Contract Types: everything you need to know about employment contracts

There is a contract between you and your employer if you are hired. Even if you don't have anything written down, you still have a contract. This is because a contract is formed when you agree to work for your employer and your employer agrees to pay you for your labour.

To guarantee that resources are handled efficiently and effectively, HR teams must identify the most appropriate contract of employment types while taking into account the duration and cost of the employment contract.

The tax and employment duties you have as an employer will be determined by the sort of contract you provide your employees and their employment status.

What are employment contracts?
All of the rights, obligations, duties, and employment conditions that make up the legal relationship between an employer and an employee are contained in an employment contract. It contains a number of words that are legally obligatory whether or not they are written down.

Depending on the individual's job position, several types of contracts apply. So, before you write an employment contract, be sure you've accurately identified the employment status of the individual you're employing.

What are some of the most common employment contract types?
There are many different types of employment contracts available in the UK.

The following are examples of contract types:
  • Fixed-term contracts;
  • Full-time contracts;
  • Agency staff;
  • Self-employed;
  • Zero-hour contracts.

In the next sections, we'll go through various contract kinds in further depth.

Fixed-Term contracts
Employees on fixed-term contracts should be considered the same as full-time permanent employees in the United Kingdom.

A fixed-term contract establishes a relationship between the employee and the employer for a predetermined amount of time. This sort of job may also come to an end when a certain task is finished or a specific event occurs.

If a person has worked on a fixed-term contract for more than two years, they are entitled to the same redundancy benefits as a full-time permanent employee.

Full-time contracts
In the United Kingdom, the most frequent type of employment contract is a permanent employee contract also known as a full-time contract.

Employers must provide a written statement of employment or agreement to their employees, which must provide at least a statutory minimum of paid vacation time. The terms of work, including rights, conditions, obligations, and tasks, should be included in a contract.

Both the employer and the employee have the right to end the contract by giving notice or dismissing an employee.

Agency Staff
As an employer, you can recruit temporary employees from a staffing agency to satisfy an immediate need or a temporary spike in demand for your product or services, such as during the holiday season.

Employers should submit information about their company terms and conditions to the agency so that they may supply terms to the worker.

After 12 weeks, temporary agency workers should be treated the same as permanent employees.

Self-employed person isn't hired by the company they work for; instead, they work for themselves and are responsible for the success or failure of their own company.

When an organisation interacts with a self-employed person on a regular basis, they can be classified as self-employed since they are totally responsible for defining their job activities.

They will most likely utilise their own equipment or assets, and they will have complete control over what job they perform and when they do it.

A zero-hours contract between an employer and an employee is a sort of employment contract. It basically implies that you, as an employer, are not obligated to provide certain working hours to an employee.

Your employee is also free to work for other employers and is not obligated to take any employment that you give them.

If you want a flexible workforce that can temporarily address any personnel shortages, you may hire people on a zero-hours contract basis.

Are there any legal ramifications if you neglect to give an employee an employment contract?
An employment contract kicks in as soon as someone starts working for you, therefore it exists regardless of any paperwork.

A formal declaration outlining the essential terms that have been agreed upon, such as compensation and working hours, is required by law for all employees engaged for more than a month.

If you do not produce the statement within two months of their start date, an employee may apply to an employment tribunal and seek a declaration of the conditions, as well as compensation of 2-4 weeks' salary.

We hope that you now have a better grasp of the many forms of employment contracts available, and if you need assistance deciding which sort of employment contract is best for your employees, please get guidance from an expert.

For more information on how we can help your business, please contact Persona Finance at [].