Drafting Employment Contracts under English Law

An employment contract governs the relationship between an employer and an employee. It records the principal terms of employment, defines the parties’ rights and responsibilities and provides a framework for managing the employment relationship from appointment through to termination.

Although an employment contract does not necessarily have to be contained in a single written document, employers are required to provide employees and workers with prescribed written information about their employment. A carefully drafted contract offers substantially greater protection and clarity than a basic statement of terms, particularly for senior employees, directors and employees with access to confidential information, clients or commercially sensitive assets.

Our London office assists UK and international employers with preparing employment contracts governed by English law.

The legal framework

Employment contracts are governed by general contractual principles, statutory employment protections and terms implied by law. Relevant legislation regulates matters including written employment particulars, pay, working time, holidays, family-related leave, pensions, discrimination, sickness, notice and termination.

The principal written statement of employment particulars must generally be provided to an employee or worker on or before their first day of work. Further prescribed information may be provided separately within the applicable statutory period.

The required particulars include matters such as:

• the parties’ names and the employment start date;
• job title or description;
• pay and payment intervals;
• working hours and days;
• holiday entitlement;
• place of work and mobility requirements;
• probationary arrangements;
• benefits and obligatory training;
• sickness and other paid-leave provisions;
• notice periods;
• pension arrangements; and
• disciplinary and grievance procedures.

The written statement is not necessarily the entire employment contract. Contractual terms may also arise from offer letters, workplace policies, collective agreements, oral discussions, established practices and duties implied by law.

The drafting process

Our work begins with understanding the employer’s business, the employee’s proposed role and the practical arrangements governing the employment.

The process may include:

1. Confirming employment status and determining whether the individual is an employee, worker, office-holder or independent contractor;
2. Reviewing the role and responsibilities, including reporting lines, authority and performance expectations;
3. Defining remuneration and benefits, including salary, bonuses, commission, pensions and expenses;
4. Establishing working arrangements, including hours, workplace attendance, remote working, mobility and overseas duties;
5. Addressing probation, sickness, leave and training;
6. Protecting confidential information, intellectual property and business relationships;
7. Drafting notice, suspension and termination provisions;
8. Considering post-termination restrictions, where proportionate and appropriate for the individual’s role; and
9. Coordinating the contract with workplace policies and internal procedures.

Particular care is required when drafting bonus provisions, intellectual-property clauses, confidentiality obligations, garden-leave provisions and restrictive covenants. Restrictions imposed after termination must be carefully tailored to protect a legitimate business interest and should not extend further than reasonably necessary.

Senior executives and internationally mobile employees

Senior employees and directors may require more detailed agreements covering fiduciary or statutory duties, governance responsibilities, decision-making authority, share incentives, conflicts of interest, directorships, regulatory responsibilities and termination payments.

Additional provisions may be necessary where an employee will work outside the UK, relocate between jurisdictions or divide their working time between countries. Immigration, tax, social-security, data-protection and local employment-law considerations may also arise.

How we can assist

We prepare tailored employment contracts for permanent, fixed-term, part-time, hybrid-working, remote, senior and internationally mobile employees. We can also review and update existing templates to reflect legislative changes, developing working practices and the employer’s operational requirements.

Our assistance may include drafting service agreements for directors, consultancy agreements, offer letters, bonus arrangements, confidentiality agreements and employment-related policies. We can also support employers when varying contractual terms or introducing new arrangements across their workforce.

Our multilingual team provides assistance in English, Hungarian, German, Spanish, Russian and Turkish, enabling us to assist overseas businesses employing personnel in England and Wales and international groups coordinating employment arrangements across multiple jurisdictions.

A properly drafted employment contract can clarify expectations, protect commercially sensitive interests and reduce the risk of future disputes.