Contracts and Service Agreements

Employees/workers are entitled to receive written confirmation of the basic terms of their employment on day one of their employment. The information to be given to employees is contained within section 1 of the Employment Rights Act 1996 and is normally provided in one document that is often referred to as a ‘section 1 statement’.

A ‘section 1 statement’ is not a contract and is therefore not legally binding or enforceable. The information to be provided in these statements is also very basic and does not provide for what happens in the event of some common employment situations. Specialists at Hatch Brenner LLP would recommend that employers provide their employees with a formal contract instead of the section 1 statement as they can then add additional clauses to tailor the employment terms to the business’ needs. If the employee acts in breach of those terms the employer will be able to enforce the contract and seek remedy if need be.

It is important to note that contractual clauses need to be carefully drafted in order to ensure they are valid and so we would recommend seeking legal advice and/or assistance when preparing employment contracts.

The benefits of providing a section 1 statement or contract are clarity for both parties on their obligations at the outset of the employment thereby reducing the risk of a dispute in the future.

If employers do not opt to provide a formal contract then a ‘section 1 statement’ must be given as a bare minimum. A failure to provide a section 1 statement might lead to an Employment Tribunal awarding an additional 2-4 weeks’ pay where an employee succeeds in other specified claims.