By law an employer must provide their employees with details of their employment terms and conditions. This can be verbal or in writing, but is best achieved by an employer issuing a detailed written Contract of Employment to each employee.
This Contract of Employment specifies an employee’s duties and responsibilities, so an employee knows exactly what is expected of them, and what they can expect from their employer.
This guide to standard terms and conditions of employment examines some of the key clauses to include within an employee’s contract or, in the absence of a written contract, a statement of employment particulars.
What are standard terms and conditions of employment?
Standard terms and conditions of employment are the rules that regulate the working relationship between the employer and employee, typically set out within a written contract of employment. These are the rules by which the parties will be bound until employment is brought to an end, either through dismissal or resignation, or if different terms are agreed.
The terms and conditions of employment are specifically designed to define the respective rights and responsibilities as between the parties, providing a clear reference point which can be referred back to in the event of any uncertainty. In this way, these rules can reduce the potential for conflict, but also provide the parties with some legal redress, for potential breach of contract, in the event that either the employer or employee fails to follow them.
There are various standards terms and conditions that must be agreed with the employee prior to commencement of their employment, including:
- when the employee will start work
- how much and how often the employee will get paid
- any benefits to which the employee is entitled
- their hours and days of work, as well as if and how these may vary
- any paid holiday and sick pay entitlement
- how much notice the employee will get on termination
- the employee’s place of work and whether they might have to relocate
- how long the job role is expected to last, with an end date for any fixed-term contract
- how long any probation period is and the conditions of that period.
Express and implied employment contract terms
Express terms are those terms as specifically agreed between the employer and employee, either verbally or in writing. Importantly, contractual terms do not necessarily need to be written, or even contained within an employment contract, in order for them to be legally binding. A contract of employment can be either written, verbal or both, although an express term must still be one that has been explicitly discussed or defined in writing.
An express term typically relates to core contractual matters, including the employee’s pay, benefits, hours, holiday, sickness and notice. There may also be express terms relating to disciplinary and grievance procedure, or things like pension entitlement, although these are often signposted within a written contract, and therefore incorporated into the employer-employee agreement, but contained in more detail within various separate documents.
Additionally, where there is a written contract, there may be a number of express terms to help protect the employer’s legitimate business interests. For example, there may be express provision to prevent an employee from working for, or disclosing confidential data to, a competitor, or even allowing the employer to make certain contractual changes.
In contrast, an implied term is a contractually binding term that is not expressly stated by the parties, either in writing or otherwise, but can arise by implication in the context of the employment relationship. These can be terms implied by common law, as a legal incident of that relationship, where often these terms are so obvious that they are assumed. This could include, for example, an obligation of mutual trust and confidence between the parties, or a duty to serve an employer with good faith and fidelity.
A term can also be implied into an employment contract by fact, or by custom and usage. This could be to make commercial sense of the contract, for example, an implied term for an area sales manager with a company car to hold a driving licence, or where something has been done regularly in the business over a long period of time, like paying an annual bonus. Finally, there are various terms that are implied automatically by statute, for example, the employee’s right to paid annual leave or to a minimum notice period. Even though the employer and employee are free to agree whatever terms and conditions of employment they wish, they cannot contract out of these basic statutory rights.
Employment terms implied by statute
Terms implied by statute are specifically designed to provide certain minimum legal rights for employees, where any terms seeking to limit or restrict the individual’s basic statutory rights will not be enforceable. The employee will still retain the rights prescribed by law.
There are various rights implied by statute that can impact the standard terms and conditions of employment. When deciding on these terms and conditions, we set out below those terms that need to be expressly agreed, and those terms that, unless agreed between the parties, will be implied into the contract of employment as a matter of law:
- when the employee will start work: the employee’s start date is a term that must be expressly agreed in advance with the employee
- how much and how often the employee will get paid: this is also a matter of agreement, although the employee must be paid at least the national minimum wage
- any benefits to which the employee is entitled: these are a matter of agreement
- the employee’s hours and days of work: this is a matter of agreement, provided the employee is not required to work more than the maximum working hours each week, where agreement has not been reached to opt of the maximum 48-hour weekly average
- any paid holiday and sick pay entitlement: an employee is entitled to 5.6 weeks’ paid annual leave and up to 28 weeks’ statutory sick pay if they meet the qualifying conditions
- how much the employee will get on termination of employment: as a minimum, an employee must be given 1 weeks’ notice for up to 2 years’ employment, or 1 week for each week between 2-12 years, but capped at 12 weeks for over 12 years’ employment
- the employee’s place of work: this is a matter of express agreement with the employee
- how long the job role is expected to last: this is again a matter of express agreement
- how long any probation period is and its’ conditions: this is also a matter of agreement.
Written statement of employment particulars
Even though, in theory, a contract of employment does not need to be in writing, certain standard terms and conditions must now be set out in a written statement. By law, an employee is entitled to a written document stating their main working conditions. This is known as a statement of employment particulars. This statement must include:
- the employer’s and employee’s name
- the employee’s job title or a description of their work
- the employment contract start date
- the employee’s salary and pay day
- any other benefits, for example, childcare vouchers and lunch
- the employee’s hours and days of work, including any variations
- if the employee will have to work Sundays, nights and/or overtime
- the employee’s holiday entitlement, and if this includes public holidays
- the employee’s place of work and if they might have to relocate
- if an employee works in different places, their location, and the employer’s address
- the length of the employee’s contract of employment, and what the end date is if the employee will be working under a fixed-term contract
- the length of any probation period and the conditions of this period
- any obligatory training, and whether or not this is paid for by the employer.
The written statement is made up of a main document, know as a principal statement, plus a wider written statement. The employer must provide the principal statement on day one of employment. They must also provide the employee with information about sick pay and procedures, the employee’s other paid leave, such as maternity and paternity leave, and notice periods. The employer can include this information within the principal statement or a separate document, such as in a staff handbook or intranet. The wider written statement must be provided within 2 months of the employee’s start date. This must include information about pension schemes, collective agreements, any right to non-compulsory training provided, as well as disciplinary and grievance procedures.
Importantly, a distinction must be drawn between a written statement of employment particulars and a contract of employment. A written statement does not constitute the employment contract, although it is evidence of the same, and must set out the main terms and conditions that will govern the working relationship between employer and employee.
Failure to provide a written statement
If the employer fails to provide an employee with their written statement of employment particulars, or their statement does not contain all the necessary information as required by law, the employee may try to resolve this informally or even lodge a formal grievance. If the employee is still unhappy with the lack of any statement, or the information provided, they may be able to lodge a complaint before the employment tribunal. The tribunal will then decide what the employment particulars in the statement should have been.
Where an employee wins a case before the tribunal about another issue, for example, unauthorised deductions from their wages, if there has also been a problem with their written statement, the employer can be ordered to pay the employee compensation for this. This can be up to 4 weeks’ pay, although there is a prescribed cap on the weekly amount.
Breach of employment terms and conditions
The terms and conditions of employment are legally enforceable provisions that govern the working relationship between the employer and employee. If either breaks one of these terms, this will be a breach of contract. Examples of breach include an employee’s failure to attend work without good reason or the employer’s breach for non-payment of wages.
As with issues around written particulars, these types of dispute can often be resolved informally, or failing that, by way of any disciplinary or grievance procedure set out within the employment contract itself. However, where a dispute cannot otherwise be resolved between the employer and employee, the matter may result in the terms of the employment contract coming under close scrutiny by either the courts or tribunal. In these circumstances, where there is any ambiguity in the terms of the employment contract, or where any clauses have been drafted poorly or too widely, these may be unenforceable.
Changing standard terms and conditions of employment
A contract of employment can only be varied in limited circumstances. This includes where the employee agrees to the change, where there is contractual provision to allow for unilateral change, such as some form of flexibility clause, or through collective agreement.
A collective agreement is an agreement formed with employee representatives from, for example, trade unions or staff associations. This allows for collective bargaining of terms and conditions including pay or working hours, although these types of changes can only be enforced where they have been fully incorporated into the employment contract.
If the employer is looking to effect a change to an employee’s working conditions under a flexibility clause, they must always be careful to act within the scope of that clause and to act reasonably at all times, providing the employee with reasonable notice of any change. The existence of this type of clause does not necessarily mean that this will be enforceable in every case. For example, where the employment contract includes a mobility clause requiring an employee to work at a different office or site, the employee should always be consulted first to see if there are any reasonable objections that may prevent them from working elsewhere, for example, where it would cause severe disruption to family life.
Finally, where any changes are made to an employee’s working conditions, either by agreement or following a contractually acceptable unilateral change, the employer must notify the employee of the change in writing within a month of this change taking effect.
DavidsonMorris’ employment lawyers work with employers on all aspects of workforce management, including reviewing and drafting employment documentation such as offers, contracts and statements of written particulars. We have particular expertise in disputes relating to contract termination.
Working closely with our team of human resource specialists, we offer a holistic solution to support with legal risk management while protecting the best interests of the organisation in finding, onboarding and retaining best talent. For advice on a specific issue, speak to our experts today.
Employment Contract Standard Terms & Conditions FAQs
What are five terms and conditions of employment?
There are typically in excess of five terms and conditions of employment, including both express terms, explicitly agreed between the employer and employee, and those terms implied into the contract, either by law, by fact, or by custom and usage.
What is included in terms and conditions of employment?
The terms and conditions of employment are the elements of a contract governing the working relationship between the employer and employee. These includes things like salary, holiday and sick pay, working hours, place of work and notice periods etc.
What terms should be included in an employment contract?
There are various terms and conditions that should be included in an employment contract. These include the employee’s start date and working hours, their pay and benefits, as well as things like holiday and sick pay, and notice periods.
What are the 4 elements of a valid employment contract?
The key elements of a valid employment contract are: offer, acceptance, consideration and intention to create legal relations. These are legally complex terms, but essentially mean that the parties have agreed terms and intend those terms to be contractually binding.
Last updated: 15 December 2022