Employment contracts and what to check

An employment contract is generally read once, quickly, at a point when the person is most inclined to accept whatever it says.

The financial terms

Beyond the salary.

Pay: amount, frequency, and when reviews occur.

Bonus and commission: how they are calculated, whether they are discretionary, and what happens if you leave partway through a period — which is where large sums are lost.

Pension: contribution rates, matching structure and whether salary sacrifice applies.

Overtime: whether it is paid, at what rate, and whether it is expected unpaid.

Expenses: what is reimbursed and how.

And benefits: health cover, life cover, income protection, and whether they are taxable.

The clauses that catch people

Where the consequences are largest.

Notice periods, in both directions, which determine how quickly you can leave and how much notice you receive.

Long notice periods can make moving jobs difficult.

Probationary periods, during which notice is generally shorter and some benefits do not apply.

Restrictive covenants: non-compete, non-solicitation and non-dealing clauses restricting what you can do after leaving.

Enforceability varies by jurisdiction and several have restricted them, and they can genuinely limit your next role.

Training cost clawback, requiring repayment of training costs if you leave within a period — which can be substantial and which is frequently agreed without attention.

Intellectual property clauses, which may claim ownership of work created outside employment.

Restrictions on other work, which affect any side income.

And mobility clauses, allowing relocation.

What is not in the contract

Which matters equally.

Statutory rights apply regardless of what a contract says, and a contract cannot reduce them below the statutory minimum.

These typically cover minimum wage, working time, holiday, statutory sick pay, parental leave, discrimination protection and, after qualifying periods, unfair dismissal and redundancy.

Which means a clause purporting to remove a statutory right is generally unenforceable.

And company handbooks and policies may or may not be contractual, which affects whether they can be changed unilaterally.

The sick pay question

Which determines household resilience.

Statutory sick pay is generally modest and time-limited.

Occupational sick pay, where provided, is frequently considerably more generous and is frequently the single most valuable term in the contract.

Check the amount, the duration, whether it increases with service, and whether it is discretionary.

This is the number that determines how long a household could absorb an illness, and almost nobody knows theirs.

Redundancy terms

Worth knowing before they are needed.

Statutory redundancy pay where you qualify, generally based on age, service and pay.

Enhanced contractual redundancy pay, where provided, which may be substantially more.

Whether enhanced terms are contractual or discretionary, which determines whether they can be withdrawn.

And what happens to notice, holiday and benefits.

Negotiating terms

Which is possible and rarely attempted.

The point of maximum leverage is before accepting, since the employer has chosen you and has not yet started the process again.

Terms that are frequently negotiable: start date, notice period, probationary length, holiday, flexible or remote working, training budget, and review timing.

Restrictive covenants can sometimes be narrowed.

Training clawback terms can sometimes be limited.

And getting any variation in writing before starting is essential, since verbal assurances are difficult to enforce.

Changes during employment

Where rights apply.

Employers generally cannot unilaterally change contractual terms without agreement, and attempting to do so has legal consequences in many jurisdictions.

Consultation requirements apply to certain changes.

Which means being asked to sign a new contract is a decision rather than an administrative formality, and taking advice before signing is reasonable.

Continuous service accrues rights and is preserved through certain business transfers, which is worth knowing during reorganisations.

Where to get advice

Practically.

Unions, which provide contract review and representation to members and which is one of the more valuable membership benefits.

Employment advice services, frequently free.

Solicitors offering fixed-fee contract reviews.

Professional bodies in some sectors.

And note that independent advice is generally a legal requirement for a settlement agreement to be binding, and the employer usually pays for it.

General information only, not legal or employment advice. Employment law varies enormously by country — consult a union, employment adviser or solicitor before signing.