How to Write an Employment Contract

A well-drafted employment contract protects both employer and employee. Here's how to write one that's legally compliant and fit for purpose.

Before You Start

Gather Information

• Role details and responsibilities
• Working hours and patterns
• Salary and benefits package
• Reporting structure
• Location requirements

Consider the Employment Type

• Permanent or fixed-term?
• Full-time or part-time?
• Any unusual arrangements (hybrid, remote)?

The Structure of an Employment Contract

Part 1: The Basics

Parties to the Contract

This contract is between:
Employer: [Company name and registered address]
Employee: [Full name and address]

Job Title and Description

• Clear job title
• Brief description of duties
• Reporting line
• Note that duties may change

Start Date and Continuous Employment

• Date employment starts
• Whether previous service counts

Part 2: Working Arrangements

Place of Work

• Primary location
• Whether they may be required to work elsewhere
• Hybrid/remote working arrangements

Working Hours

• Normal working hours
• Days of the week
• Whether hours may vary
• Overtime expectations

Part 3: Pay and Benefits

Salary

• Amount (annual or hourly)
• Payment frequency and method
• Deductions (tax, NI, pension)

Bonus (if applicable)

• Eligibility criteria
• Discretionary or contractual
• Payment timing

Benefits

• Pension
• Healthcare
• Company car
• Other benefits

Part 4: Leave

Annual Leave

• Number of days
• Include or exclude bank holidays
• How to book
• Carry-over rules

Sick Leave

• SSP entitlement
• Any enhanced sick pay
• Reporting requirements

Other Leave

• Maternity/paternity
• Parental leave
• Reference to policies

Part 5: Probationary Period

If using one:

• Length of probation
• Notice during probation
• Review process
• What happens at the end

Part 6: Notice Periods

During Probation

• Usually 1 week

After Probation

• Typically 1-3 months
• May increase with seniority/service

Part 7: Restrictive Covenants (if needed)

Non-Compete

• Preventing working for competitors
• Geographic and time limitations

Non-Solicitation

• Preventing poaching clients or staff
• Time limitations

Confidentiality

• Protecting business information
• During and after employment

Part 8: Policies and Procedures

Reference to:

• Disciplinary policy
• Grievance policy
• Other relevant policies
• Where policies can be found

Key Clauses Explained

Flexibility Clause

The Company reserves the right to make reasonable changes
to your duties. You may be required to perform other duties
as reasonably required by the business.

This allows minor changes without renegotiating the contract.

Garden Leave Clause

During your notice period, the Company may require you to
stay away from work while remaining an employee, continuing
to receive salary and benefits.

Useful for protecting the business when senior staff leave.

Intellectual Property Clause

Any inventions, designs, or works created by you during
your employment in connection with your duties shall belong
to the Company.

Ensures the company owns work created by employees.

Data Protection Clause

You agree to process personal data in accordance with the
Company's data protection policy and applicable law.

Required for GDPR compliance.

Common Mistakes to Avoid

1. Being Too Vague

• Specify actual hours, not just "full-time"
• State exact salary, not "competitive"
• Define what "benefits" means

2. Copying Without Customising

• Templates are a starting point
• Adapt to your business and the role
• Don't include irrelevant clauses

3. Inconsistency

• Make sure contract matches what you told them verbally
• Check it aligns with your policies
• Ensure benefits match your scheme rules

4. Missing Legal Requirements

• Include all day-one requirements
• Update for law changes
• Check restrictive covenants are reasonable

5. Making It Too Long

• Clear and concise is better
• Use appendices for detailed policies
• Avoid unnecessary legal jargon

Final Steps

Before Sending

1. Review for errors and typos
2. Check all details are correct
3. Ensure legal compliance
4. Consider getting it reviewed

Issuing the Contract

1. Provide before or on day one
2. Allow time for the employee to read it
3. Answer any questions
4. Get both parties to sign and date
5. Keep a signed copy on file

After Signing

1. Set up payroll
2. Enrol in pension (if eligible)
3. Set up benefits
4. File the contract securely