The Importance of Employment Contracts

David Miles The introduction of new employment legislation in the UK from the beginning of October 2004 has brought employment law issues such as employee contracts and staff dispute resolution to the forefront of many employers' minds.

These latest changes to the law mean it is now more important than ever for all employers to have proper contracts of employment in place for their staff and to make sure they have a compliant dispute resolution procedure within their company.

Failure to do this could mean that if a member of staff takes you to an employment tribunal you will not only lose by default, but you will also have to pay 50% higher fines.

A contract of employment exists as soon as an employee starts work, thus indicating that he or she accepts the terms and conditions offered by the employer.

Often the contract is agreed orally and is not written down. However, an employer is usually required by law to give all employees who have been in employment for at least one month, written details of the main particulars of their employment.

Since October 2004, all employers and employees have been required to follow a new three-step process when dealing with most dismissals, disciplinary actions or grievances. If they don't, they could face a financial penalty should a dispute reach a tribunal.

Most small businesses do not have the resources and expertise internally to deal with these issues in an effective and efficient manner. However, you do not need a dedicated HR department in order to comply with the employment legislation. Instead, you can outsource your personnel requirements to a specialist HR consultancy who can handle all these issues for you. The costs for such a service are often surprisingly reasonable, especially when you consider the penalties you may face if you try to do it all yourself and get it wrong.

For more information on the issues raised in this article, visit the Employee Contracts website.

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Copyright 2004 David Miles. You are welcome to reproduce this article on your website, so long as it is published "as is" (unedited) and with the author's bio paragraph (resource box) and copyright information included. In addition, all links to external websites must be left in place.

About the Author

David Miles is the editor of a number of business and finance related websites, including: The Employee Contracts Website and UK Mortgages & Remortgages.