A practical approach to dealing with contracts of employment
At Moore Kingston Smith People Advisory, we have been reviewing and drafting employment contracts for our clients for many years. Changes to legislation, case law and the world of work are constantly changing and often unexpected or rapid, so we are continually updating and improving our clients’ contracts of employment to provide them with the most protection and flexibility.
Often clients come to us with a contract of employment that they have been using and issuing to staff for several years. It’s surprising how it is often viewed as a static document.
Below are some of the issues we have seen clients encounter through poorly drafted or out of date employment contracts.
Location of work and mobility
An employer needs to relocate and there is no provision in the employment contract that requires employees to move to an alternative location.
Or, there is a provision in the contract, but it is too vague or wide to enforce.
Without a well drafted mobility clause, an employer in this position is obliged to treat the relocation as a redundancy.
Remote working
An employer finds out that one of its home workers has moved several hundred miles away from the nearest company premises and is claiming travel expenses from their new home.
Without a clear contractual provision in relation to this, an employer would potentially have to rely on the goodwill of the employee to negotiate what expenses to pay.
Length of service and PILON
An employer wants to dismiss an employee before they reach two years’ service to reduce the risk of unfair dismissal claims.
Employees with between one month and two years’ service are entitled by statute to one weeks’ notice (except in cases of gross misconduct).
Without a PILON clause (pay in lieu of notice) If this statutory notice is not given, the termination date automatically extends by one week. This means that the employee would accrue 2 years’ service and can pursue an unfair dismissal claim if the employer does not terminate with a PILON more than a week before the two year anniversary date.
Company Property – social media contacts
An employer’s top salesperson is leaving and they have acquired many client contacts on their LinkedIn account since being employed.
The employer regards these contacts as company property and wants the salesperson to remove these connections from their account.
Without a clear contractual provision confirming that the employee’s LinkedIn contacts are company property, an employer may struggle to establish ownership of these contacts, particularly if the employee has a mix of personal and professional contacts on their profile.
Short time working
Employers who had this provision in their employment contracts during the coronavirus pandemic were in the advantageous position where they could act fast, and without lengthy consultation, lay employees off (or place them on furlough).
But a short time working provision can be used in so many unexpected situations that may arise.
For example, there has been a flood at the employer’s premises, and it means staff will be unable to work for several weeks.
Without a short time working clause, the employer is obliged to consult and gain agreement from employees to reduce their hours or lay them off.
Contract reviews
These are just a handful of examples we have seen over the years, but there are many more. Poorly drafted post termination restrictions being probably the most common.
Feel free to contact us for a review of the contract of employment you are currently issuing to staff.