Employment contracts types in the UK

As an employer, you have several responsibilities towards your employees. These depend on the type of employment contract given to them, which defines their employment status. Below are the different types of employment contracts in the UK:

Full-time and part-time permanent employment contracts

These are probably the most common type of contract in the UK. The contract should set out working hours, holiday entitlements and other aspects of the employee’s work arrangements. Remuneration can be based on an hourly rate or can be salaried.

Fixed term employment contracts

A fixed-term employment contract is normally used when hiring temporary employees, who should still be treated in the same way as permanent employees.  This type of contract contains much of the same information as a permanent contract, with the duration of employment lasting anywhere from a few weeks to two years.

The complexity of the contract can depend on the duration. However, fixed-term contracts will normally end automatically when the agreed end date occurs. The employer doesn’t have to give any notice.

Workers have the right:

  • Not to be unfairly dismissed after two years’ service. For employees who were in employment before 6th April 2012, it is one years’ service.
  • To a written statement of reasons for not renewing the contract – after one years’ service.

They may be entitled to statutory redundancy payments after 2 years’ service if the reason for non-renewal is redundancy.

Zero hours contracts

Zero hours contracts have become quite controversial in recent years. However, the zero hour contract can still be an effective tool for some employers. It allows an employer to call upon an employee, without a guarantee that there will be work provided. This type of contract requires a lot of consideration, it is important that arrangements with employees are made. They should not be confused with casual working agreements.

Temporary agency staff

You can hire temporary staff through agencies. In this scenario, the employer pays the agency. It is then the agency’s responsibility to ensure that workers get their rights under working time regulations.

Freelancer or consultancy agreements

This document can be a simple letter or a complex contract, which is used when the employer engages the services of an individual that will not be employed. Without an agreement, HMRC could argue that the individual is actually an employee.

Other contracts

Special arrangements are in place for firms who wish to employ family, young people and volunteers.

Ensure that you avoid any special treatment when employing family members. Also, ensure that your liability insurance covers younger family members if you wish to employ them.

A risk assessment must be carried out before you take on a young person of 13-17. There are also limitations to the types of jobs that they can do and how long they can work for.

Volunteers require a volunteer agreement, instructions and training on how to perform the tasks that they volunteering for. The health and safety of volunteers is also the employer’s responsibility.

For extra support when drafting an employment contract for your staff? Get in touch and see how we can help.

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