Don’t be entangled by Terms of Employment

As an employer, can you be sure that your employees understand their conditions of employment, rights, duties and responsibilities? As many employers have found to their inconvenience – and sometimes financial cost – it is often only when something goes wrong in the employment relationship that misunderstandings about these fundamental matters become evident, with the potential to create conflict.

A clear, up-to-date written statement of terms of employment can help to minimise such misunderstandings. In addition to bringing benefits to the employment relationship, the written statement is a statutory right for anyone employed for a month or more, and should be provided to such employees within two months of the start of employment. The essential elements of the written statement are set out in the Employment Rights Act 1996 as amended by the Employment Act 2002. Certain items must be included in the statement, and minimum legal standards must be met, for example in complying with the National Minimum Wage and the right to paid holidays. It may additionally contain other clauses that an employer wishes to rely on (depending on the nature and needs of the business).

These might include:

  • Probationary periods,
  • Confidentiality,
  • Garden leave clauses or
  • Any other reasonable business-specific requirement.

The written statement contains the main conditions of employment, but there are likely to be other documents and agreements which also form part of the overall employment contract. These might include:

  • Verbal agreements,
  • Items in an employee handbook,
  • Notices on the staff notice board,
  • The offer letter and
  • Collective agreements.

There is no legal requirement for employees to sign their written statement, but a signed document demonstrates that the employee received a copy and makes it easier for the employer to rely on. In the absence of a signature, it is advisable for employers to show they brought the statement to the employee’s attention, and invited them to discuss any concerns. It is essential to follow the law, and it is also good practice to ensure that both employers and employees understand the basis on which employment has been agreed. Having a well drafted Statement of Main Terms of Employment should enable this to happen.

If you have any queries about terms of employment, please contact Fiona McArthur in our HR Team, on 0131 558 5800 or email