A Contract of Employment is a vital document in the working relationship between an employer and an employee. It sets out the terms and conditions under which an individual is employed and is essential for protecting the rights and obligations of both parties. While many workers might assume they will receive their contract upon starting a job, the timing and legal requirements surrounding the issuance of a contract can vary.
In this article, we will explore when you should receive a contract of employment, the legal implications of not receiving one, and the key elements that should be included in the contract.
What Is a Contract of Employment?
A Contract of Employment is a formal agreement between an employer and an employee that outlines the terms and conditions of employment. It establishes the legal framework within which the employment relationship operates and protects the interests of both parties.
Key components of a typical Contract of Employment include:
- Job title and role description
- Working hours and schedule
- Compensation (salary or hourly wage)
- Holiday entitlement and sick leave
- Notice periods for termination
- Employee benefits (if any)
- Health and safety obligations
- Confidentiality and intellectual property clauses
This contract serves as a reference point for resolving disputes and ensures clarity regarding what is expected from both parties during the employment period.
When Should You Receive Your Contract of Employment?
The timing of receiving a Contract of Employment depends on various factors, including the jurisdiction and the nature of the employment relationship. Below is an overview of the general expectations surrounding when an employee should receive their contract.
Upon Starting Employment
In most cases, it is best practice for employees to receive their contract of employment before or on the first day of employment. This allows the employee to fully understand the terms of their employment before they begin working. While this is not always mandatory, it provides clarity and ensures that both parties are aligned from the outset.
However, it is important to note that there is a distinction between written contracts and verbal agreements:
Written Contract: A formal, written contract is typically provided by the employer at the beginning of the employment relationship.
Verbal Contract: Some employers may initially rely on verbal agreements to establish employment terms. However, even in the absence of a formal written contract, the employee is still considered to be under an employment agreement and may still have rights under labor laws.
In some jurisdictions, a written contract or written statement of employment particulars is a legal requirement.
Legal Requirement: Within Two Months of Starting Work
In some countries, such as the UK, there is a legal obligation for employers to provide a written statement of employment particulars. This document must be issued within two months of the employee starting their employment. While this statement is not the same as a full contract, it must include core information such as:
- The names of the employer and employee
- The job title and job description
- The start date and length of employment (if fixed-term)
- The pay arrangements
- Work hours and location
Failure to provide a written statement of employment particulars can result in penalties for the employer. If the employer does not provide this documentation within the legally required timeframe, the employee may have the right to pursue legal action to enforce their entitlement.
In other jurisdictions, the timeline for issuing a contract may vary, so it is essential to be aware of the local laws governing employment contracts.
In the Case of Fixed-Term Contracts
For employees working under a fixed-term contract (i.e., employment for a set period), the employer is still required to provide a contract at the start of the employment relationship. This contract must detail the terms of employment, including the specific end date of the contract. It is also essential for the contract to address whether the employee is eligible for permanent employment after the contract ends or if it will terminate without renewal.
Temporary or Casual Employment
In the case of temporary or casual workers, employers are often less likely to provide a formal contract. However, temporary or casual employees still have the right to receive a written statement of employment particulars or a formal contract if their employment lasts for more than one month. The timing of the contract for temporary workers may depend on the length and nature of the employment, but ideally, it should be provided as soon as the terms of employment are agreed upon.
What Happens If You Don’t Receive a Contract of Employment?
Failure to receive a contract of employment can create a range of legal challenges for both the employer and employee. If an employer does not provide an employment contract, employees may still have rights under statutory employment law, but it can be more difficult to resolve disputes regarding the terms of the employment.
Employee Rights Without a Formal Contract
Even without a formal contract, employees have basic statutory rights that apply by law. These include:
Right to Minimum Wage: Employees are entitled to at least the minimum wage as prescribed by law, regardless of whether a written contract is in place.
Holiday Entitlement: Employees have a legal right to paid annual leave, and employers are required to grant this entitlement even in the absence of a contract.
Right to Rest Breaks and Working Hours Limits: Employees are entitled to rest breaks, limits on working hours, and protection against excessive work hours.
Right to Equal Treatment: Employees are entitled to be treated fairly and without discrimination in relation to pay, hours, and work conditions.
However, the absence of a written contract can make it difficult to resolve issues such as:
Termination Procedures: Without a contract specifying the notice period, both employer and employee may be unclear on what is required to terminate the employment.
Disputes Over Job Responsibilities: Without a clear job description, disagreements may arise over the employee’s duties, leading to disputes and potential legal issues.
Legal Consequences for Employers
Employers who fail to provide a contract of employment may face legal consequences. For example:
Non-compliance with Labor Laws: Employers may violate employment laws that require them to provide written documentation to employees, which can lead to legal penalties.
Difficulty in Defending Disputes: In the absence of a clear, written agreement, employers may face challenges defending themselves in employment disputes. For instance, it may be harder to prove the terms of the employee’s role or clarify expectations regarding termination.
Claims for Unfair Dismissal: Employees who have been employed for a significant period may claim unfair dismissal if they are dismissed without clear terms being set out in a contract.
In some jurisdictions, the employer may be ordered to compensate the employee for not providing a written contract or may be required to fulfill the contract terms retroactively.
What Should Be Included in a Contract of Employment?
A Contract of Employment should clearly outline the terms and conditions of employment to avoid ambiguity. The key elements that should be included in an employment contract are as follows:
Job Title and Responsibilities
The contract should specify the employee’s job title and clearly define their duties and responsibilities. This ensures that both parties understand the scope of work expected.
Pay and Benefits
The contract must state the employee’s rate of pay, how and when they will be paid, and any additional benefits, such as pension contributions, bonuses, or health insurance.
Working Hours
The contract should outline the employee’s expected working hours, including any overtime provisions and the work schedule.
Holiday and Sick Leave Entitlement
The contract should detail the employee’s holiday entitlement and sick leave arrangements, along with the procedure for taking leave and the payment structure during sick leave.
Termination Clause
A clear termination clause should specify how either party may terminate the contract, including notice periods and grounds for dismissal. This helps avoid disputes if the employment relationship needs to end.
Confidentiality and Non-Compete Clauses
Some contracts include confidentiality agreements to protect the employer’s business interests and non-compete clauses that prevent the employee from working for competitors after leaving the company.
Conclusion
A Contract of Employment is an essential document that helps to formalize the employment relationship and protect the interests of both employers and employees. Employees should receive a written contract or a statement of employment particulars within a reasonable time after starting their role—typically within two months. This document provides clarity on working hours, pay, responsibilities, and termination procedures, and ensures that both parties understand their rights and obligations.
If you have not received a contract of employment, it is important to clarify the situation with your employer. Understanding your rights and the legal requirements surrounding employment contracts can help you avoid potential disputes and ensure a fair and transparent working environment.
If you are uncertain about your employment contract or if you have not received one, it may be worth consulting a legal professional to ensure that your rights are protected and your interests are represented.
Related articles:
When Should I Get My Contract of Employment?
Do I Have to Sign a Contract of Employment?
What Is a Common Law Contract of Employment？