An employment contract is an agreement between an employer and an employee, which sets out their employment rights, responsibilities and duties.
You are breaking the law if you do not issue your staff with a written statement of Terms and Conditions of employment. You should also make sure that your contracts allow for lay off and shorttime working if you think you will need to apply either at some point.
To make life easier for you and to ensure that you comply with the law, the FMB has two types of contract on its website, which are FREE for you to download and use.
The contract entitled ‘FMB Employment Contract’ can be used if you are applying general UK employment law. This should be issued with the accompanying Disciplinary and Grievance Procedure.
Another contract has been designed for members who are applying the BATJIC Working Rule Agreement in their contracts of employment and is entitled ‘BATJIC Compliant Employment Contract’.
When using the BATJIC Compliant Employment Contract, members should ensure that they have attached the BATJIC Working Rule Agreement.
If you have any questions regarding the use of these contracts, please call FMB Information Services on 020 7092 3891.
WHAT TO DO WHEN YOU DON'T HAVE ENOUGH WORK FOR YOUR EMPLOYEES
Using employment contracts becomes an important issue if you want to change the terms and conditions of employment, particularly if your workload is reducing and you want to avoid laying staff off or making them redundant. It reduces the burden of dealing with difficult issues as it outlines rights and duties on both sides.
If you decide to make changes to your employees’ contracts because of economic circumstances, move to a new location, or because of new laws or regulations, then make sure you agree those changes with your employees.
Changes should normally be made after negotiation and agreement between you and your employees.
Here are some examples of things that might change:
Rates of pay
Working time (for example, longer or shorter hours, different days)
Employee’s duties and responsibilities
Duties and responsibilities of employee’s immediate boss
Location of work.
In addition, it is always advisable to include ‘flexibility clauses’ in the employment contract to accommodate any future changes. These clauses could be ‘vaguely’ worded but must be reasonable as they cannot be used to bring in completely unreasonable changes. For example, you could add the phrase: ‘The employer reserves the right to change terms from time to time’.
TIPS ON LAY OFF AND REDUNDANCY
The FMB offers a dedicated helpline for members needing more information about lay offs and redundancy via FMB Information Services and the FMB legal protection insurance provider, DAS.
When making a claim against layoff and redundancy using DAS, the claims team will work with members to follow the correct procedure. Failure to contact DAS and follow their advice will result in members being disqualified from the DAS cover on layoff and redundancy.
The FMB Information sheets:
- Employers’ guide to redundancy payments
- Redundancy: consultation & notification and
- Lay off and redundancy, are a good source of information as they cover many common queries and are available to download here.
Redundancy pay is based on:
- Age of employee
- Number of years of continuous service
- Legal contractual weekly pay up to a maximum amount: this is £430 per week as of 1 February 2011. If your employees receive a weekly wage above this maximum figure, you should still use the contractual weekly maximum to calculate their redundancy payment.
If you have a serious cash-flow problem and your business would be put at risk by making a redundancy payment, your employee can be paid directly from the National Insurance Fund. If you become insolvent and unable to pay your employee, then you can request Form RP1 from the Insolvency Service at www.insolvency.gov.uk your employee will be paid from the Fund and the money will be claimed back from the assets of the business. Otherwise, contact the BERR Redundancy Payments Offices Helpline, Tel: 0845 145 0004 and ask them to send you the Financial Disabilities (FD) letter and list, to apply for a loan to pay for redundancies. Members will be required to provide evidence of their circumstances and will have to repay the amount owed to the Fund as soon as possible.