A contract of employment is formed where there is an offer of work, consideration with an exchange of 'value' and an acceptance by both parties. A contract need not be written to be legally binding.

Legal obligations

The Employment Rights Act 1996 states that all new employees whose employment is for one month or more, must be provided with a written statement setting out the main particulars of employment within two months of the employment starting. There is no legal requirement to provide a written contract. Best practice demonstrates that it is wise to issue particulars prior to the employee commencing their term of employment.

Employers must comply with equal opportunities obligations in making the offer of employment. For example, The Equal Pay Act 1970 provides the right for men and women to receive equal treatment as regards pay and other contractual terms of employment when they are employed for similar work.

Written statement of employment particulars

The particulars of the written statement should include:

  • Name of the employer
  • Name of the employee
  • Place of work
  • Date employment began and date continuous employment began
  • Job title or brief job description
  • Expected hours of work (making reference to any opt-out clause in consideration of the Working Time Directive regulations)
  • Remuneration details and intervals at which remuneration is paid together with method of payment
  • Holidays and public holiday entitlements
  • Benefits including any pensions provision
  • Details of probationary period if applicable
  • Details of disciplinary and grievance procedures (this is a statutory obligation if the company employs more than 20 people – this qualification may be removed and extended to businesses of all sizes if the new Draft Code of Disciplinary and Grievance Procedures are accepted as legislation in October 2004)
  • Sickness procedures and sick pay details
  • Notice periods
  • Collective agreements relevant to the contract (usually only applicable for larger businesses)

Conditions of employment

References: it is a good idea to make a contract subject to satisfactory references. Best practice dictates that references should be sought prior to an offer of employment being made but this is often impractical. Many employers therefore take them up once the offer is in place. Verification of qualifications can also form part of the reference procedure.

Medical examinations:

some roles may require a certain level of health in order to perform the necessary functions of the job on offer. An employee is not obligated to undertake a medical examination. However, it would be within the employer's rights to withdraw a job offer if a refusal is made.

The Access to Medical Reports Act 1988, places a responsibility on employers to obtain written permission from the employee prior to obtaining a medical report. However, an employee is within their rights to refuse permission. The employee can also ask for the report to be amended or objections attached.

Eligibility to work: section 8 of the Asylum and Immigration Act 1996 makes it a criminal offence for an employer to employ an illegal immigrant. Therefore, a condition of employment should be immigration clearance and verifying work permit status. Employers who fail to comply with these regulations and 'knowingly or recklessly' employ someone who has not been granted leave to enter or remain in the UK or who does not have permission to work in the UK may be faced with upto £5000 in fines.

Employers can check the following documents to ensure they comply with this regulation:

  • A document issued by a previous employer, the Inland Revenue or other government agency – a P45 for example
  • A passport showing right of abode
  • A certificate of naturalisation as a British citizen
  • A birth certificate
  • A work permit (if applicable)

Employers should not discriminate against applicants. Employers who only ask foreign looking or foreign sounding applicants to provide proof of their work eligibility will be in breach of Race Relations legislation. All potential employees, regardless of colour or race should have their documents verified.

  • Comply with the Employment Rights Act 1996 and equal opportunities regulations
  • Set out the particulars of the employment, in written format, within two months of an employee starting
  • Check that references are satisfactory
  • Undertake medical examinations (if required)
  • Obtain evidence of the employee's right to work in the UK