What about zero-hour contracts?
You have to be careful about the wording of zero-hour contracts, in fact, it’s worth considering whether a zero-hour contract is even relevant to your business model!
Having an employee on a zero-hour basis is not an excuse to use a generic contract template. It’s time to reflect on custom and practise- if your employee signed a zero-hour contract, does it really document the arrangement you have?
If an employer expects someone to fulfil a consistent hourly obligation to the company, it’s got to work both ways — that commitment’s got to be reflected in the contract.
Having a contract helps you manage sickness absence
Having a well-written contract will not only protect you from disputes, but it can also help you manage sickness absences if you suspect someone’s taking advantage.
It is worth saying that contracts and clause should not be used to police absences related to mental health! Always be on the side of the employee when it comes to issues related to mental health.
You can always do this via disciplinary for lack of confidence, but it’s much easier to have a clause in the contract so you don’t have to keep paying sick leave when it’s not justified. This might come into play in a scenario like this one:
Terence works as a delivery driver for a white goods company. His work involves a lot of heavy lifting and physical labour. Terence decides to spend his weekend racing dirt bikes and trying to do a wheelie. Unfortunately, he falls off his bike and breaks his arm.
Terence expects full sickness leave, but the employer sees it as an invalid sickness claim. After all, he engaged in a dangerous activity, knowing the risk it can pose to his ability to work.
In this case, the employer may be able to challenge Terrence’s claim, but it wouldn’t be easy. Having a clause like "we reserve the right not to pay if we suspect it’s fabrication or self-inflicted" in the contract makes it a lot more straightforward.
Plus, your employees are made explicitly aware of the situation. Maybe if Terrence knew he may not be entitled to sick pay if he puts himself at severe risk of physical injury, he would have chosen a different hobby.
Here’s an example to show you what I mean:
Tim, who owns a factory business, uses a generic templated contract for all of his employees. In the contract, it states that working hours are 9:00 am to 5:00 pm, but in reality, folks show up at 7:00 am and leave at 3:00 pm.
If this situation were to escalate to a formal dispute, it is the actual working conditions of the factory (custom and practice) that will be given more weight — regardless of what was outlined in the contract. By looking carefully at your contracts, you can ensure your terms and conditions reflect actual custom and practise. You get to avoid any costly disputes and your employees have a stronger understanding of their role.
Deductions in the case of losses or damages
Another thing to consider when writing a contract is being clear about cases when the employee can be liable to pay for the damages they’ve caused.
You can only deduct losses or damages from an employee’s income if there’s a clause in the contract explicitly saying you can.
Here’s another small case study:
Clauses like this can help protect you in the event of an employee not holding up their end of a bargain. If you offered to pay for an employee to undertake some training under the proviso they repay you if they leave within 3 months, they wouldn’t legally have to honour that agreement unless it was in their contract.
Sometimes such deductions can be difficult to enforce, however, there are two instances where you can make deductions without a clause in the contract, that is overpayment of wages and overpayment of annual leave.
Delia has worked for the same company for 7 years. Despite being on a zero-hour contract, she’s worked the same days and hours every week. After getting into a dispute with her manager, Delia receives a text from the manager saying “Zero hours for you now, for the foreseeable future”. Delia takes her case to tribunal and wins because she can prove she has worked the same hours and days for the past 7 years. Delia might be a zero-hour employee on paper, but in practice, she had fixed work time and had a right to be compensated for unfair dismissal.
It’s up to the employer to have t’s and c’s in place. If you do, you can protect your business and ensure employees understand their responsibilities.
This is a first draft of a blog post for an HR consulting firm Humanity HR. I wrote it as a subcontractor of a freelance copywriter who has been writing copy and blog posts for the firm’s website.
How “custom and practice” can impact your business
Using a contract to tackle restrictive covenants
Well-written contracts can help define terms and conditions that are overwise too broad — namely, restrictive covenants. Usually found in financial services contracts, restrictive covenants allow employers to ensure ex-employees can’t use their knowledge or client base to work with competitors. Issues with restrictive covenants typically crop up after the employee already left the company. While they can help the company to protect their business, the terms have to be reasonable and can’t prevent someone from making a living. An unreasonable clause would be telling a plumber that they can’t do any plumbing work in the UK for a year. However, a clause that prohibits the ex-employee from working with existing clients they gained while working for the business and doing work within a 25-mile radius is reasonable.
How contracts can save you business trouble
Having a clear and reasonable restrictive covenant in place helps protect your business. And as with all contract t’s and c’s, it will give prospective employees the chance to consider and consent to your company’s terms.
Need help with writing your new contract?
A critical aspect of a contract is that it must reflect the actual terms and conditions of an employee’s job, otherwise “custom and practice” will come into play. The whole purpose of a contract is to define the intent of relationships and terms that you’re working under. If there is a discrepancy between what is outlined in the contract and the employee’s work conditions, it opens a door for disputes.
As you can see from this piece and my previous two blog posts, a well-written and carefully considered contract is absolutely essential. While they are a legal requirement, they’re also a mitigator of risk. By standardising terms and conditions, you make sure everyone knows where they stand.
The best way to prevent issues is to get a great template contract for your employees and subcontractors, and use it going forward. For £375 + VAT I can provide you with an employee contract and handbook- written bespoke to your business. Get in touch today if this is something you think you’ll benefit from. Be proactive and protect your business and the people who make it what is- chat to me about your contract concerns today.
Having a well-written employment contract can be a game-changer when it comes to any tribunal disputes. If there are any terms and conditions that aren’t outlined in the contract, you leave yourself open to potential legal disagreements. It is essential that both the employer and the employee must know and understand the terms of their contract, which would benefit both of them.
This hasn’t been a problem until Tim wants to enforce the 9 to 5 clause in their employee’s contract. However, the employees can prove that they had this arrangement for years.
