UK Employment Contracts

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UK Employment Contracts 

A successful business largely depends on its employees. By creating working contracts that include the right terms and benefits there will be no misconception and the perfect work-life balance can be created. At Bradford Jacobs, this is our aim, and we support companies in over a hundred countries with creating compliant and balanced labor contracts.

Our team in the UK keeps track of the British laws and regulations on a daily basis to be duly aware of updates that can be implemented in working contracts. By using our PEO and EOR service we can provide compliant labor contracts for employees in the UK including local benefits.

To support your plans, we made this guide including the basics of employment contracts in Britain. After reading this guide you will know everything about social security, notice periods, and the average working hours.

How Do You Hire UK Employees?

If a foreign company is looking to hire resident employees as part of their expansion into the UK, they must comply with the recruitment regulations concerning tax, social security contributions, employment law, as well as collaborate with or adhere to any collective bargaining, trade unions, or work council agreements.

In the UK, employment agreements are determined in written employment contracts, although this is not mandatory by law. There are two types of employment contracts that are practiced are the indefinite contract and the fixed-term contract.

National legislation and collective agreements are the main sources of employment law in the UK, which govern employment conditions, benefits, and health and safety regulations. The conditions performed vary according to the industry and sector.

To be fully aware of what you can and cannot apply to your employment practices in the UK, it is important for the employer to know the existing labor laws and employee entitlements, as well as collaborate with the appropriate local employment organizations.

Employment Contracts in UK

In the UK, an employment contract is not required to be concluded in writing, but the law does oblige the employer to provide the employee with a written statement that includes specific information regarding the terms of their employment:

  • Personal/contact information about both parties
  • Job title of the employee
  • The date of the commencement of the employment relationship
  • Salary and payment intervals
  • The place of work and the registered address of the business
  • The hours of work and information about working patterns
  • Holiday, sick pay, and other paid leave entitlements
  • Notice period and probationary period provisions
  • Disciplinary and grievance policies
  • Training entitlements
  • Whether the terms of employment are governed by a collective agreement

However, if employment contracts are used, there are two types of contracts that are applied in the UK:

  1. Indefinite employment contract – the standard type of employment contract in the UK, which is used for indefinite employment.
  2. Fixed-term employment contract – Fixed-term contracts are valid for a specific length of time and are used in cases where a specific task must be completed or when a specific event takes place.

Any changes to the employment contract must be made with the consent of both the employee and employer. If the employer wishes to amend the employment terms, they must discuss and agree to the changes with the employee before doing so.

Collective Agreements:

Collective bargaining and agreements in the UK are practiced, but their influence in employment varies according to the sector. Collective bargaining in the UK takes place both at industry-level and company-level.

Bargaining is more prevalent in the public sector, rather than the private sector. Over a quarter of employees in the private sector and about 90% of employees in the public sector in the UK are covered by collective agreements.

Collective agreements in the private sector mostly occur at the company level or individual workplace level, covering more than three quarters of employees in the sector. However, there are still some industry-level bargaining that occurs in some private industries, particularly in construction or some parts of the arts and entertainment industries.

Collective agreements are not valid for a specific period, but they most commonly are valid for a year. Industries where most employees are covered by company-level and workplace-level agreements include utilities, gas, electricity, water, telecommunications, finance, and manufacturing.

What Laws About Employment Exist in the UK?

UK employment law is regulated by national legislation and collective agreements, all of which have a great significance to the individual contracts between the employer and employee. Thus, companies and employers must be aware of the laws and agreements that apply for their sector’s and/or industry’s working conditions, pay, and benefits.

In employment, certain forms of legislation must be followed, which include:

  • National Minimum Wage: All employees are entitled to receive at least the statutory minimum wage in the UK, which is split into two types, depending on your age and/or apprenticeship:

    - National Living Wage – for employees aged 23 and over
    - National Minimum Wage – for employees who are at least school-leaving age (16-18)

  • Working Hours & Overtime: The maximum workweek (which includes overtime) is 48 hours which is averaged over a reference period of 17 weeks. Employees may opt out of this maximum limit by giving written consent.

    After 26 weeks of working for the same employer, the employee may request flexible working arrangements. The request may be made once in every 12-month period, and employers must accept or deny this request within 3 months of receiving it.

  • Rest Days & Breaks: During a workday, employees are entitled to a break of 20 minutes for every six hours of continuous work. Employees are also entitled to a daily rest period of no less than 11 consecutive hours of rest in a 24-hour period, as well as an uninterrupted period of at least 24 hours in each 7-day period.

  • Health and Safety: In the UK, health and safety legislation states that the employers must guarantee that the employees’ health, safety and welfare is ensured.

    Workplaces with trade unions have the right to appoint safety representatives who will represent the employees’ interest in terms of health and safety, as well as push for the appointment of a safety committee. In non-union workplaces, the representatives have fewer powers, and cannot undertake workplace inspections.

  • Annual Leave: Employees are entitled to a minimum of 28 days of paid annual leave per year. An employer can also choose to include bank holidays as part of the employee’s annual statutory leave.

  • Sick Leave: Employees are entitled to sick leave, as well as a Statutory Sick Pay if they are not able to work for 4 or more days, consecutively. The weekly rate for this pay is £96.35 and can be paid up to a maximum of 28 weeks.

    Statutory Sick Pay is paid by the employer, and they cannot require employees to contribute towards their own sick leave payments. If the employee has regular periods of sickness, these periods may count as linked. This, however, can only be eligible if the periods:

    - Last 4 or more days each
    - Are 8 weeks or less apart

  • Maternity Leave: Pregnant employees are entitled to 52 weeks of maternity leave, which is split into two types of leave:

    - Ordinary Maternity Leave – the first 26 weeks of leave
    - Additional Maternity Leave – the last 26 weeks of leave

    The earliest time that maternity leave can be taken in the UK is 11 weeks before the expected week of childbirth. Employees are not required to take all 52 weeks of their maternity entitlement, but they must take two weeks’ leave once the baby is born.

    Pregnant employees are also entitled to a statutory maternity pay (SMP) on the condition that they have worked for their employer for at least 26 weeks and meet the minimum earning requirements. The Statutory Maternity Pay is currently set at 90% of the employee’s average earnings for the first six weeks of maternity leave, or £151.97 weekly wage 90% of the employee’s average weekly earnings (whichever is cheaper) for a maximum of 33 weeks.

  • Paternity Leave: Eligible employees can take 2 consecutive weeks of paternity leave within a period of 56 days that begins on the date of the child’s birth and must be taken in blocks of a week.

    If the employee is already on parental leave, they are not entitled to paternity leave. The qualifying week for this leave type is the 15th week before the child is due. Their eligibility includes 26 weeks of continuous service with their employer, being the expectant of the responsibility for the child’s upbringing, and being the biological father of the child, or married to/the civil partner of the child’s mother.

    The statutory weekly rate of Paternity Pay is £151.97 weekly or 90% of the employee’s average weekly earnings.

  • Parental Leave: Employees are entitled to 18 weeks of unpaid parental leave for each child or adopted child, until they reach 18 years of age.

    Each parent is entitled to 4 weeks of parental leave, which should be taken in a period of one week’s duration unless agreed between the employer and employee.

  • Probation: There is no statutory probationary period, but the employer may add their own probation period that can be between 3-6 months.

  • Termination Notice: The notice period for employment termination is one week, which increases for every year of service, with a maximum of 12 weeks. However, longer notice periods are provided for senior employees.

  • Severance Pay: In most cases, when an employee is dismissed, they are normally entitled to the same pay that would get if they worked through their notice period, which is known as ‘notice pay’. Their pay must also include:

    - how much annual leave they have not taken
    - overtime payments
    - bonuses
    - money deducted for training courses

How Do You Onboard UK Employees Internationally?

Considering whether to move existing employees into the UK or recruit new staff in-country is the first phase of a parent company’s plan to onboard employees in a new territory. You must then deal with acquiring the right visas and work permits and ensure compliance with all local laws and regulations at the risk of attracting fines and sanctions from UK authorities. This takes up your time, money, and resources that can be of better use in other areas of your international establishment plan.

The most efficient and effective method of onboarding employees into the UK is through a global recruitment company such as Bradford Jacobs. Our Professional Employer Organization (PEO) and Employer of Record (EOR) services will manage every stage of the employment process from finding the employee to seeing that their first check is paid on time. We can ensure the right people in the right time to help you get the ball rolling on your business expansion plans.

Translating UK Employment Contracts

When creating employment contracts in the UK, employers must also consider contracts’ translations for both their employees and the local authorities.

Employers must deal with two legal systems, as well as the cultural and linguistic differences between the source and target languages. Legal systems have their own cultural, social, and linguistic structures. Incompatibility of these structures between the source and target languages are where the difficulties lie in translating legal documents.

Translating a document without an understanding of the similarities and differences between both systems, the intention behind the translation, knowledge of the legal writing style of the target language, and the correct legal terminology can be risky, and might lead to serious consequences and legal proceedings.

Tick all the boxes

Bradford Jacobs’ comprehensive knowledge of all aspects of UK employment laws make us the ideal partner for your expansion into the gateway to Europe.

The global reach of our Professional Employer Organization (PEO) recruitment platforms combined with the in-country knowledge of our Employer of Record (EOR) specialist teams guarantee a successful and smooth transition of your employees into your new territory (including onboarding plans, resources, and guides on local culture, customs, and business etiquette).

To learn more about our PEO and EOR packages, contact one of our sales specialists today.