Contract types


Caroline Carter and Daisy Jones, Ashurst Last Modified  10 June 2013

A contract of employment is a legally binding agreement between an employer and an employee. It is formed when the employee accepts an offer of employment from the employer. The contract may be oral, in writing, or a combination of the two, though some aspects of the contract must be written down.

Key points

  • The terms of an employment contract will vary depending on the type of role which the employer is looking to fill.
  • Like all contracts, there are specific requirements relating to its construction which must be satisfied in order for a valid contract of employment to be formed.
  • All employees must receive a written statement of initial employment particulars no later than two months after the start of their employment.
  • A contract of employment consists of both implied and express terms.
  • Many organisations have a number of rules that determine how the employment relationship should be conducted. Some rules can be expressly incorporated into a contract of employment.
  • Terms can also become incorporated into the contract of employment through custom and practice, as well as additional terms which result from obligations placed on both employer and employee by common law and statute.
  • The employer may restrict the activities of the employee either during employment or for a specific period of time after the employee has left employment using a restrictive covenant.
  • Where either the employer or employee seeks to vary (change the terms of) the contract of employment during the life of the contract, this should be carried out with the consent (whether express or implied) of the employer or employee.