Your Employment Contract: Understanding What You’re Signing
Whether you’re starting a new job or reviewing your current terms, understanding your employment contract is essential. This guide explains the key parts of an employment contract, what to look out for, and your rights under the law in England and Wales.
What is an employment contract?
An employment contract is a legally binding agreement between you and your employer that sets out the terms and conditions of your job. It doesn’t need to be written — a verbal agreement or email exchange can still create a contract — but written contracts are far more common and recommended.
Your right to a written statement
By law, you must receive a written statement of employment particulars on or before your first day of work. This includes key information such as:
- Your employer’s name and your job title
- Start date and (if fixed-term) end date
- Pay and payment frequency
- Working hours and days
- Holiday entitlement
- Place of work
- Sick leave and pay
- Pension arrangements
- Notice periods
- Disciplinary and grievance procedures
This may be in one document or across several. It forms the basis of your employment contract.
Key clauses to understand
1. Job title and duties
Make sure your role is clearly described. Some contracts include catch-all wording like “and any other duties reasonably requested.” While this adds flexibility, vague descriptions can be risky — know what’s expected of you.
2. Hours of work
Check the specified hours and whether you’re expected to work overtime. If the contract says you’ll work “as required,” ask for clarification.
Note: The Working Time Regulations 1998 generally limit you to 48 hours per week on average, unless you opt out in writing.
3. Pay
Check the pay rate, payment schedule (e.g., monthly or weekly), and whether bonuses or commission are guaranteed or discretionary.
4. Holidays
You’re entitled to at least 5.6 weeks’ paid holiday per year (including bank holidays). Check how holiday is calculated and whether unused leave carries over or is lost.
5. Sickness policy
Most contracts refer to statutory sick pay (SSP), but some offer enhanced sick pay. Check how long you’re paid for and at what rate.
6. Notice period
Understand how much notice you or your employer must give to end the contract. Statutory notice is:
- 1 week if employed for more than a month but less than 2 years
- 1 additional week for each full year of service, up to 12 weeks
Many contracts set out longer notice periods. Employers can often pay in lieu of notice (PILON).
7. Probationary period
Often 3–6 months, this allows either side to terminate the contract more easily. During this time, notice periods may be shorter and full benefits may not apply.
8. Place of work
Check if you’ll be expected to work at multiple locations, remotely, or travel regularly. Clauses allowing relocation should be treated with caution.
9. Disciplinary and grievance procedures
Your employer must provide details of these processes. If not included in the contract, they must be made available separately.
10. Post-termination restrictions
These include clauses such as:
- Non-compete: You can’t work for a competitor for a set period
- Non-solicitation: You can’t approach clients or staff of your former employer
- Confidentiality: You must not disclose sensitive information
These clauses are enforceable only if reasonable and protect a legitimate business interest. Seek legal advice if you’re unsure.
Can your employer change your contract?
Your employer can’t change your contract without your agreement, unless there’s a flexibility clause (also called a “variation clause”). Even with such clauses, changes must be reasonable and made in good faith.
If changes are imposed without agreement, you may have grounds for:
- Breach of contract
- Constructive dismissal (if you resign in response)
- An unlawful deduction from wages
Tips before signing
- Read the contract carefully — don’t rush it
- Ask questions about anything unclear or vague
- Get any verbal promises in writing
- Don’t be afraid to negotiate key terms like pay, benefits, or notice
- Seek legal advice for complex or senior roles
What if you don’t have a written contract?
You still have a contract based on what was agreed, including implied terms such as:
- Your right to be paid
- Your duty to carry out work
- Your right to a safe working environment
However, a lack of written terms makes disputes harder to resolve, so ask your employer to provide one if they haven’t.
Disclaimer
This article provides general information about employment contracts in England and Wales as of April 2025. It is not legal advice, and laws can change. Your individual circumstances may affect how the law applies to your situation.
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