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A Guide to Employment Contract Clauses

Sep 3, 2008
Employment contracts are some of the most important UK business documents you will ever sign in your working life, and yet they are written in a deliberately convoluted and confusing manner, which often makes it difficult to get the clear points of what you're signing up for. Take your time, and read and re-read every contract, but pay special attention to the clauses, to ensure you understand them. Employers can put some unreasonable bits in here, so it pays to know what each one means. Here are some of the more common employment contract clauses so you know what to look for. And managers: if you want these points enforced, be sure to include them in your UK business documents!

Changes in Circumstances and Personal Information

This common employment contract clause forces all employees to inform the employer when their personal circumstances change. This may be accompanied by a list of circumstances covered by the rule.

Dress Code for Uniforms

If employees are required to wear a uniform, this can be used to enforce how they should be worn. This can include stipulations regarding cleanliness and how they physically are to be worn - though it has to be subject to religious or personal circumstances which can prevent employees from complying.

Gardening Leave

This employment contract clause means that employers can make employees who have handed in their notice, or been dismissed serve out the remainder of their time at home. They will be on full pay, but with the advantage to the company that they are held to the contractual agreements (e.g: confidentiality and exclusivity clauses still remain) and are available to be called back to work at short notice.

Office Conduct/Dress Code

Sometimes, the employer will outline exactly the kind of conduct and dress code they expect when employees are in the office - this would go here.

Office Relationships

If the employer chooses, inter-office romantic or sexual relationships can be discouraged here. This is especially common when involving two employees of different seniority for the conflict of interest it would create. This clause in a contract should then detail what action will be taken in instances where the rule is broken. Possibilities include re-deployment or firing of one of the employees.

Restrictive Covenants

There are a number of different restrictive covenants that can be enforced, and largely relate to restricting the employee's competition to his/her employer when he/she leaves. This can include area-covenants, which prevent employees working for competitors, non-solicitation covenants which prevents the poaching of clients from the former employer and non-solicitation of staff covenants, which prevent the former employee dealing with his/her former fellow employees for a defined time after termination of employment.

Restrictions on Outside Employment

This is one of the more common employment contract clauses. It usually prevents employees taking on any additional work during their agreed hours of employment, and requires written permission from the employer for work outside the agreed hours. This is generally backed up by a note that permission will not be granted for work that competes with the employer's business or that which will affect the employee's work performance.

Rights to Intellectual Property

This contract clause can be used to ensure employees involved in creative production waive any right to intellectual property, and clarifies that the employer owns any copyright or other IP right. This can be open to interpretation, so should be accompanied by a definition of what the employer classes as intellectual property

Use of Protective Clothing

This won't apply to the majority of offices, but this contract clause is designed to ensure that protective clothing and equipment is worn to comply with health and safety regulations. This section may also outline the possible disciplinary action to be taken in the even of a breach.

Keep an eye on these employment contract clauses, and feel free to seek legal advice if you don't understand the practical application of any part of your UK business documents. It's too important to get wrong!
About the Author
Iain Mackintosh is the managing director of Simply-Docs. The firm provides over 1100 UK business contracts covering all aspects of business from holiday entitlement to non-disclosure agreements. By providing these legal documents (with content provided by leading commercial lawyers, HR and health & safety consultants) at an affordable price, the company intends to help small businesses avoid costly breaches of regulation and legal action.
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