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What is an Employment Contract?
An Employment Contract is a legal agreement between an employer and an employee, which sets out the employee's and employer’s rights, responsibilities, and duties. Employment Contracts help you to clearly establish the parameters of, and form the legal basis of, an employment relationship.
This document is GDPR compliant.
When should an Employment Contract be used?
Use this Employment Contract template:
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when you make a job offer in order to employ someone new, or want to sign a new contract with an existing employee
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to provide the written employment information that is required by law
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if you want to create a permanent or fixed-term contract
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for employees based in England, Wales, or Scotland
For more information about the recruitment process, read Hiring employees. If you want to hire a senior employee or a director/executive, you should use a Senior employment contract.
Sample Employment Contract
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EMPLOYMENT CONTRACT
This Agreement is made on the date of the last signature below.
Between:
- of , (the Employee or you).
This document sets out your terms and conditions of employment and contains the written particulars of your employment as required under section 1 of the Employment Rights Act 1996.
Getting Started
- Your employer is. We agree to employ you in the capacity of from .
- Your normal workplace is , . Your job may involve some business travel or temporarily working at other locations but we don't envisage this involving more than a month's work outside the UK.
- All the terms of your employment are in this contract. If there is any inconsistency between this contract and any offer letter we sent you then this contract will prevail.
- is the date on which your continuous employment starts for legal purposes.
- Your duties are those that normally go with your job title including . You must take on reasonable additional or different duties when we ask you, to meet our reasonable business needs.
- You must be allowed to work in the UK to be employed by us and must tell us immediately if this is not the case. We can end your employment without notice or compensation if you lose or lack permission to work in the UK.
- You can only work for someone else or hold another business interest if we give you advance written agreement. If you break this rule, we can dismiss you without notice or payment.
- We can suspend you for a reasonable length of time in the circumstances, to carry out a disciplinary investigation or if we have another reasonable basis for suspension.
Pay and Expenses
- We will pay you £ in arrears. Payment will be by automated bank transfer or another method agreed between us. We will review your pay annually, in our sole discretion.
- We can deduct any money that you may owe us from your pay or other payments due to you.
- You are not entitled to reimbursement of expenses in connection with your duties under this Agreement unless we give advance written permission.
Hours of Work
- You must work reasonable additional hours to meet our business requirements without additional payment.
Holiday
- Our holiday year begins on . You are entitled to days' holiday per holiday year at your normal basic pay. This entitlement includes the usual public holidays. In the holiday year(s) in which your employment starts and ends, one-twelfth of your annual holiday entitlement will accrue for each full month of employment.
- You must take your holidays on dates that are convenient to us and that we agree in writing in advance. You should give us as much notice as you can of your wish to take holiday on a particular date giving notice of at least double the length of time you wish to take on holiday in one go. We may require you to take holiday on specific days as notified to you.
- When your employment ends, we will pay you in lieu of any accrued but untaken holiday entitlement. You must take your outstanding holiday entitlement during any notice period, if we ask you to. If you have taken more holiday than you have accrued then you must repay us for the days you have not accrued. Payment by you or us under this clause will be at the rate of 1/260th of your annual salary (or, if you are part-time, at 1/260th of your full-time equivalent salary) for each day of holiday.
- Unless agreed otherwise, if you do not take all of your holiday entitlement in any holiday year, we will not normally make any payment in lieu or increase your holiday entitlement in any subsequent year. However, carry forward may be permitted if a period of extended sickness absence, statutory maternity, paternity, shared parental or adoption leave has prevented you from taking leave in the relevant year and in this case you should contact your line manager or HR representative.
Sickness
- If you are ill or injured and cannot attend work you must tell your line manager or HR representative no later than 30 minutes before your usual start time or as soon as reasonably practicable, unless an extreme emergency does not allow for this. You must provide a reason for your absence.
- If you are off sick for seven days or less in a row, you must complete a self-certification form. If you are off sick for longer, you must give us medical certificates covering the whole period (except the first seven days).
- You must undergo a medical examination by our nominated doctor if we ask you to. We can see any report the doctor writes and discuss the contents with them. We can postpone your return to work following sickness absence until a doctor confirms that you are fit to work.
- During sickness absence, we will pay you Statutory Sick Pay (SSP) as long as you satisfy the relevant requirements. For the purposes of SSP, the agreed qualifying days are your normal days of work as specified in this Agreement.
- If your sickness absence is the fault of a third party and you can recover damages from that party you should notify us. If there are any claims or settlements you should keep us informed and pay us back any sum recovered from the third party to compensate you for lost earnings, which you have been paid for by us.
- We have the right to terminate your employment as set out in this agreement even if this means you lose the right to sickness or other benefits.
Collective Agreements
Pension and Other Benefits
Data Protection
- We will process personal data and sensitive personal data ('special categories of personal data') about you in accordance with our Data Protection Policy and Data Protection Privacy Notice, available from your line manager or HR representative or the Staff Handbook.
- 'Personal data' includes references, personal records, emails containing personal details, addresses and details of contractual benefits.
- 'Sensitive personal data' includes information about:
- your health, to monitor sick leave and take decisions about your fitness for work; and
- your racial or ethnic origin or religious or similar information in order to monitor compliance with equal opportunities legislation.
- You will comply with your obligations under our Data Protection Policy and other relevant policies.
- We will process your data in accordance with our Data Protection Privacy Notice, specifically to:
- meet our obligations under your employment contract; and
- ensure that we are complying with our legal obligations.
In other cases, we have a legitimate interest in processing your data before, during and after the end of the employment relationship.
- The Employer may transfer personal data and sensitive personal data outside the UK or European Economic Area in accordance with the Employer's Data Protection Privacy Notice.
Termination
- You or we can end your employment at any time by giving written notice of at least .
- We may end your employment without letting any notice period run its course by making a payment equal to the basic salary that would have been due during the unexpired notice period. We will also continue your contractual benefits over the notice period that would have applied or pay you the amount that those benefits would have cost us over the same period.
- We can terminate your employment without notice or payment for your notice period:
- if you commit any act or omission that we think is gross misconduct; or
- if you seriously breach your employment obligations (including under this Agreement); or
- if you do not have the right to work in the United Kingdom; or
- in any other situation that we have said allows us to do this (including in this Agreement or any handbook or written policy).
Garden Leave
- During your notice period, whether you or we gave notice, we can require you:
- to stay away from your workplace or our other premises;
- to carry out different or specified work or duties or carry out no work duties at all;
- not to behave as if you have authority to act on our behalf; or
- not to communicate with our suppliers, customers or clients, investors, employees, contractors, agents, trustees or representatives.
- During the period when this change or these changes apply, you will continue to be employed under this contract and entitled to receive your salary and all contractual benefits. Your obligations to us will continue and you may not work for any third parties or for yourself unless we give prior written consent.
Confidentiality
- For the purposes of this Agreement:
- Associated Employer has the meaning given by the Employment Rights Act 1996;
- Confidential Information means any information disclosed by or on behalf of the Employer (or any Group Business) to the Employee during their employment that at the time of disclosure (whether in writing, electronic or digital form, verbally or by inspection of documents, computer systems or sites or pursuant to discussions or by any other means or other forms and whether directly or indirectly) is confidential in nature or may reasonably be considered to be commercially sensitive, and which relates to the business and affairs of the Employer (or any Group Business) including but not limited to: (a) all Employment IPRs (b) all Employment Inventions and (c) all analyses, compilations, studies and other documents prepared by the Employee which contain or otherwise reflect or are generated from the information referred to above.
- Employment IPRs means Intellectual Property Rights you create in the course of your employment with us (whether or not during working hours or using our premises or resources) that:
- relate to any part of (or demonstrably anticipated business of) the Employer or any Group Business; or
- are reasonably capable of being used by the Employer or in any part of a Group Business.
- Employment Inventions means any Invention which is made wholly or partially by you at any time during the course of your:
- normal duties; or
- duties specifically assigned to you, if those duties are such, that an Invention might reasonably be an expected result (whether or not during working hours or using our premises or resources, and whether or not recorded in material form).
- Group Business means any business owned or operated by us or an Associated Employer or all of those businesses together, as the context allows;
- Intellectual Property Rights means without limitation all existing or future intellectual and industrial property rights, anywhere in the world including any Invention, patent, utility model right, copyright and related right, trade mark, trade name, internet domain name, design right, design, service marks, trade secret, database right, topography right, right in get-up, right in goodwill or to sue for passing off and any other right of a similar nature, whether registered (or capable of registration) and the right to apply for any of these; and
- Inventions mean without limitation, inventions, ideas and improvements, whether or not patentable and whether or not recorded in any medium.
- During your employment, you may have access to Confidential Information concerning us, and our business. During and after your employment, you must not use or disclose or allow anyone else to use or disclose any of our Confidential Information, except:
- as necessary to perform your duties for us, properly; or
- with our consent; or
- as required by law or ordered by a court that has jurisdiction; or
- to make a protected disclosure within the meaning of Section 43A of the Employment Rights Act 1996.
- As soon as your employment ends, however that happens, or earlier if we request it, you must:
- return to us, all property that you have or control that belongs to us or relates to our business including but not limited to all documents and any car, keys, swipe cards, laptops and mobile phones; and
- delete any such property and Confidential Information from any electronic device which belongs to you.
- You agree that if you do not comply with this clause, damages would not be an adequate remedy and we can apply for an injunction to prevent any (further) breach, without prejudice to any other remedy that we might pursue, including but not limited to claiming damages.
Intellectual Property
- You acknowledge that:
- all Employment IPRs, Employment Inventions and works embodying them shall be owned automatically and absolutely by the Employer to the fullest extent permitted by law. To the extent that they are not automatically owned by the Employer, you hold them on trust for us; and
- because of the nature of your duties and the particular responsibilities arising from the nature of your duties, you have, and shall have at all times while you are employed by us, a special obligation to further the interests of the Employer.
- You agree:
- to promptly and on their creation, give us full written details of all Employment Inventions you make wholly or partially during the course of your employment;
- at our request, and in any event, on the termination of your employment, to give us all originals and copies of correspondence, documents, papers and records on all media which record or relate to any of the Employment IPRs;
- to use your best endeavours to execute all documents and do all acts both during and after your employment by us as may, in the opinion of the Employer, be necessary or desirable to vest the Employment IPRs in the Employer, to register them in the name of the Employer and to protect and maintain the Employment IPRs and the Employment Inventions;
- to give us all necessary assistance to enable us to enforce our Intellectual Property Rights against third parties, to defend claims for infringement of third party Intellectual Property Rights and to apply for registration of Intellectual Property Rights, where appropriate throughout the world, and for the full term of those rights;
- not to attempt to register any Employment IPR nor patent any Employment Invention unless we request that you do so; and
- to keep confidential each Employment Invention unless we have consented to its disclosure in writing.
- You waive all moral rights under the Copyright, Designs and Patents Act 1988 (and all similar rights in other jurisdictions) which you have or will have in any existing or future works.
- You hereby irrevocably appoint the Employer to be your attorney in your name and on your behalf to execute documents, use your name and do all things which are necessary or desirable for the Employer to obtain for itself or its nominee the full benefit of this section.
Employer's Procedures
- Our policies and procedures, including our Disciplinary Procedure and Grievance Procedure, are available from your line manager or HR representative. You must familiarise yourself with and comply with our policies and procedures including any new or amended ones introduced after this Agreement. No policy or procedure is part of your contract of employment, unless the policy or procedure specifically says that it is.
- If you are dissatisfied with any disciplinary decision relating to you (including any decision to dismiss you) then you should notify your line manager or HR representative in writing, specifying the grounds for your dissatisfaction. Further information can be found in the Disciplinary Procedure.
- If you wish to seek redress for any grievance relating to your employment then you should notify your immediate supervisor in writing, specifying the grounds for your grievance. If your grievance relates to your immediate supervisor then you can instead notify the HR representative or escalate your complaint to the director/manager. Further information can be found in the Grievance Procedure.
Amendment to Terms and Conditions
- We can make reasonable changes to any of the terms of your employment whenever we want to. We will notify you in writing of any change before the date it comes into force.
Notices
- Other than dealings in the normal course of business, any notice, request, demand or other communication (collectively Notices) to be given under this Agreement will be deemed to be duly given by either party if:
- sent by first class post addressed to the other party at (in the case of a Notice to the Employer) its registered office or place of business for the time being or (in the case of a Notice to you) the address that you have last notified to us; or
- given personally to (in the case of a Notice to the Employer) a director, partner, chief executive or equivalent of the Employer or (in the case of a Notice to you) to you; or
- sent by electronic mail to the business email address of the chief executive or equivalent in the case of the Employer and your email address as notified in writing to the Employer from time to time.
- Any such Notice will be deemed to have been given:
- if sent by first class post, 48 hours (or, if sent to or from a place outside the United Kingdom, seven days) after the time of posting and, in proving service, it will be sufficient to prove that the envelope containing such Notice was properly addressed, stamped and put in the post;
- if sent by email, 24 hours after sending.
Governing Law
- This Agreement shall be governed by and interpreted according to the law of England and Wales and all disputes arising under the Agreement (including non-contractual disputes or claims) shall be subject to the exclusive jurisdiction of the English and Welsh courts.
Third Party Rights
- No one other than you and us have any rights to enforce any part of this agreement.
| _________________________________ | _________________________________ |
About Employment Contracts
Learn more about making your Employment Contract
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How to make an Employment Contract
Making an Employment Contract online is simple. Just answer a few questions and Rocket Lawyer will build your document for you. When you have all the information about your employment relationship prepared in advance, creating your Employment Contract is a quick and easy process.
You’ll need the following information:
Employer and employee details
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What are your business’ details?
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What are your future employee’s details?
Job details
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What’s the job title?
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When will the job start?
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Is it a permanent or a fixed-term position?
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Will there be a probation period?
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What does the job involve?
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Where will the employee’s place of work be? Will you include an option to change this in the future?
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What will the hours of work be?
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Is there a trade union relevant to this employee?
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How much notice is required to end the employment relationship?
Employee entitlements
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How much will the employee be paid?
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Will the employee receive any bonuses (eg share options, health insurance, or overtime pay)?
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How much holiday is the employee entitled to per year? Does this include bank holidays?
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What pension provisions will you offer the employee?
Employer policies
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What are your sickness provisions? Are they contained in a sickness policy?
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What are your data processing and privacy practices? Do you monitor staff or process criminal data?
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Common terms in an Employment Contract
An Employment Contract sets out the parameters of the employment relationship between an employer and an employee. To do so, an Employment Contract will typically include:
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employer and employee details - the name, address, and other details of the business or individual who is the employer and of the employee
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job specifications - sets out when and where the work will take place and what it will entail. This also includes rights and requirements such as the requirement for the employee to have permission to work in the UK and the employer’s right to carry out disciplinary investigations
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pay and expenses - explains what the employee will be paid and reimbursed for, and how this will happen
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absence provisions - setting out when and how the employee can take sick leave and annual leave. This includes setting out employees’ statutory entitlements
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collective agreements - collective agreements are any agreements in place between the employer and the employee’s representatives (eg representatives from trade unions or staff associations) which allow the organisations to negotiate some employment terms on behalf of its collective members. Matters negotiated in this way may include, for example, working conditions or hours
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pensions and benefits - outlines pension programmes and benefits that the employee is entitled to, such as overtime pay, insurance, and share options
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data protection - a commitment by the employer to adhere to:
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the rules and procedures in their data protection policies, and
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their obligations under data protection law (ie the UK General Data Protection Regulation (GDPR) and the Data Protection Act 2018) to uphold employees’ data security and privacy rights when handling their personal information
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termination - specifying when and how the employment relationship can be ended
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garden leave - setting out the employer’s right to ask the employee not to work (and not to access their premises or act as if they still have authority to represent the employer) during their notice period. Garden leave is sometimes used if an employer wants to prevent an employee from gaining more information from the business whilst seeing out their notice, or if they want to have a new person start in the role straight away. Employees must be paid as usual during garden leave
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confidentiality - setting out the rules and procedures for protecting any of the employer’s confidential information (eg business strategies or new inventions) that the employee has access
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intellectual property - setting out who owns any intellectual property (eg creations such as artistic works, inventions, designs, or logos) created during the employment relationship.
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employer’s procedures and notices - setting out how the employer and employee should navigate any disciplinary, grievance, or other issues
If you want your Employment Contract to include further or more detailed provisions, you can edit your document. However, if you do this, you may want a lawyer to review the document for you (or to make the changes for you) to make sure that your modified Contract complies with all relevant laws and meets your specific needs. Use Rocket Lawyer’s Ask a lawyer service for assistance.
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Legal tips for employers
Setting out the parameters of an employment relationship in a formal contract helps the relationship to begin with clarity and efficiency. To manage this process as well as possible, consider the following advice:
Make sure that you uphold employees’ employment rights
Employment law is complex, and it grants employees many rights with complex eligibility criteria attached. It’s important that you make and follow provisions for ensuring these rights are upheld, including employees’ rights to:
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receive statutory sick pay (SSP)
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be given certain periods of notice if their employment is changing or ending
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take a certain amount of paid holiday per year
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take time off to have children (ie family leave), for example by taking maternity leave, paternity leave, or adoption leave
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take time off following the death of a child (ie parental bereavement leave)
If you fail to uphold an employee’s employment rights, costly and time-consuming cases may be brought against you in an Employment Tribunal. Creating employment policies (eg a health and safety policy, maternity policy, or annual leave policy) can help you to keep on top of your obligations. For more information, read HR and see our HR policies checklist.
Consider providing a separate job description
If the role you’re hiring for is advanced or complex, it may be beneficial to create an in-depth Job description in a separate document to the Employment Contract. This allows you to set out the employee’s responsibilities, the procedures they’ll follow, and your expectations of them in greater detail, to bring greater clarity to the employment relationship.
Consider your employment terms
Hiring somebody is a time-consuming and sometimes costly undertaking. If you want an employee to keep working for you long-term, you should make sure that you’re offering them employment on terms which are fair and adequately favourable to them, to encourage them to stay.
Understand when to seek advice from a lawyer
In certain circumstances, it’s a good idea to consult a lawyer about your Employment Contract or to have them review it. You should Ask a lawyer for advice if you are:
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hiring employees who will work overseas for more than one month
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hiring employees who will be involved in creating intellectual property that is central to your business
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hiring very senior employees or company directors
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hiring employees based outside England, Wales or Scotland
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unsure whether you’re meeting your legal responsibilities as an employer
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Employment Contract FAQs
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What should an Employment Contract include?
This Contract of Employment template covers:
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agreed hours and days of work
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annual leave entitlements and conditions
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terms and conditions dealing with sickness and injury
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the duties the employee will undertake whilst in the role
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pay and benefits
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the employee’s place of work
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disciplinary and grievance procedures
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arrangements for ending employment
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information about trade unions and pensions
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Why are Employment Contracts important?
Employers are legally required to give employees a written statement of particulars on (or before) the first day of their employment. This Employment Contract complies with the requirement for a written statement of particulars. Besides fulfilling legal obligations, Employment Contracts are an important method of communication between an employee and their employer, which set out many of the rules and expectations for the employment relationship. Employment Contracts also help employers to be compliant with the Employment Rights Act 1996, the Employment Act 2002 and the Equality Act 2010.
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How can an employee's place of work be moved?
If you’re likely to move premises or operate from more than one site in the future, you should include an express term in your Employment Contract specifying this and stating that the employee’s place of work may change. Such terms are sometimes called ‘mobility clauses’. Doing this will make it easier for you to legally move an employee to a new place of work if required. To make a term allowing you to move an employee more reasonable and acceptable, it is common for an Employment Contract to specify a geographical limit on the area within which the employee’s place of work can be moved (eg within Greater Manchester).
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Which takes priority, the offer letter or the Employment Contract?
When you give an employee both an Offer letter and a separate Employment Contract, it's important to say which document takes priority if there is any difference between them. This Employment Contract template specifies that it takes priority over an earlier job offer letter.
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Do I need to make a separate job description?
Using a separate Job description can be the best approach to providing job information if you want to give a detailed description of a role. It can help bring clarity, particularly for mid- to senior-level employees. However, you should only reference a separate job description in your Employment Contract if you will genuinely create one. If you want to keep things simpler, you can include a brief explanation of the role in your Employment Contract.
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What are the benefits of including a probationary period?
A probationary period is a period at the start of a new employment relationship, during which an employee can be dismissed with less notice than usual if the employer is unsatisfied with their performance in the role. For new hires, it is helpful to have a probationary period (often 3 months) during which the employee can be assessed. It is unusual to use a probationary period when an existing employee enters into a new Employment Contract. You can decide how long you want a probation period to be, but you should not make it unreasonably long
Employers may extend a probationary period if an employee has not achieved set targets, if they have performed poorly, or if they have been largely absent.
Probationary periods will not stop an employee from gaining unfair dismissal rights when they reach the qualifying service period.
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How many hours can the employee legally be required to work?
This Employment Contract template allows you to specify regular or irregular hours of work. For example, you may specify 9:00 am - 5:00 pm Monday - Friday, or you could specify that a certain number of hours should be worked per week at times to be agreed.
The Working Time Regulations 1998 gives employees the right to work no more than 48 hours per week (calculated as an average over 17 weeks). This includes work that the employee performs for other employers. You must not state in an Employment Contract that an employee is required to work more than 48 hours per week, unless they formally opt out of the 48-hour limit. If an employee works (or will work) at or close to the maximum, you can ask them if they are willing to opt out of the 48-hour limit.
Opting out requires the employee to sign a written statement that they are willing to opt out of the 48-hour limit. If an employee is not willing to opt out, you must take reasonable steps to ensure that working time stays under the limit.
Employees must also have either 24 hours of uninterrupted rest per week or 48 hours per fortnight. For more information, read Pay and benefits.
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Is there a minimum holiday entitlement set by law?
Employees are legally entitled to at least 5.6 weeks of paid holiday per year. For an employee working five days per week, this is 28 days, either inclusive or exclusive of bank and public holidays. Part-time employees are entitled to a pro-rata entitlement (ie in proportion to the number of hours they work), for example, an employee working three days per week would be entitled to 16.8 days' holiday. Employers can agree to a greater holiday allowance. For more information, read Employee holidays.
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Are employers required to make pension provisions?
All employers are required by law to provide a workplace pension for certain employees. This includes the automatic enrolment (or auto-enrolment) duty, which applies to all staff who:
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are aged between 22 and the current state pension age
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earn at least £10,000 per year (for tax years up to at least 2022/23)
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work in the UK
Employers must:
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pay at least 3% of an employee’s salary before tax into a workplace pension, and
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deduct at least 5% from the employee’s salary to contribute to the pension (leading to a minimum total contribution of 8%)
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Should I use a fixed-term contract?
Fixed-term contracts (ie contracts that end on a specified date rather than continuing indefinitely) can be useful when you know from the start that the employment will end after a defined period. Fixed-term employees are protected by law from being treated less favourably than permanent employees and, if they have sufficient length of service, from unfair dismissal.
If an employee has at least four years' qualifying service and their fixed-term contract is renewed or replaced at least once, their contract may be automatically converted into a contract of indefinite duration.
For more information, read Fixed-term employment contracts.
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How long should a notice period be?
The minimum notice period (ie the minimum amount of notice you can give employees before dismissing them) for employees who have continuously worked for you for more than one month and less than two years is one week. However, offering a longer notice period can help make your offer of employment more attractive to prospective employees, as this offers them greater income security. It is common to say that one week's notice will apply during the probationary period. If an employee has worked for you for less than one month it is lawful to dismiss them without notice, but this is unusual.
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Can I transfer employee data out of the UK or EEA?
This document gives you the right to transfer employee data out of the UK and the European Economic Area (EEA). However, the employer can only transfer personal data outside of the UK or EEA if there are appropriate safeguards in place (eg use of certain model clauses). Such safeguards should be set out in the employer's Data protection policy. For more information, read International transfers of personal data.
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