What do your job contracts miss?

When an employee resigns or is dismissed, having the right clauses in your employment contracts can ensure as an employer you are protected and have the flexibility you need to manage your workforce.

But which clauses are important to consider reviewing or adding to your employment contracts?

Employer notice period clause:

Notice periods should be clearly outlined within an employment contract, and it is important to note that the notice period for resigning or terminating do not have to be the same.

The legal minimum notice periods are less than one month’s service – no notice or after that, one week’s notice for each complete year of service up to a maximum of 12 weeks’ notice.

Payment in lieu of notice (PILON) clause: A PILON clause means paying an employee for the period of notice they would have been required to work if you would like them to leave immediately rather than working their notice.

Lay-off clause: A lay-off clause covers unexpected downturns in work and allows an employer to send employees home unpaid (lay them off ) temporarily. However, the employee may be entitled to a small statutory payment of up to £30 per day for five days. It is not possible to lay employees off without an employment contract that permits this.

Deductions from salary clause: Should an employer wish to recoup monies from an employee such as to cover the cost of damaged company property or an overpayment in holiday pay, this clause allows an employer to make deductions directly from the employee’s salary. However, this is only possible where a contract permits it.

Post-termination restrictions (restrictive covenants): If employees leaving your business have the potential to poach clients, contacts or staff members, having a clause that prevents this is valuable. Restrictive covenants cannot be used as “an unreasonable restraint of trade” and usually last for a set period.

Garden leave clause: A garden leave clause allows the employer to ask that the employee does not to come into work, work at home or another location or have contact with customers, suppliers, and colleagues during their notice period.

Mobility clause: A mobility clause allows an employer to move employees to another location within reason. If the employee refuses, they could be dismissed, provided the request to relocate was reasonable.