Congratulations on the new hire. Yes, you will need a proper employment contract. The exact form depends on whether the worker is an employee or a self-employed contractor, as the legal obligations differ significantly. Assuming this is an employee, here is what you should know.
First, in the UK the law requires you to provide a written statement of employment particulars within two months of the employee starting. In practice, employers use a full contract of employment to meet this obligation and to protect their position.
The core clauses you must cover are:
• The names of employer and employee
• Job title and description
• Start date and (if applicable) any probation period
• Place of work and whether remote or hybrid working is permitted
• Hours of work, overtime, breaks, holiday entitlement and bank holidays
• Salary, payment dates, and pension arrangements
• Sick pay and absence procedures
• Notice periods for termination by either side
• Disciplinary and grievance procedures
• Confidentiality and intellectual property protection
• Restrictive covenants (if justified for your business, for example to protect clients or trade secrets)
Beyond the legal minimum, you should think strategically. If you want to avoid disputes later, be clear about overtime rates, expenses policy, bonus or commission arrangements, and whether company equipment can be used for personal purposes. For a small business, keeping the contract simple but watertight is the safest course.
You should also give the employee a copy of your staff handbook or policies (health and safety, data protection, equal opportunities, etc.) even if they are short. This avoids cluttering the contract itself with procedural detail but ensures compliance.
Would you like me to draft you a full template employment contract tailored for a UK small business, which you can then adapt to your new employee’s role? That way you will have a ready-to-use document that meets the statutory requirements and protects your interests.
