Glossary of terms in Contracts of Employment (page 2)

For more senior employees, such as bar supervisors, kitchen managers, head chefs, assistant managers and managers it is common to find a requirement for them to work as many additional hours as may be required to perform their duties properly without any additional remuneration. It is important to ensure that the employer and employee understand what is expected and that the contract of employment properly reflects this. (In my experience this is usually rewarded by giving these staff members a salary, not hourly paid rates.)

See also Working Time Regulations elsewhere on the website.

Holidays: before the introduction of the Working Time Regulations 1998 (see below) employees did not have any entitlement to paid holiday. Their entitlement therefore depended entirely upon what was contractually agreed. Although the basic entitlement to annual leave is now governed by the Working Time Regulations 1998, it is still important for the contract of employment to be specific about an employee’s entitlement to holidays. Well drafted contracts will also include details of other rules connected with taking leave, including notification and approval procedures, how holiday pay is calculated, whether or not leave can be carried over to other leave years and the position on termination of employment. If an employer wishes to claw back payments from an employee who has taken in excess of his or her holiday entitlement on termination, an “express provision” is required.

Pay and benefits: some of the most common terms in a contract of employment relate to the payment of wages or salary which an employee is to receive plus any additional benefits. In the case of benefits, it is vital that the contract clearly sets out whether or not the benefits are contractual or discretionary. Whereas an employer can vary the terms relating to discretionary benefits unilaterally, any variations to the terms relating to contractual benefits must be agreed.

Restrictions: in order to protect their organisations, employers often want to place restrictions on their employees, both during employment and after employment has ended. Such restrictions may include the following:

  • a prohibition on working for a competitor during or outside working hours
  • a prohibition on soliciting business from customers of the employer for the employee’s own purposes
  • a general prohibition on acting in any way (whether deliberate, negligent, or otherwise) which harms the interests of the employer
  • a restriction on whom the employee can work for (competitors etc) after employment has ended
  • a restriction on whom the employee can deal with and/or contact after employment has ended

These types of clauses (often referred to as restrictive covenants or restraints of trade) are only enforceable to the extent that they are considered reasonable to protect the legitimate interests of the employer.

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