Of all the mistakes we have seen over the years when helping SMEs prevent people problems, one of the most persistent is the copy and paste employment contract.
You can see how it happens. Someone starts up a business, the to-do list is endless. Whether they begin hiring immediately or a while in, they think a harmless shortcut is to use the one from their previous job or Google “employment contract” and then simply copy and paste the first result that comes up.
*HR adviser starts tearing hair out!*
But why? What can possibly go wrong?
Dangers of copy/paste employment contracts
As you know, signed contracts are legally binding, so what are you and your employees signing?
Big issues for you may be erroneous holiday allowances– say offering 35 days instead of 28, or enhanced sick pay or maternity/paternity pay at a rate you cannot afford. Once it is signed you are stuck with it.
Equally, it may be something that is missing rather than there in error: A client confidentiality clause, notice periods or a relocation clause for instance. Relying on older contract wording will also mean that you do not include changes brought in by the latest legislation or case law.
If you really don’t check what you are copy/pasting, it could be complete nonsense with the original company’s name still inserted. It creates a poor impression, and maybe even poor publicity in this era of sites like Glassdoor.com.
Sometimes you may get away with it for a good run, but you may experience a real sting in the tail when a landmark event occurs in your business. For instance, a poorly worded employment contract might restrict your options if you need to make significant changes.
Another example is if you come to sell the business and TUPE is involved. Copy/paste contracts will almost certainly be uncovered if your buyer does their due diligence. You could be left with a deal falling through, or expensive remedial action to get everything in order before you can get a green light.
What should you include in an employment contract?
A written statement of particulars needs to be given to all employees on or before their first day of starting work. The basics to include are:
- Business legal name
- Start date and date of continuous employment
- Job title and reporting line
- Place of work
- Conditions of pay, how paid and when
- Sick pay and how to report absence
- Hours of work
- Holiday entitlement
- Notice period
- Pension and collective agreements
- Grievances and disciplinary matters
However, a good employment contract will be bespoke to you, reflecting your business’s culture and operations. This means that you would probably choose to have more than the above, perhaps including things like a social media and privacy policy, and how you handle employee family commitments, for example.
Employment contract help from The HR Dept
Employment contracts and company handbooks are two of our core services at The HR Dept. We take the time to understand your business so that your employment contracts become a help not a hindrance to running your company. To find out more about how we can help, please get in touch.
