Top 5 reasons you need to issue contracts of employment
Contracts of employment are the cornerstone upon which the relationship between employers and their employees are built. All employees, whether full-time, part-time, or fixed-term workers should receive a contract of employment. Below are five reasons why employers should have signed contracts of employment.
- A Legal Requirement: within the first 2 months of an employee starting employment an employer must issue them with a written terms and conditions, most commonly done through the contract of employment. Under the Terms of Employment Act, there is certain specific information that should form part of the written terms and conditions.
- Cost of Non-Compliance: if an employer is found not to have issued contracts of employment or is found to have issued contracts that are not fully compliant they could face costly fines of up to 4 weeks’ pay for each employee.
- Employer Protection: In addition to compulsory statutory clauses, employers can include extra terms in the contract which will offer them further protection
e.g. A Confidentiality Clause: prevents employees from publicly disclosing confidential company information. Increased notice of termination: employers commonly set the notice employers are required to give should they wish to leave. Helping the employer ensure they have time to arrange alternative cover. Restrictive Covenant Clauses: place restrictions on ex-employers from setting up competing for business or in some cases, from working with competitors for a specific period of time.
- Reduces Confusion & Helps avoid Costly Tribunal Cases: In the absence of written terms, implied terms and conditions can exist, therefore employers can rely upon custom and practice. Where custom and practice exists problems can occur when the employer and the employee disagree with regards to what the terms are. In the case of New Cityview Press Ltd. -v- Breslin, there was a dispute regarding bonus payments. As no written policies existed outlining bonus payments, the judge stated that in order to establish a “fair, reasonable, just approach” he had to find in favour of the employees.
- Signed Contracts are Best: The employer should keep a copy of the contract, signed by both parties on file. A signed contract acts as proof that the employee has received their terms and conditions. In the case of Kerry Foods -v- Donnegan, the employer argued that contracts of employment existed. However, as there was no evidence that the employee had received the contract the judge found in favour of the employee.
Contracts of employment are very important legal documents, in order to ensure comprehensive protection, it is always advisable that employers seek external assistance. External assistance does not have to mean costly legal fees. Bright Contracts provides fully inclusive, professionally drafted documentation for just €149 + VAT.
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