Why spend any time on employment contracts? Money, for a start
When you change jobs, you might notice your new employment contract is different to the last one. Apart from different logos and fonts, it’s worth checking for any significant differences quickly – maybe more or less holiday than you’ve had before.
So why should anyone spend any time thinking about employment contracts? If you’re a manager and need to give one to a new employee, surely you can just use another company’s contract or download a generic one? Right?
Sure you can and good luck if you choose to. On the plus side, it saves you having to spend time thinking about what happens in certain situations, like how much to pay someone who goes off sick and can’t return to work for ages – or how much to pay someone who doesn’t work out and you have to say goodbye to them.
On the down side, it means you’ll be fire-fighting when these things crop up and you’ll have to make some tricky decisions quickly. You might have a few surprises if these things aren’t pinned down in the contract you’ve used, but never got round to reading properly.
But there might also be other things that could trip you up because it never crossed your mind that situation could happen and you didn’t see any risk. We’re employment law geeks with experience of the sharp ends of these sorts of issues and the big risk is always unexpected costs. For example, paying thousands of pounds to say goodbye to someone who isn’t working out – or even legal claims.
It’s a legal agreement. If you don’t put a bit of thought into shaping a contract, or reading it, then you’re going to struggle to answer the question: “Where does it say that in my contract?”
Contracts can be changed. For a start, you can revise them before using them again when you hire new people. The important thing – whether you work with an expert or stick to DIY – is to make sure that everything in your employment contract is a good fit with your company. Do you want to stick to legal minimums for everything or tweak a few things, for example to show you support a good work-life balance or you’re a family-friendly company?
Think about both the obvious areas, such as holiday, and the “worst case scenarios” – eg someone’s likely to be off sick for many months and asks if they will keep getting paid . Then when you have to deal with difficult situations affecting an employee’s life, you’ve had time to consider and you’ve made a decision you’re happy with. If you’re new to employing people: trust me, you’ll get all kinds of experiences pop up over the years.
Contracts aren’t all the same; apart from some legally required minimums, you can make your own decisions. As legal agreements, contracts are a fundamental part of the employment relationship and can be pored over and argued about if the boss and employee fall out. So read them and think them through before you sign them.