The Importance of Having an Effective Contract
A written statement of employment particulars – also known as the contract of employment is legally required for all employees. Contracts are the basis of the employment agreement and offer assurance and certainty for both employee and employer – which is getting your employee contract right is so important to get this right!
The First Impression
So why is it important? A potential new employee can gain a lot of knowledge from the contract, and this is the first opportunity for the organisation to showcase its professionalism and commitment to its employees. The employment contract really can act as the first employee engagement opportunity for your organisation.
If the process is handled badly, it can put off new employees from joining an organisation. For instance, delays in sending out contracts, and errors in the details can leave a recruit with the impression that the organisation does not care about their employment – this can be enough to have them looking elsewhere before they have even begun.
As simple as it sounds it is important to get all contracts signed and to have a process in place to ensure this does happen. Retaining contracts and storing them confidentially in one place to ensure only those who should have access do have access, is an essential part of compliance with GDPR and overall good practice. In addition, having a procedure in place to ensure version control to prevent duplication errors and potential disputes.
Accuracy and consistency are key. Have a procedure in place which you know works and keeps everything up to date and accurate. There will be occasions when changes do occur and contracts are updated, or amended due to e.g., changing working hours. All these employment documents should be securely saved where you can see current details and any historical copies.
Updating the Contract
All employers want every new employee to have a good on-boarding process and remain engaged with the organisation for as long as possible. During the employee’s tenure the relationship will evolve and the employees’ terms may need to be updated. For example, good practice would recommend either a new contract or contract amendment for the following changes (this list is not exhaustive):
· New role/position
· Change in working location or office
· Change in working hours
You may have introduced hybrid working due to the pandemic and plan to keep this new working option going forward. While it is good practice and recommended to update contracts with the place of work to reflect any changes to place of work – Hybrid working can be agreed upon as part of a flexible working policy. However, there are some consequences when implementing new ways of working and not updating contracts of employment.
Custom & Practice
As the employment relationship evolves some practices can start with no contract update as they improve working life. In general, these can be ok when everyone agrees to the changes, and they make sense for the organisation. However, there are pitfalls to be wary of as changes over time can become custom and practice and by default become a part of the employment contract.
For example, employees who have worked from home and enjoyed hybrid working for several years may challenge a change request to go back to the office and revert to the working location in their original contract. Changes to employment contracts or practices which have become custom in an organisation can happen – but you may need to negotiate with employees to gain mutual consent to make any further changes.
Always Check the Contract
When any questions arise the first place to look for guidance is the employment contract. The contract gives you the basis of the employment agreement and will often point you in the right direction of where you need to go.
Therefore it is so important to keep employment terms up to date and to ensure you have a process in place to ensure contracts are signed when they should be and any amendments/letters informing employees of change are saved and stored securely.
We’d love to help you make sure your contracts are both legally compliant and easy to understand, please get in touch, letstalk@albanyhr.com, 0131 364 4186.