WHY CONTRACTS OF EMPLOYMENT ARE A MUST FOR ANY SERIOUS BUSINESS
I’m not going to harp on about compliance and legal requirements, they go without saying.
I do want to talk about some very practical reasons why you should have good contracts of employment.
Let’s take the example of the company who ended up with a dispute on their hands because they had tried to do the right thing and be a nice employee – but had no written contracts.
Our case study (which is based on a real situation that arose with a company) involved an employee who was off sick. The company chose to pay the employee because they wanted to be nice and decided to exercise their discretion.
But when the employee went off sick for a second time and the employer decided not to pay them, the employee then shouted “breach of contract”… they had been paid before so why had they not been paid this time?
Had there been a written contract saying the company did not pay sick pay (but may exercise its discretion), the dispute would not have arisen. More than this, the reaction from the employee may have been one of gratitude (they paid me when they did not have to), rather than resentment which caused damage to the ongoing relationship!
This ‘misunderstanding’ took a lot of time to resolve and caused permanent damage to the employment relationship. It could have been avoided if the company had written contracts of employment in place.
Think about other areas where ‘misunderstandings’ can happen and could be avoided if you were clear about your terms of employment and your rules and policies?
And by the way… it is a legal requirement to provide employees with details about sick pay … as well as lots of other things…
If you don’t have written contracts of employment or you have not reviewed yours in some time, take a look at our Professional Templates that provide cost-effective solutions that could save you a lot of pain down the road, or talk to us about our bespoke contract drafting services.
Paula Fisher. You can contact Paula on firstname.lastname@example.org
If you feel that you need guidance or advice on this matter, please call Practical HR on 01702 216573 or email Paula on the above.