It might surprise you to know there’s no legal definition of an ‘employment contract’ – the name of the document has no bearing on its status, it’s what’s in the document that counts!
There are several different ways to engage employees, so naturally there are a different types of employment contract.
Other descriptions for employment contracts
Statement of terms and conditions of employment or written particulars
This is usually a basic document covering the minimum legal requirements.
Contract of employment/employment contract
Most commonly issued to employees and is usually more comprehensive than a basic statement of terms.
This is just another name for an employment contract. Often a service agreement will be issued to senior employees and will be more comprehensive than basic employment contracts.
For example, it may contain duties applicable to directors who are also employees.
Common types of employment contract
There are several different ways to engage employees, so naturally there are a different types of employment contract. Some of the most common types of employment contracts are set out below.
Permanent Employment Contracts
This is the most common type of employment contract. A permanent contract of employment is one that doesn’t have any kind of fixed length. If you have full-time or part-time members of staff, whether they are salaried or hourly paid, they would usually be engaged on a permanent contract.
This type of employment contract can be used when you are engaging an employee for a fixed duration. A fixed-term contract might be beneficial where you need to engage an employee for a limited period only, for example because you only need them to work on or complete a specific task or project, or because you need them to cover a period of absence for another employee (e.g. maternity leave).
In reality, the only differentiator between a contract of employment for a permanent employee and a fixed-term employee is the agreement that the contract will end on a certain date (or on completion of a specific task / project).
Fixed-Term contracts usually contain an express term that sets out the specific date that it is envisaged that the contract will come to an end, so that both the employee and the employee have certainty over the length of the employment period.
Once that contract comes to an end, you can part ways or agree a new contract with them.
Casual / Zero-hours Contracts
This type of employment contract is often used where the work available to the employee will differ day to day, week to week, or month to month. An employer that finds themselves with a need for ad-hoc resource will often offer either a casual or a zero-hours contract.
Ordinarily, a casual employment contract will provide for an employee to have a small amount of guaranteed hours per week; but with the flexibility for those hours to increase week to week depending on the level of resource that the employer required.
In contrast a zero-hours employment contract will not guarantee an employee any hours per week, but rather will provide that an employer will notify the employee of the hours they need the employee to work (usually on a week by week basis) and the employee must make themselves available for those hours.
It’s usual for casual or zero-hours employees to be paid on an hourly basis.
I need an employment contract
Whilst there are plenty of free employment contracts available to download from the internet, we’ve seen what can go wrong when a poorly drafted contract has been issued.
We recommend seeking advice from an employment lawyer or independent HR consultant who can offer you more tailored advice and support with the drafting of a specific contract.
If you’d like some help with creating employment contracts and ensuring they comply with current UK employment law, our integrated team of CIPD qualified HR advisors & employment lawyers can help.
As part of our employment & HR service, a contracts and policy review is included and you can use our unlimited advice line to ask HR advisors and UK employment lawyers questions about your employment contracts whenever you need. We’ll even help up-skill your managers’ knowledge to help them manage workplace compliance and managing your people with confidence.
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