts with clear information about what is expected of hybrid working would be a good idea. This could include whether attendance in the office will be required for a set number of days (and on particular days); or whether the arrangement is going to be flexible enough to allow employees to decide when to come in. Also, if employees need to come into the office for things like client meetings, appraisals and training.

Training requirements

Where roles change or evolve within your organisation or where you have new starters, you are likely to need to consider training requirements. For those starting employment on or after 6 April 2020, the written statement must now include: any training entitlement that you provide; any part of that training which you require the employee to complete, i.e. mandatory training; and any other training which you require them to complete but which you won’t bear the cost of, i.e. mandatory training that they will need to pay for themselves.

Our consultants are specialists in working with employers to provide contracts that are comprehensive, easy to understand and up to date with current legal requirements.

We also offer an option to regularly revise and maintain your employment contracts, advising you of changes in legislation, HR trends and obligations – protecting your staff and your business now and in the future.

If you have any questions or require support with your employment contracts, please contact info@realityhr.co.uk.