When putting contracts in place for employees, it is always wise to take a step back and consider if that contract is clear and easy to understand.
If your contracts are not clear, you run the serious risk of doing damage to your business in more ways than one. This includes financial damage as well as a hit to your company’s reputation.
The risks are too great, so it’s crucial that you are checking your employees’ contracts to ensure they align with your policies and are easy for all employees to understand.
What could happen if my contracts are not clear?
If your contracts are ambiguous in any way, you run the risk of facing costly and time-consuming legal disputes and tribunals or being unable to rely on the protections included for the business.
Employees may challenge what is written within their contracts and if any changes are made without the employee’s prior agreement, that can also lead to unwanted legal cases.
To avoid any legal battles arising, you can take proactive steps to ensure your contracts are clear and state exactly what employees get and what their obligations are and this is where working with an employment expert helps.
Communication is key. If changes to contracts cannot be agreed, the process to push through these changes can be lengthy. You should be cautious about making unilateral changes and should not do this without obtaining advice due to the risk of constructive dismissal claims as a result.
It is anticipated that new rules on fire and rehire contained in the Employment Rights Bill will come into force in October 2026. If you wish to make changes to employee contracts, they should be made well in advance of this change. If the changes are of benefit to the employer, for example, adding post-termination restrictions or amending these, it is important that the employee also receives some benefit at this stage, e.g. a pay rise, to help ensure the restrictions can be enforced. Any changes you make to employee contracts should be following consultation, so employees know what has changed and if you have included or removed certain benefits from their contracts.
This communication helps employees understand exactly what they are getting and gives you peace of mind and the ability to answer any employee questions and concerns.
What benefits are optional to include in contracts?
Alongside the legally required benefits such as statutory sick pay, statutory holiday leave and pension plans, there are additional benefits you can choose to include in your employees’ contracts.
These are called discretionary benefits and include things such as private medical insurance, company cars, a cycle to work scheme and any additional perks like shopping vouchers or discounts for company products and services.
All benefits should be outlined clearly in your employees’ contracts, so they understand exactly what they are getting. The benefits should be concise and suit all the needs of your employees, including those with health and learning conditions.
In addition to this, to avoid any disputes, you should also be specifying any limitations, such as how many times a benefit you include can be used or if it’s limited to a certain number of people.
Providing this clarity means employees understand how the benefits work and will not take advantage of the benefits you have put in place.
How employment law experts can help
You should be regularly reviewing your contracts to ensure the language used is clear and concise and we can help with that. Contracts should be reviewed and if necessary updated regularly to ensure that you have the best protections in place for the business.
Our team can help you review existing contracts, advise on your legal obligations and help you clarify how all benefits, whether statutory or discretionary, should be outlined.
In addition to this, you should also be checking your benefits policies because there should be a clear link with the language used in both your contracts and policies, so both you and your employees understand how they will work.
For all concerns around employee contracts, contact our team.