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New Year, New Contracts – 8 Reasons to Update Your Contracts of Employment

Returning to work after Christmas can mean a lull before all your clients and customers get in contact again. As it is good practice to review your employment contracts on a yearly basis, this is a good time to ensure they are up-to-date and reflect the actual work your employees are carrying out.

We often come across employment contracts that do not fully protect our clients’ businesses. Below is a selection of the most common gaps or errors.

8 reasons why you should update your contracts of employment

  1. Provide a six month probationary period, rather than just three months. This enables you to properly review your employee’s performance. After three months, if there have been any issues, there is time to set up three monthly performance reviews, with set targets for improvement.
  2. Set a shorter notice period for your employee’s probationary period. If things don’t work out at the beginning of the relationship, this limits the cost to your business if you decide to pay them in lieu of notice.
  3. Define working days and hours, including whether lunch is paid or unpaid. This avoids confusion and ensures your employee’s hours meet your business needs.
  4. Include a mobility clause. This is important if you are likely to relocate. Note, this can only cover a reasonable geographical area.
  5. Include a garden leave clause. This is important in situations where you require an employee to stay at home during their notice period, rather than paying them in lieu of notice.
  6. Provide the right to recover contractual sick pay. This ensures repayment of contractual sick pay where there has been third-party negligence. For instance, if your employee has been injured in a car crash.
  7. Set clear bonus rules in your employment contracts. If providing the right to a bonus, define this so it only applies if your employee is still employed on a set date, and not during their notice period. This will limit your company’s financial commitment to a leaving employee.
  8. Outline any relevant post-termination restrictions. This can prevent departing employees from soliciting or dealing with your clients or customers for six months to a year so that your legitimate business interests are protected.

Throughout January we are offering 10% off our junior and senior contracts and a free 30 minute telephone advice sessions on Tuesdays and Thursdays between 4-6pm. For more information please contact our team of employment lawyers on 01273609911, or email info@ms-solicitors.co.uk.

About the author

Fiona Martin

fiona-martin

I lead the employment teams in our solicitors’ offices in Brighton, Eastbourne, Shoreham, Gatwick & Crawley and Croydon. As founding Director, I am also responsible for the firm’s marketing. I provide expert opinion for the press, disseminate employment law round-ups through my employment law blog and campaign on important issues such as maternity and disability discrimination. I train employers and HR professionals to be best practice managers and I am also a CEDR accredited mediator.

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