Establishing Legal Compliance and Setting the Foundation for Success

In issuing written employment contracts on or before a new employee first day of work is not merely a best practice it is a statutory requirement. The Employment Rights Act 1996 (ERA 1996) obliges employers to provide a written statement of employment particulars no later than day one. This obligation is designed to ensure clarity and fairness, laying the foundation for a productive and transparent employment relationship.

Failing to issue contracts in compliance with these requirements carries significant legal and commercial risks, including penalties, reputational harm, and potential employment tribunal claims. Conversely, adhering to the requirement delivers clear benefits, enhancing trust, reducing disputes, and strengthening employer-employee relations.

Legal Obligations Explained: What the Employment Rights Act 1996 Requires

Section 1(4) of the ERA 1996 mandates that employees must receive a written statement of employment particulars no later than their start date. This statement must include:

  • The name of the employer and employee.
  • The date that the employment (and continuous employment) begins.
  • The scale or rate of remuneration, or the method of calculation.
  • Hours of work, including normal working hours and any provisions for variability.
  • Terms and conditions relating to holiday entitlement, sick leave, and pay.
  • Details of notice periods and disciplinary procedures, in line with the Acas Code of Practice on Disciplinary and Grievance Procedures.
  • Any applicable probationary periods and post-termination restrictions.

Employers who fail to comply risk penalties of up to four weeks as an add on claim to other potential employment claims.

Risks of Non-Compliance: Perils Beyond Financial Penalties

A lack of compliance with the statutory requirements of the ERA 1996 leaves employers exposed to a host of risks:

  1. Employment Tribunal Claims:
    Employees who do not receive compliant written statements can bring a claim to the employment tribunal at any time during their employment or up to three months following termination. Tribunals have discretion to award compensation of up to four weeks’ pay for breach of this obligation as an add on claim to other claims.
  2. Reputational Damage:
    Non-compliant businesses may develop a reputation as untrustworthy employers, potentially alienating current and future talent. In competitive markets, the quality of an employers internal HR policies is increasingly scrutinised by employees.
  3. Increased Risk of Disputes:
    Without a clear and formal contractual agreement, disagreements over pay, job duties, probationary periods, or notice terms are far more likely to arise, leaving the employer vulnerable to costly and time-consuming disputes.

Contact our dispute resolution team today to review your contracts or build compliant templates tailored to your business needs on 01756 799000 or m.irlam@mewiessolicitors.co.uk