Employment Contracts and Written Statements of Employment Particulars Factsheet number: 4.3 Last Updated: 08 August 2021 Introduction An employment contract exists as soon as your Personal Assistant (PA) starts work with you. In basic terms an employment contract is an agreement by a worker to carry out a specific type of work for their employer in return for pay and other benefits. Starting work proves that your PA accepts the agreed terms and conditions offered by you either verbally or in writing and implied terms that always form part of the employment relationship. Both you and your PA are bound by the terms offered by you and accepted by them. Your PA by law has to be given a written statement of employment setting out the 'main particulars' (key terms and conditions) of their employment on their first day of work. Contents 1. Employment contracts 1.1 What is an employment contract? 2. Written statements 2.1 What is a written statement of employment? 2.2 What information should I include in the written statement of employment? 2.3 Step-by-step guide to the key terms 3. Implied terms 3.1 Different types of implied term 3.2 Custom and practice 4. Making changes to the written statement of employment, including changing contract types 5. Ending the employment contract 6. Breach of contract 6.1 What happens if I breach the terms of the employment contract? 6.2 What happens if my PA breaches the terms of the employment contract? 6.3 Constructive dismissal 1. Employment contracts As an employer the health and safety of your staff is one of your key responsibilities. Not only do you have important legal responsibilities in this area, the more focus you put into creating a good working environment the more productive and supportive your PAs will be. 1.1 Your key responsibilities An employment contract is an agreement between you and your PA which sets out the PA’s employment rights, responsibilities and duties (their terms and conditions) whilst they are working for you. These are called the contract terms and they are legally enforceable. Contract terms can be verbal, written or implied. They could be: verbally agreed at interview or on the phone. written down in an employment contract or written statement of employment. written down in an advert or job description. written down in an offer letter. required by law e.g. that the PA must be paid at least the minimum wage. implied terms (see below). in a handbook or on a notice board available to your PA. All of these terms together make up the employment contract even though they may not all be in writing. An employment contract is created as soon as the PA accepts your job offer. However a written contract must be issued to your PA on their first day of work. You and your PA are bound by the employment contract until it ends (usually by one of you giving notice) or until the terms are changed (usually in an agreement between you and your PA). If either you or your PA breaks a term of the contract, the other is entitled to sue for breach of contract (see below). 2. Written statements of employment 2.1 What is a written statement of employment? A written statement of employment sets out the key terms and conditions of your PA’s employment. All employees are entitled to one the day they start work. A written statement of employment is a very basic type of written employment contract and there are certain key terms that you must include (see section 2.2 below). It is a legal requirement for you to issue a written employment contract or written statement of employment on the first day your PA starts work with you. If you wish you can use the employer template below to issue a written statement: 4.3a Example employment contract (written statement of employment particulars) If you do not wish to issue a separate written statement of employment, you can include all the key terms listed in section 2.2 in the job offer letter, which can also act as a written statement of employment. It is a legal requirement to issue a separate written statement of employment the day your PA starts work with you as this will avoid confusion and minimise potential problems later on. Additional information regarding employment contracts can be found at: www.gov.uk/employment-contracts-and-conditions. If you receive the services of a self-employed person or an agency worker, you do not have to provide them with a written statement of employment. 2.2 What information should I include in the written statement of employment? The written statement of employment does not need to cover all of your PA’s employment terms and conditions however, by law; it must include the following information: Your full name and the PA’s full name Start date of the employment Location of the employment e.g. your address Rate and method of pay (including when they will be paid) e.g. ‘monthly on the last Friday of every month by cheque’ Hours of work Holiday entitlement Where the employee will be working (including the address) Sick pay arrangements Notice periods that apply Information about disciplinary and grievance procedures Pension arrangements for employees Details of the type of employment contract that exists e.g. permanent, fixed term (including end date), casual or zero hours. 2.3 Step-by-step guide to the key terms Please note the guide below is intended to assist you if you wish to write your own written statement of employment to issue to your PA. They are the core terms as listed above that you must include in a written statement of employment. All of these terms (as well as other useful terms and conditions) are included in the example employment contract (written statement of employment particulars) above. Parties to the contract Your full name and the PA’s full name Type of contract Permanent: there is no fixed end date and the PA works a guaranteed no of hours each week. Fixed term: there is a fixed end date (which you should indicate) but the PA works a guaranteed number of hours each week. Casual: PA works only when required and the work is usually irregular. Their hours are not guaranteed. Zero hours: PA works only when required and the hours are usually regular but are not guaranteed. Job title and job description e.g. ‘Personal Care Assistant’ You should attach a copy of the job description as it forms part of the written statement of employment. Place of work The PA’s place of work will usually be your home and/or the local community. You should include your address. Employment start date The PA’s first day of work with you. Probationary period Usually six months and beginning on the PA’s start date. During the probationary period either party may terminate the contract by providing one week’s written notice. Hours of work This will be either: Total hours per week e.g. 5 hours per week (to be worked as agreed). Set shift times e.g. 10am –1pm Monday, Wednesday and Friday. Total 9 hours per week. Casual e.g. ‘PA will work as required’ or ‘to cover sickness/absence of other PAs’. Rates and methods of pay Total per hour e.g. £8.91 per hour. ‘Payment will be made in arrears to the employee’s bank account monthly’. Pension You should offer a pension to all your workers. Those that earn more than £10,000 per year will need to be auto-enrolled. You need to provide details of the pension scheme. Holiday entitlement Details of when the holiday year starts and ends: ‘The holiday year runs from the employment start date until one year later’. Details of annual entitlement to holiday. Usually: PA’s working a fixed number of hours each week are entitled to 5.6 weeks paid holiday per holiday year pro rata to the number of hours you work per week. PA’s working a variable number of hours each week are entitled to holiday based on the statutory minimum of 5.6 weeks per year. Their holiday is calculated based on actual time worked and averaged over the last 52 weeks. Ending employment (notice periods) The PA is required to give one month’s written notice to end the employment, except during the probationary period when they only have to give one week’s notice. If you wish to end your PA’s employment other than for reasons of misconduct you must abide by the following notice periods: During the probationary period the employer is able to give one weeks' notice Employees with three months - two years’ service are entitled to two weeks’ notice. Employees who have worked for more than two years will receive one week’s notice for each full year of employment, up to a maximum of 12 weeks’ notice. Sickness Details of sick pay that your PA is entitled to e.g. that your PA is entitled to statutory sick pay only. Details of what your PA should do if they are sick and unable to come to work e.g. how long before their shift they should phone in and how often they should call to update you after their initial call (if they are going to be absent for more than one shift). Disciplinary and grievance procedure You should provide details of what your PA should do if they have a problem that they need to report formally (a grievance) as well as how you will manage (fairly and legally) any issues of misconduct or poor performance (a disciplinary). Signatures You should both sign the written statement of employment to indicate that you agree to and will abide by the terms. You should give your PA a copy to keep and keep another copy for yourself. 3. Implied terms Some contract terms do not need to be written down but are understood to exist anyway. These are called implied terms and they exist for a variety of reasons. 3.1 Different types of implied term Terms that are essential to make the contract work Terms that are obvious or assumed Terms imposed automatically by the law Terms implied by custom and practice (see section 3.2 below) Key examples of implied terms are: your duty to provide a secure, safe and healthy working environment for your PA. your PA’s duty of honesty and loyal service to you. the duty of mutual trust and confidence between you and your PA. any term too obvious to need stating, e.g. that your PA will not steal from you and that you will pay the PA reasonable wages for the work they do. any terms that are necessary to make the contract workable, e.g. that a PA employed as a driver will have a valid driving licence those imposed automatically by the law e.g. the minimum wage. 3.2 Custom and practice Some terms and conditions may become implied because you have consistently done something over a significant period without ever formally agreeing it. This is known as custom and practice. Such arrangements are usually not clearly agreed but over time become part of the contract anyway. Whether a particular practice has become a part of the contract can be very difficult to decide. There is no fixed time limit after which something is definitely part of the contract. The following will be taken into account: how seriously it has been treated; how clear it is and how consistently it has been applied; and how long it has been in place. Key areas to avoid custom and practice becoming an issue are: paying discretionary sick pay e.g. extra on top of statutory sick pay as your budget may not always be able to cover this. allowing your PA to change their hours on a regular basis without written agreement. providing favourable terms e.g. enhanced holiday allowance above the statutory minimum, maximum mileage rates, enhanced pay at certain times. agreeing holiday requests at short notice. If you agree to your PA taking holiday without much notice, you should make clear that this is a ‘one-off’ and that they should usually give the notice their contract requires. regularly allowing your PA to leave early, before the end of their shift. 4. Making changes to the written statement of employment, including changing contract types You must tell your PA in writing about any changes you wish to make to their written statement or employment no later than one month after you have made the change. You must get the PA’s verbal agreement to any changes that you wish to make before you put that change into action and then you must follow it up with written confirmation. You might for example wish to change the number of hours or timing of the shifts your PA works. Once you have agreed this with your PA verbally you should write to them to confirm the agreed change. This would also include changing the type of contract your PA has. 5. Ending the employment contract There are lots of different reasons that your PA may end their employment with you: They resign Their fixed-term contract has come to an end You dismiss them following a disciplinary process They retire You make them redundant In most cases the end of the employment will occur because your PA resigns. However, for each of these reasons you need to consider a number of issues, including notice periods, references, calculating final pay and the need to follow proper dismissal procedures (if it is a disciplinary issue). For resignations, you should get written confirmation from your PA that they do actually intend to resign and the date of their resignation. You should then let them know the date their notice period begins (the day you accept their resignation) and their final day of employment with you (the end of the notice period). This factsheet does not go into detail on this topic however there are a number of factsheets that can help you with these topics: 5.5 Disciplinary procedures and appeals 6.1 Ending PA employment 6.2 Redundancy and notice payments 6. Breach of contract The employment contract is a legally binding agreement between you and your PA. A breach of contract happens when either you or your PA breaks one of the terms of the contract e.g. your PA fails to work the agreed hours, or you fail to pay their wages. A breach may be of a verbally agreed term, a written term, or an 'implied' term of a contract. If you think that a breach of contract, either by you or your PA, may have occurred please seek advice from your insurance provider or Independent Lives who will be able to provide you with advice specifically related to your situation. 6.1 What happens if I breach the terms of the employment contract? Normally, if your PA thinks you have breached their contract, they should raise this with you informally first so that you can seek to resolve the matter amicably as soon as possible. If you do not resolve the matter satisfactorily, they may raise the issue as a formal grievance. As a last resort, your PA could take legal action against you. If they suffer a measurable financial loss because you have not followed the agreed terms of their contract they could seek damages by making a breach of contract claim. Normally this would be made to a county or other civil court but if the employment has ended, it may be made to an employment tribunal. If they are successful, they may be awarded damages for their loss, e.g. a payment of arrears of wages, holiday pay or pay in lieu of notice. Awards for damages are usually only made if a direct financial loss has been suffered and are limited to £25,000. 6.2 What happens if my PA breaches the terms of the employment contract? Equally, if you suffer a measurable financial loss because your PA has departed from the agreed terms of their employment contract you can seek damages in the same way. You can do this either as a breach of contract claim or, if the PA has already claimed breach of contract, as a counter-claim. Legal action such as this can be extremely costly and it should usually only be considered if you have suffered a significant financial loss as a result of the breach of contract. Alternatively you may wish to consider other disciplinary action. 6.3 Constructive dismissal Constructive dismissal is a form of dismissal. If your PA is forced to resign from their job because of your behaviour, it may be considered to be constructive dismissal. The PA may then decide to make a claim for unfair dismissal to an employment tribunal which may leave you liable to pay damages. The PA’s reason for leaving the job must be serious - there must be a fundamental breach of their contract. To prove this they would have to show that: you, the employer, have committed a serious breach of contract (see below); they felt forced to leave because of that breach; and they did not do anything to suggest that they accepted the breach or a change in employment conditions. Possible examples of constructive dismissal are: a serious breach of the employment contract e.g. not paying the PA; forcing the PA to accept unreasonable changes to their conditions of employment without their agreement e.g. making the PA work night shifts when their contract is only for day work; bullying, harassment or violence against the PA; or making the PA work in dangerous conditions.