Blog>Trade>Business Management>What is required in a small business employment contract?
Last updated: 19 December 2024
What is required in a small business employment contract?
Looking to take on new staff? Then you'll need to know how to create a small business employment contract. Here's what to include in your template for employment contract.
As you grow your trade business, you'll probably want to take on more people.
Whether full-time or part-time, it pays to put in writing the arrangements that you agree to.
This important paperwork is a small business employment contract.
Simple employment contracts don't need to be complicated. They set out all the key terms and conditions for the role and work.
It's all about people
Finding the right people for your trade business can take time. Having a small business employment contract ready to use can help you attract the best talent.
What's more, a solid small business employment contract that's clear and fair helps keep staff loyal.
How to hire employees for your growing business
How to hire employees Knowing how to hire good employees for a small business is crucial to maintaining the smooth running of your organisation and the excellent reputation you've worked so hard to build. 1. Write an attractive job description As well as writing about the role and the qualities
Why is a small business employment contract necessary?
An employment contract is a legal document that outlines the:
Rights
Responsibilities
Obligations of both you and the employee
A small business employment contract is a legally binding document. As a result, it reduces the risk to either side that can lead to confusion, and at worse legal action. Especially when it is down to something that is unclear and could easily be sorted out.
Think of your template for employment contract like the 'terms and conditions' document you might use with customers. Both seek to set everything out clearly from the start.
What does a small business employment contract include?
An employment contract example usually includes information about:
How to pay employees, including holiday pay and paid leave (PTO)
What to do if employees fall ill, including sickness entitlements, policies and processes
Rates of pay and rules about overtime and unsociable hours work
Potentially confidentiality clause too
As a business owner, the employment contract will help you to plan for your business practically and financially.
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Who needs to sign an employment contract?
Full-time, part-time and fixed-term, employees should sign an employment contract.
It's different for casual day labourers or independent contractors. They don't need to sign an employment contract with you.
But you'd be wise to arrange some form of agreement with any labourer or subcontractor while they work with you.
What needs to be included in a simple employment contract?
An employment contract example is made up of sets of terms.
The set of written terms, or the 'Written statement of employment particulars', covers basic information.
A small business employment contract is often made up of:
Specific terms that include the employee's pay and working hours as above
Statutory terms that are part of employment law
Implied terms that are too obvious to be written, such as a business closing on a public holiday
Incorporated terms that are put into the contract from other sources such as a staff handbook
Legally, simple employment contracts are a much broader document and incorporate more than just the written terms of their employment.
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Is there a standard small business employment contract template?
If you do an online search for a template for employment contract, you will find many free guides or templates on offer.
As this is an important legal document, we always advise consulting with an employment lawyer. You can also get guidance from the government or from specialist organisations such as ACAS.
As well as the terms outlined above, an employment contract example should include:
Names of the employee and employer
Start date and continuous employment
Job title or a brief description of the job
Pay
Place of work
Working hours
Holiday entitlement.
Other benefits
Absence and sick pay
Other paid leave
Pension arrangements
Training
Probationary period
Notice period
Collective agreements*
Grievances
Disciplinary rules and procedures
Signature and date from both parties
*A 'collective agreement' is a type of agreement you as an employer have with any employees' representatives (including trade unions) that allows terms and conditions such as pay or working hours to be negotiated on behalf of employees.
It isn’t essential, but we would always recommend consulting with an employment lawyer or HR consultant to ensure that your contract includes everything required and complies with current UK laws.
When employment contracts go wrong
Like many things in business, problems can crop up. Even if you have a small businesss employment contract in place.
The best advice is to try and resolve issues amicably and professionally without having to call in legal advice. In the unlikely event you do need help, the government offers advice on employment contract problems.
As we said at the start, a well-prepared template for employment contract should reduce the risk of problems or disputes.
Bring in work as you take on staff
The step to take before you recruit people is to have work ready for them to do. Filling up your order book can seem a bit daunting at first.
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They include:
Dedicated membership advice team
Work guarantee up to £1,000
Exclusive offers and discounts
Reduced cost of workwear and branding
Savings on other business essentials such as vans, fuel and materials
What do you need to become Checkatrade approved?
Becoming a Checkatrade member comes with a whole host of benefits, but the biggest has to be gaining our seal of approval. Homeowners tend to expect a commitment to quality when it comes to the Checkatrade tick, which can help you to win more business. Here are the checks you'll need to pass to join our directory.
FAQs
How to write an employment contract
An employment contract is made up of sets of terms. It is important to make sure that all necessary information is included.
You can find templates online, but we would always recommend seeking the advice of an employment contract specialist.
What should a contract of employment include?
When you're thinking about what should be included in a contract of employment UK, make sure all the main points are covered. These include working hours, rates of pay, leave entitlement, plus information about grievance and disciplinary procedures and notice period.
Why is a contract of employment important?
A template for employment contract includes a lot of important information for employees. As a business owner, it is important to get a written agreement from your employees.
This confirms that they understand everything related to their employment. It also covers you legally. It is also important for you as an employer to agree that you are aware of your duties and responsibilities to them.
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