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Empowering the Employee - What to look for in an employment contract
Written by Dr Elena Moran
People enter the employment market at different ages and different stages in their career.Some join straight from school and others get their first job later in life after bringing up a family or obtaining a series of academic qualifications. No matter how qualified or unqualified you are, don’t accept any offer of employment unless you understand exactly what is being offered and what your obligations to your employer will be.
The first point to check is the rate of pay. This must not be below the minimum wage, which is currently set at £5.40 per hour or £4.05 per hour for a trainee which can apply for a maximum period of one year to new employees on an accredited training programme. It is always open to an employee to accept a job at a lower rate and then force the employer to increase the rate to the minimum wage and claim any shortfall from the date the employment started. While this may not make you flavour of the month with your employer, any attempt by the employer to dismiss or otherwise penalise you for claiming the minimum wage is itself unlawful.
Check what deductions the employer can make from your wages. It is perfectly acceptable for an employer to deduct social security contributions, pension contributions, ITIS payments and other sums that it is legally obliged to take from your wages. However, some employers insert clauses that allow them to recoup training or moving costs if an employee leaves within a certain time frame. While this is not necessarily unreasonable, make sure that you are not tied in for too long and that the amount you have to repay reduces with time.You don’t want to find that five years after going on a training course that you didn’t really want to attend you have to pay your employer hundreds or even thousands of pounds if you move to another job.
Make sure you understand the position with regard to overtime. First, is it compulsory or optional? Second, will it be paid and if so at what rate?If there is no right to be paid is there a right to take time off in lieu? While it is common for senior employees to be paid a fixed rate for the job irrespective of how long they have to work, junior employees can expect to be paid for overtime, especially if it is compulsory. Also read the small print in relation to your place of work.Some contracts state that an employee’s main place of work will be an office in Jersey, but the employee can be asked to work anywhere else worldwide.If there is a risk that you might be asked to work in theLondon office and you don’t want to, make that clear before you sign the contract.
Know your holiday entitlement. The minimum statutory entitlement is two weeks paid holiday each year plus paid leave or time off in lieu for all public and bank holidays. Check whether you must take some or all of your holiday on certain days. For example, some employers close in August or over the Christmas period and insist that employees take these days as annual leave. Many employers do not allow employees to carry leave over from one year to the next.If this is the case (or you can only carry over a few days) find out if your employer will buy-out any unpaid leave.Even employers who say that they will not buy-out leave may do so if the employee is genuinely too busy to take time off.
Sick pay is another important consideration.Some employers have very generous sick pay schemes and will support employees through long periods of illness.Other employers offer no sick pay at all no matter how genuine the illness. Even the fittest peoplebecome ill occasionally and you should think carefully about how you will cope if faced with a period of unpaid sick leave.
Find out if the employer has a pension scheme.In most cases it is worth joining an occupational pension scheme, especially if it is a final salary scheme or non-contributory (only the employer has to pay contributions). However, make sure you fully understand how the scheme works before you join and consider taking independent advice.One thing to look out for is what happens to the employer’s contributions if you leave. Some employers take back their contributions if you leave within a certain time frame, in some cases as long as five years. Also, check the circumstances in which you can get your contributions back if you leave the scheme or whether you have to leave the money in until you retire.
You may become disenchanted with your job or you may simply get a better offer. Make sure you understand the notice periods in your contract both the notice you have to give your employer if you want to leave and the notice the employer has to give you. Many contracts have a probationary period during which your employment can be terminated at very short notice.Once you have worked for half a year you are entitled to a minimum of two weeks notice. This goes up to four weeks when you have worked for two years.
Look very carefully at any restrictions on what you can do after your employment terminates. Many employers have non-competition and non-solicitation clauses in their contracts which stop you from taking clients with you when you leave. While these clauses are only effective if they are reasonable make sure you understand the full extent of any restrictions before you promise to take clients to a new employer.
Finally, make sure that your employer gives you a proper contract. All employers are obliged to provide employees who work more than eight hours a week with a written statement of the terms of employment. The statement must include matters such as the rate of pay, when and how the employee is to be paid, hours of work, sick pay, holiday pay, pension provision, maternity leave and notice periods. An employer that fails to provide a written statement within four weeks of the employment starting (or within four weeks of any change in the terms) is guilty of a criminal offence so don’t be afraid to push your employer to provide you with a signed contract as soon as you start work.