Contract of Employment

Contract of Employment and Section 1 Statement

What is the difference between a Contract of Employment and Section 1 Statement?

There is no legal obligation on an employer to give an employee a written contract of employment unless the employee is an apprentice. An apprenticeship is a distinct and protected status in law. There is however a legal obligation to give all employees a section 1 statement on or before the first day of employment. Regardless of how long you are expecting the employee to work for you.

What Is A Contract of Employment?

The contract of employment is created when you make an offer of employment and the offer is accepted, the contract does not need to in writing.

A contract of employment is like any other contract between two parties; once agreed, the contract can only be changed if both parties agree to the change. Otherwise, the party changing the contract will be in breach of contract.

A contract of employment will usually have a combination of ‘express’ and ‘implied’ terms.

• An express term is something you have agreed with your employee, for example, an hourly rate of pay. Some may be agreed verbally and others may be agreed and then confirmed in writing.
• An implied term is something you and your employee have not discussed or agreed or even thought about but is implied by law to exist as a term in the employment contract. For example, in every employment contract there is an implied term which is called ‘mutual trust and confidence’. This just means that it is implied in the employment contract that the employer and employee will behave fairly towards each other.

If an employer is in breach of an employment contract the employee could claim compensation, or, assuming they qualify to claim unfair dismissal, resign and claim ‘constructive’ dismissal.

What’s the difference between an employment contract and a section 1 statement?

The essential difference between an employment contract and a section 1 statement is that an employment contract is formed, even though it may not be in writing, the minute the employee agreed to work for the employer.

The section 1 statement has to be given to the employee on or before their first day of employment, and is merely evidence that the contract exists.

What should the section 1 statement cover?

What has to go in a section 1 statement is laid down by law, that is to say, by s.1 of the Employment Rights Act 1996. The details were amended in April 2020: see Section 1 Statement Of Terms And Conditions Of Employmentfor more information about the new rules.

Uncertainty Over Terms and Conditions Of Employment

When there is uncertainty in the terms and conditions of employment, as a general rule, an employment tribunal or a court will give judgement in favour of the employee, on the basis that the onus should be on the employer to make sure that the employee’s terms and conditions of employment are clear and unambiguous.

Because a court or an employment tribunal will probably find in favour of an employee if there is a dispute as to an unclear term in the employment contract it follows that an employer should make sure that the employment contract is as clearly worded as possible and gives as much flexibility for change as possible.

My Recommendations

As a general rule, when writing a contract of employment I only include what is strictly necessary from a law and business / industry point of view. Legally, the minimum information should satisfy the requirements of the section one statement. Everything else should go in another document which is deemed to be non-contractual such as an employee handbook.

Do You Need HR Support?

Get the Latest Legislation News and My Top Tips delivered straight to your inbox

Have a question? Let's have a chat and a coffee!

If you found this helpful and you would like to learn more about how I work with owners of small business who want to improve their HR management, please book some time in my diary.

Tap into and share the Kea world!

Don't forget to add Kea to your social networks and when you read an article that you like share it with your network!