What is a contract?

Site updated on February 17, 2020

What is an employment contract?  Why is it important?

Every employee has a contract of employment – even if this is not in writing. Your contract is a legal arrangement between you and your Employer and neither party has the right to just change this without proper consultation.

A contract of employment does not have to be written, but it is very difficult to resolve disputes without evidence of what was agreed. You should ask for a written job offer and terms of your employment. You should also receive written confirmation of any changes to your employment terms, within a month of the change. This is a legal requirement.

If you are self employed you are not classed as an employee. It is important to note that a contract of employment is issued only to an employee.  If you are not self employed then you must work for someone and as such you are entitled to some rights!

If you work under a zero hours or casual arrangement, you are probably a “worker”  in employment terms and it is possible that you are not entitled to the same rights as employees.

Any person who works for someone else in return for pay, is in a contractual relationship, regardless of whether there are any written terms and agreements. In this respect, an employment contract is very much like any other sort of contract.

You can actually have a contract with an Employer before starting work. This means that if an Employer withdraws a job offer at the last minute, you may have a claim for breach of contract.

In order to have a contract there should normally be the following;

(a) an offer, usually the offer of a job on certain terms and conditions, ie. your offer letter, but remember that an offer does not have to be written.

(b) acceptance, i.e. agreement to accept the job on the terms offered;

(c) valuable consideration, i.e. some evidence of an intention to form a relationship. This could be the employer’s promise to pay you in return for your commitment to work. The confirmation of a start date from the Employer, or you resigning your current job, could be classed as consideration,

If you are leaving your job to join another employer, do not resign from your current job until you have written confirmation of a start date and all your employment terms in the new job. Check to see if the offer is subject to conditions such as a medical or references.

There is no legal requirement for a contract to be in writing, unless you are an apprentice – where the rules are different. The law does however require that you must be issued, within two months of starting work, with a written statement of the terms and conditions under which you are to be employed.  These terms and conditions  are often referred to as the employment contract. In fact this is not usually your contract as such, but it will contain many of the terms that are in your contract.

Apart from your statutory rights, employers are free to propose whatever arrangements they wish and you are free to accept or reject (or try to negotiate) the terms and conditions proposed.

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