What to look out for in contracts of employment

2015-01-06 Jennifer Renney posted:

The start of a new year comes at a time when many businesses are looking to employ new staff. Businesses may decide to employ Christmas temps on a permanent basis whilst other firms are looking to expand as a result of their performance from the previous year.

When a job offer is made, it is worth looking at the key terms as neither employers nor employees will want to jeopardise anything by failing to read the small print.

Some employees will want to negotiate the best contract possible and may enter negotiations with their employers. This may occur when certain contractual terms benefit one party but disadvantage the other. Here are some of the common contractual areas where employees and employers should be mindful.

Bonuses

Employers usually make bonuses discretionary and often contracts state that employees will only be eligible if they are in employment on the bonus payment date. If a bonus is calculated by reference to formulas such as sales, it might be worthwhile having a pro-rated bonus for part of the year worked.

Probationary and notice period

A probationary period enables both parties to terminate a contract of employment if the employment relationship is not working out. This can vary from a couple of weeks for junior employees to 6-12 months for senior employees. Additionally, termination notice periods may extend the statutory minimum to a period typically between 1 and 3 months. Longer notice periods tend to favour employees but can also operate in favour of employers as they can keep employees away from a competitor.

Restrictions

Typically, a restriction may prohibit employees from working in a competing business both during their employment and also after their employment has terminated. These are often referred to as restrictive covenants and need to be carefully drafted, with consideration given to the length and breadth of the restriction if it is to be effective. Here are some examples: preventing an ex-employee from poaching clients and customers; from working for a competitor or within a specified geographical area; from using company property and customer lists or other confidential information. The general rule is that such clauses are only enforceable if they go no further than necessary to protect the legitimate interests of the business, and are a reasonable restraint of trade. They are an important tool to help employers protect their business, and employees need to consider them carefully when agreeing to them.

Social media

There have been a number of high-profile cases recently involving staff misusing facebook and other social media to the detriment of their employer, or even as a form of bullying and harassing a work colleague, which employers can be liable for. It is advisable to consider what the staff handbook rules say about the use of social media, which needs to be controlled, to avoid any misunderstandings.

These are just a few examples of some of the things you will want to consider when taking on an employee or entering into a new job. For further information on contracts of employment and staff handbooks, contact Renney and Co Employment Solicitors for a no obligation chat on 01225 632240 or at info@renneyandco.com.

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