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Not issuing contracts of employment can cost you money!

23/09/2016

The contract of employment is formed when you offer someone a job and they accept it. Even if there is nothing in writing, there is still a contract in place - it's just a verbal contract.

Many businesses will make an offer of employment and will not put the contract of employment in place until after the employee has started.  This can cause all sorts of problem and incur additional unnecessary costs, as a recent case demonstrated.

What happened in this case was that an offer of employment was made and was then withdrawn.  The individual who was offered the job sued the Company for breach of contract (for the notice period). However, there was nothing in writing to confirm what the notice period was. Because of this, the Employment Tribunal awarded what it thought was reasonable - a month's salary of £3000.00.

Had there been a written contract that confirmed the notice period, for example, "one week's notice during the probationary period", then the tribunal would only have been able to award a week as the written terms would have to be applied.

So our recommendation is to make sure you have written contracts of employment and that you issue these at the same time you make the offer of employment. Don't wait until the employee joins or for the 8 weeks allowed before you need to issue the written statement of terms. Do it all up front and then it's done....this can prevent all sorts of misunderstandings and also ensures you meet your legal requirements.

There are lots of other ways that good contracts of employment can 'save you money' or prevent you having to make unnecessary payments. CLICK HERE to read an extract from my book ‘HR for SMEs'.

For solutions to contracts of employment speak to our HR consultants- call us on 01702 216573 or for our cost effective solutions visit www.contractsinabox.co.uk.

Related topics: For information on statutory notice periods on our employment facts page CLICK HERE.

Paula Fisher. You can contact Paula at paula@practical-hr.co.uk

 


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