Employment Contracts - What You Need to Know

We are often told by employers and employees alike that they do not have a written employment contract and that therefore no obligations are owed, but this is not quite right. If an employee is attending work and being paid then there is a contract, but it is just not written down.

For this reason, it is always safest to have written employment contracts in place as this means that you can choose the terms, as opposed to having standard clauses implied by law that you may not want. For example, in the absence of written terms to the contrary, the law will imply the minimum notice period. This means that employees that have been with you for at least a month may only be required to give you a week’s notice, which could leave you high and dry and is probably not enough time to rearrange appointments or find cover. The minimum notice that an employer is required to give to an employee is longer, but you may still wish to increase this.

Additionally you may wish to include other clauses to safeguard your business. The beauty industry is changing all the time, with new products and techniques on the market which can involve expensive training. You can protect yourself by having a Repayment of Training clause which will require the employee to repay some or all of their training costs if they leave within a certain length of time of the training. Without a written clause, it will probably be unlawful to deduct these costs from the final salary payment, meaning that the employee will be free to leave and make use of the qualifications somewhere else while you foot the bill.

Linked to this, you may want to include a clause restricting what the employee can do following employment. You are likely to want to protect your client base and to try to ensure that clients do not follow your employee elsewhere – clients will probably see a particular employee on a regular basis and this can leave salons particularly exposed to employees poaching their clients. You may also wish to have an express clause preventing the employee from seeing your clients outside of work. Having a written contract will allow you to have terms preventing employees from competing with you and approaching your clients or other employees if they leave to set up their own business.

Finally, if you’re still not convinced that having a written contract in place is the way to go, bear in mind that it is also the law! Employers are obliged to provide employees who are due to be employed for longer than one month with a written statement of their key terms of employment like the hours, place of work and holiday. Failure to do so will allow the employee to apply to the Employment Tribunal. And if you are unlucky enough that an employee wins an employment tribunal claim against you for something else, failing to provide a written statement can result in an uplift in their award of up to 2 to 4 weeks pay.

Gullands Employment team are experienced in advising on all aspects of employment law, from employment contracts and policies to disputes in employment tribunals.

Amanda Finn, a.finn@gullands.com

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