Myth busting: Employees must sign their contracts of employment for terms to apply

They may also be subject to other terms and agreements that have been collectively agreed with a union or representative body

Busted: The relationship between employer and employee is primarily a contractual one governed by the terms and conditions agreed between them and usually contained in an offer letter or written contract of employment.

These are known as express terms. In addition, employees have a large number of rights and restrictions from legislation, as well as terms that are implied into their contracts, which are known as implied terms.

They may also be subject to other terms and agreements that have been collectively agreed with a union or representative body.

The employment contract does not have to be in writing. However, employees (rather than workers) are entitled to a written statement of their main employment terms within two months of starting work unless their employment is for a month or less. This statement is sometimes referred to as a Section 1 Statement.

It goes without saying that the best evidence of a binding agreement is a written contract signed by both parties. But, even if an employee has not signed the contract, the terms may be accepted if the parties have otherwise acted consistently with the contract – unless, of course, the employee has made it clear that he or she objects to a particular clause.

To avoid potential arguments about the enforceability of a particular clause or term in a contract of employment we recommend:

  • You send out contracts of employment to new members of staff as soon as they have accepted an unconditional job offer and ask them to return these to you duly signed before their first day of work.
  • If the new starter does not return the contract by the time they start work, they should be reminded of the need to return it and you should chase them again if they do not return it within say a week.
  • If the contract is still not signed, ask the employee if they have any comments or object to any of the clauses and make a note of what they say. If they do have objections, you will need to address these, but an employer does not have to make any changes.
  • Do not sign off the employee’s probationary period until the contract is signed and returned to you.

If you change the terms and conditions of any existing member of staff, you should also make sure that these are set out in a new contract (or in a letter) and have been signed, particularly if the contract includes new restrictive covenants.

Restrictive covenants should reflect the employee’s new role and will only be enforced if they are reasonable and the employee has consented to them.

If you don’t have a signature on the contract, it will be much more difficult to assert that the employee consented to post-termination restrictions even if he/she continues to work for you.

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