Employment contracts

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Contract terms

The legal parts of a contract are known as ‘terms’. An employer should make clear which parts of a contract are legally binding.

Contract terms could be:

  • in a written contract, or similar document like a written statement of employment
  • verbally agreed
  • in an employee handbook or on a company notice board
  • in an offer letter from the employer
  • required by law (for example, an employer must pay employees at least the National Minimum Wage)
  • in collective agreements - negotiated agreements between employers and trade unions or staff associations
  • implied terms - automatically part of a contract even if they’re not written down

Implied terms

If there’s nothing clearly agreed between you and your employer about a particular issue, it may be covered by an implied term - for example:

  • employees not stealing from their employer
  • your employer providing a safe and secure working environment
  • a legal requirement like the right to a minimum of 5.6 weeks’ paid holidays
  • something necessary to do the job like a driver having a valid licence
  • something that’s been done regularly in a company over a long time like paying a Christmas bonus
View a printable version of the whole guide

Part of Employ someone: step by step

  1. Step 1 Check your business is ready to employ staff

    1. Prepare your business to take on employees

  2. Step 2 Recruit someone

    You need to advertise the role and interview candidates. You can use a recruitment agency to do this or do it yourself.

    1. Find out about recruiting someone yourself on Acas
    2. Find out about using a recruitment agency

    As an employer you must make sure you recruit employees fairly.

    1. Avoid discrimination during recruitment
    2. Make your application process accessible for employees with disabilities or health conditions

  3. and Check they have the right to work in the UK

    1. Find out how to check an applicant's right to work

  4. and Find out if they need a DBS check

    You may need to check someone's criminal record, for example, if they'll be working in healthcare or with children.

    1. Find out if you need a DBS check
    2. How to do a DBS check

  5. Step 3 Check if they need to be put into a workplace pension

    Check if you need to put your employee into a workplace pension scheme:

  6. Step 4 Agree a contract and salary

    When someone accepts a job offer they have a contract with you as their employer.

    1. Check what the National Minimum Wage is for different ages
    2. Check what the National Minimum Wage is for different types of work
    3. You are currently viewing: Check what to include in a contract
    4. Agree a written statement of employment particulars

  7. Step 5 Tell HMRC about your new employee

    You must tell HMRC about your new employee on or before their first pay day.

    1. Tell HMRC about a new employee
    2. Get their personal details and P45 to work out their tax code
    3. If you don’t have their P45, use HMRC’s ‘starter checklist’
    4. Check what to do when you start paying your employee