Q: I have worked for company for five years now and still have no contract of employment. Should I have one? What problems might myself and my employer encounter if I don’t?
Jan 23 2008
Answered by: Peter Done Ask a question
From an employee perspective: The problems you may encounter include the fact that you don’t have a mechanism to make your voice heard in the organisation, you don’t know with any certainty what the company’s duties and obligations are, or for that matter, what yours are. A contract of employment puts all of that in perspective and in my experience makes for a much happier and more productive workforce.
From an employer perspective: Employees have a statutory right to a statement of terms of employment as required by the Employment Rights Act and they can claim a few hundred pounds compensation for not receiving one. However, the real damage is done when disputes arise between the parties and there are no formal written contracts in place to resolve the argument.
This could be performance based and related therefore to the individual in question or it could be driven by the needs of the business such as the reduction of work leading to redundancies.
The failure to provide the employee with a disciplinary or grievance procedure can have severe legal repercussions and can result in automatic unfair dismissal awards. These awards are potentially very costly and usually run to thousands of pounds with the employer’s costs of defending the claim adding insult to injury!
I was asked by an employee last week about this subject and she was clearly getting very frustrated with her employer’s failure to provide her with a contract. I suggested that she write down her understanding of the terms and conditions that existed.
She could then hand a copy to her employer and say that she would assume that if she didn’t get a response contradicting her understanding of the relationship within 30 days, then she would take it that the basic terms and conditions of her employment were as she had stated them.
It’s a very unorthodox approach but it did give her a way of moving things forward, without which she may have resigned and made a claim of constructive/unfair dismissal. Here is a link to a an example of a Written Statement of Employment Particulars form provided by Business Link (pdf).
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