Preparing Contracts for New Starters: What Employers Need to Know
When a new starter joins a business, there is a lot to prepare and organise. However, one of the common pitfalls that employers make is failing to prepare and issue their contract.
The contract itself is a vital document, as it underpins the employment relationship. The contract sets out the terms on which the new starter is engaged, and includes your rights and obligations as an employer. It also helps to mitigate against any disputes over the terms of employment should any issues arise later.
Under current employment law legislation, new starters are also entitled to certain key terms of their employment on or before the first day of their employment. This includes casual and zero-hour workers. These key terms are known as a Section 1 Statement.
What does a Section 1 Statement include?
- Details of the employee’s pay, including the rate at which any salary accrues;
- any terms and conditions relating to their hours and days of work, including details relating to if and how working days may be varied and how the variation will be determined;
- terms relating to any other paid leave, such as family friendly leave, including details of any enhanced pay and leave;
- terms relating to any other benefits provided (and not just limited to sickness, pension and holiday benefits as present) including company health insurance, company car for personal use and vouchers;
- any probationary period, including conditions and its duration;
- where the new starter is to work abroad for more than one month, the terms relating to working abroad including the period of work outside the UK, the currency of remuneration while abroad and any additional remuneration and benefits and any terms relating to their return; and
- any mandatory training that the new starter must complete and any training that they are entitled to undertake.
What happens if I don’t provide a Section 1 Statement?
Once you have provided a new starter with a Section 1 Statement, you will then have two months from their start date to provide them with any additional terms relating to their employment. Alternatively, you can issue a full contract of employment which incorporates the Section 1 Statement and the additional terms on or before the first day of their employment to ensure you are fulfilling your obligations.
If you don’t provide a new starter with a Section 1 Statement, or if its incomplete, then they can raise a complaint to the Employment Tribunal to determine what the terms of their contract actually are. They can also claim for compensation if they raise the complaint when they bring another claim and they are successful (such as an unfair dismissal claim or a discrimination claim).
Author: Anna Schiavetta, Employment Law Solicitor at Howarths