Employment Contracts What Should Be Included

Why It Matters

Updated, comprehensive contracts reduce legal exposure, ensure compliance, and provide operational flexibility for employers and certainty for employees.

Key Takeaways

• Employment contracts must include statutory Section 1 statement items.
• Implied term of trust and confidence protects against constructive dismissal.
• Flexibility clauses for duties, location, and hours are best practice.
• Include layoff/short‑time working clauses for emergency work stoppages.
• Notice‑compensation and criminal‑disclosure clauses safeguard employer against abrupt departures.

Summary

Employment contracts form the legal backbone of the employer‑employee relationship, and the podcast host Allison Collie explains why they are both a statutory requirement and a practical tool for managing expectations. She outlines the difference between a full written contract and the minimum Section 1 statement required under the Employment Rights Act 1996, noting the 2020 amendments that expanded the mandatory information to be provided on day one.

Key points include the existence of implied terms such as the duty of trust and confidence, which underpins constructive unfair dismissal claims, and the comprehensive list of clauses now required—pay, hours, holiday, sick pay, pension, notice, probation, and references to disciplinary and grievance procedures. Collie highlights common gaps in existing contracts, especially the failure to incorporate the newer 2020 requirements around training, flexible working hours, and location details.

She cites practical examples, such as employers using layoff or short‑time working clauses during COVID‑19 to avoid redundancy claims, and recommends best‑practice additions like flexibility clauses, notice‑compensation provisions, criminal‑disclosure obligations, and post‑termination confidentiality restrictions. These clauses, while not legally mandatory, are drawn from case law and industry experience to mitigate risk.

The overall implication is clear: businesses that neglect to update their contracts risk non‑compliance, costly disputes, and operational inflexibility. Leveraging specialist HR services to review and tailor contracts can ensure legal compliance while protecting the organization’s strategic interests.

Original Description

Legal requirements, best practice & changes needed.

In this episode 262 of the employment law and HR podcast, I bring you a rundown and reminder about employment contract terms and section 1 statements and the importance of getting it right.

In this episode we cover:

The difference between a contract and a section 1 statement.

Why it is important for both employer and employee to issue a written statement of terms.

The types of clauses in a contract, including terms implied by law.

The minimum legal requirements to be set out in writing for employees as set out in Section 1 of the Employment Rights Act 1996.

Changes to the law that took place in 2020 which many employers have failed to action.

The legal requirement to issue a statement of terms from day 1 of employment.

Best practice clauses to include.

My recommendations about terms and why.

Common problems we see with employment contracts.

Changes and additions needed to employment terms as a result of the Employment Rights Act 2025

Key takeaway:

Employers need to take the time to review their employment contracts or section 1 statements to ensure they are compliant with the law as it stands and as it will be as the Employment Rights Act 2025 starts to be implemented.

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