One of the basic legal obligations that employers face under Section 1 of the Employment Rights Act 1996, is to issue all employees with a written statement of employment particulars within two months of them starting work, which details the main terms and conditions of their employment (the exception being if they are working for one month or less).
Whether you employ one person, hundreds of people or thousands of people this same legal responsibility applies. However, surprisingly some employers believe that if there is no paperwork in place then no contract of employment exists and this gives them greater flexibility! How wrong they are and in reality the opposite can actually be true!
The ‘contract’ of employment exists as soon as the employee starts work. Verbal contracts, although more difficult to substantiate the exact terms of, are equally binding – especially if an employee has already done some work and been paid for it.
The Written Statement is not in itself a contract of employment however, it is evidence of the contract of employment. Employers who fail to issue written statements to relevant employees or fail to include the necessary information within the written statement are likely to be faced with Employment Tribunal Claims.
Employees may refer the matter to a Tribunal in order to decide the terms and conditions that they are working under and what particulars they should have been given. The penalty for failure to provide a written statement is either two or four weeks’ pay (capped at the normal maximum of £479 per week), albeit the employee succeeds in another claim, e.g. unfair dismissal or underpayment of wages.
Having the required accurate paperwork in place actually makes it easier for employers to affirm the terms and conditions of employment and do not allow for misinterpretation. Not having the paperwork in place essentially provides much wider scope for flexibility and dispute.
It is therefore, clearly in the best interests of every employer to ensure that they adhere to the law regarding the issuing of written statements to avoid the risk of potential Employment Tribunal Claims but also to ensure that the terms and conditions are exactly how the employer needs them to be. If employers leave contract terms to chance, then they are not only breaking the law but they could regret it later.