MAKE YOUR FREE Employment contract

Use an employment contract to hire an employee on a fixed-term or permanent basis, if they are located in England, Wales or Scotland.

This document is GDPR compliant.

An employment contract is an agreement between an employer and employee setting out the employee's rights, responsibilities and duties. It forms the legal relationship between the employer and the employee.

Use this employment contract template:

• when you make a job offer and want to employ someone new 

• when you sign a new contract with an existing employee

• to provide the written employment information required by law

• when you want to use a straightforward employment contract that clarifies the basic agreed employment terms and conditions

• for employees based in England, Wales or Scotland

• if you want to create a permanent or fixed-term contract

Find out more about hiring employees. Note that if you want to hire a senior employee or a director/executive, you should use a Senior employment contract.

This contract of employment  template covers:

• agreed hours and days of work
• terms and conditions relating to holidays
• terms and conditions dealing with sickness and injury of employees
• the duties of the role
• pay and benefits (whether full or part-time)
• place of work
• disciplinary and grievance procedures
• arrangements for ending employment
• information required by law about trade unions and pensions

Employers are legally required to give employees a written statement of particulars on the first day of their employment. This employment contract complies with the requirement for a written statement and can be adapted for full-time or part-time permanent employees and for fixed-term employees. Employment contracts must be compliant with the Employment Rights Act 1996, the Employment Act 2002 and the Equality Act 2010.

If you're likely to move premises in the future or operate from more than one site, express terms specifying this should be included in the employment contract. Doing this will help you have the right to move the employee to a new place of work. Without this right, it will be up to the employee whether to agree to the move. To make the right to move employees more reasonable and acceptable, it is usual to put some geographical limit on the area within which the place of work can be moved.

When there is both an Offer letter and a separate employment contract, it's important to say which document takes priority if there is any difference. This employment contract takes priority over the job offer letter.

Using a separate Job description works best if you want to give a detailed description of the job and can help bring clarity, particularly for mid-level to senior employees. However, you should only reference a separate job description if it will genuinely be created in practice. Otherwise, it's better to put a brief explanation in the employment contract.

For new hires, it is helpful to have a probationary period (usually 3 months) during which the employee can be assessed. It is unusual to use a probationary period when an existing employee enters into a new employment contract. You can decide how long you want the probation period to be.

The option to extend the probationary period is helpful when employees have not achieved set targets or have performed poorly during the initial period or have been absent. Probationary periods will not stop the employee from gaining unfair dismissal rights when they reach the qualifying service.

This employment contract allows you to specify regular or irregular hours of work - for example, 9 am - 5 pm Monday - Friday or a certain number of hours per week, at times to be agreed.

Check that the employee is not working more than 48 hours a week, averaging over 17 weeks. This is the legal maximum and includes work for other employers. If an employee works at or close to the maximum, ask them if they are willing to opt-out from the 48-hour limit. If not, you must take reasonable steps to ensure that working time stays under the limit. 

Employees also cannot work for more than 13 hours a day and must either have 24 hours of continuous rest a week or 48 hours a fortnight. For more information, read Pay and benefits.

Employees are legally entitled to at least 5.6 weeks' paid holiday a year. For an employee working five days a week, this is 28 days inclusive or exclusive of bank and public holidays. Part-time employees are entitled to a pro-rata entitlement (eg an employee working three days per week would be entitled to 16.8 days' holiday). Employers can agree to a greater holiday allowance.

All employers are required by law to provide a workplace pension for certain employees. This requirement is known as automatic enrolment (or the auto-enrolment duty) and it applies to all staff who:

• are aged between 22 and the State Pension age

• earn at least £10,000 per yeat

• work in the UK

Employers must:

• pay at least 3% of an employee’s salary before tax into a workplace pension
• deduct contributions of at least 5% from eligible employees

Fixed-term contracts (ie contracts that end on a specified date rather than continuing indefinitely) can be useful where it is known from the start that the employment will end after a defined period. Fixed-term employees are protected by law from being treated less favourably than permanent employees and, if they have sufficient length of service, from unfair dismissal. Fixed-term contracts that are renewed or replaced after four years' qualifying service are automatically converted into a contract of indefinite duration.

The minimum notice period for employees who have continuously worked for you for between two months and two years is one week. It is common to say that one week's notice will apply during the probationary period. Until two months of service, it is lawful to provide for termination without notice but this is unusual.

This document gives you the right to transfer employee data out of the UK and EEA. However, the employer can only transfer personal data outside of the UK or EEA if there are appropriate safeguards in place (eg the organisation receiving the data is certified under an approved certification mechanism). Such safeguards should be set out in the employer's Data protection policy. For further information, read International transfers of personal data. 

Ask a lawyer for:

• employees who will work overseas for more than one month in total
• employees involved in creating intellectual property central to your business
• employment contracts with very senior employees or company directors
• employees based outside England, Wales or Scotland

This employment contract is governed by the law of England and Wales or the law of Scotland.