Contracts Of Employment

The importance of contracts of empoyment

We cannot emphasize enough that every employee should be given a contract of employment. We repeat: every employee must be given a contract of employment. This applies to all employees, whether full-time or part-time, temporary, seasonal or casual.

Under The Employment (Miscellaneous Provisions) Act 2018, an employer has five days to issue a written statement of core terms to a new hire. Full written terms of employment must be provided within the first two months of employment as stipulated under the Minimum Notice and Terms of Employment Act 1994. Failure to follow these two steps can lead to a claim being taken to the Workplace Relations Commission (WRC) and it is noteworthy that an employee does not need to have a year of service in order to bring a claim for breach of the provisions.

It is also important that the contract of employment is properly drafted and includes the essential terms and conditions of the position to include, for example, work location, rate of pay and holidays. An employment contract, if correctly prepared, will provide security and protection for both the employer and the employee. It should not be overly long. A common mistake is to have contracts of employment that extend to several pages and on examination, it is found that what is contributing to the length of the document are work policies and procedures that have been included. These have no place in a contract of employment. They belong in your Employee Handbook. The reasons for this are twofold:-

  1. Changing any contractual term will require employee consent. If the policies and procedures form part of the employees’ contracts, each employee will need to consent to each change of a policy or procedure. This will not be practical for employers where they need to update this documentation.
  2. While incorporating policies and procedures into the contract of employment means that the employee is contractually bound to follow those policies and procedures, so too is the employer. An employer would be leaving itself open to a claim for breach of contract for any minor breach of the procedures.

Employee handbooks are essential tools for setting out the business’ policies and procedures such as grievance and disciplinary procedures, and information regarding leave and other benefits. It should be updated on a regular basis, and accessible to all employees. This allows for total transparency, and a workforce that has access to clear information tends to be a more contented group. The goal is that the handbook will be the go-to reference for all employment-related information.

Always remember a handbook can be amended without consultation, but a contract cannot be changed without agreement. The importance of devising an employee handbook cannot be underestimated and it will prove itself to be a very useful tool for the employer in the event of an employee relations issue.

Finally, best practice dictates that the employer should always ask the employee to sign an acknowledgement that the handbook has been issued and that its provisions are understood.

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