Fewer than half of all new employees read the small print before signing on the dotted line to accept a job. Even 27% of lawyers don't properly check their own employment contracts! Many people assume that it'll all be fairly standard wording and if there were any issues with the company's contracts then surely a past or current employee would have kicked up a fuss and we'd have all heard about it, right? But there is no boilerplate for an employment contract and, quite often, there will be differences between contracts within the same organisation (depending on role and seniority) - plus your contract will contain all the finer details about your pension, holiday, sick pay, benefits, etc. so it's pretty important you've read and understood the details. If you're not happy with any part of it (or you think it's open to interpretation), then you should seek clarity before you sign.
We think these are the five most important things to check in your employment contract.
1. Job title and description
You will want to make sure that your contract reflects the role you believe you have been offered, both nominally and narratively. Your job title might not seem something to quibble over, but it's important for representing yourself to colleagues, external parties and future employers. Not all contracts feature a description, but if yours does - make sure it's not too limited or too general. A very broad description can give your employer the leeway to add things to your workload that you haven't discussed or expected, or to move the goalposts for progression and recognition. Your objective is to feel comfortable that this is indeed the role you believe you have been offered, and that there is nothing in the title or description that will be limiting to you.
2. Salary, benefits and bonuses
Make sure the salary on your contract is the one you negotiated! Also double check how and when you will be paid. Your contract should contain the details for the provision and payment of other agreed remuneration like pension, car, private health care, equity or share options, expenses, bonuses and commission structures. A quick note on bonuses - these can be guaranteed or discretionary; if yours are based on performance, make sure it's very clear what objectives or targets need to be met in order to secure them. If your contract refers to separate policies on any of these items, you are perfectly entitled to request a copy of these documents before you sign.
3. Hours and location of work
Firstly, you'll want to double check that the hours in the contract are what you are expecting to work, and then you need to be totally happy that you're willing to accept them. Check the policy on overtime too, and look for the ominous 'will be expected to work the necessary hours to complete the tasks assigned' clause. Sometimes this means your employer will expect early starts and late finishes as standard, without remuneration - if you're not up for that and your contract says something along these lines, you might want to seek clarification or reassurance (ideally in writing). Then make sure the office location/s and description of travel and overnight or overseas trips matches your expectations. Your rights to a redundancy payment could be adversely affected if you refuse to work in a new location, having previously agreed in your contract to do so. Lastly, take a quick look at the start date (and end date, if applicable) to check they're correct, and double check the terms of your notice period.
4. Holidays, sick leave and death in service
You'll want to check the holiday entitlement, when it runs from and to, and if you can roll over any hours to the next year. Your contract should also tell you if there are any restrictions around holidays - for example, some companies insist on hours being saved and used between Christmas and New Year, or they might not permit holidays at certain times of the year. Most companies will have a cap on the number of hours you can take off at one time, and many will insist annual leave hours are spread across the year with time taken off in each quarter. Sick leave is usually subject to local law, but the process of informing your employer will often be in your contract. Sick leave may also impact other areas of your agreement, such as termination, working hours and notice period. A death in service policy might not seem a big consideration for many, but it's useful to pass this information on to a partner or dependent just in case anything should happen. It might also help you to better plan your family finances or insurance policies.
5. Restrictive clauses and covenants
This is a big one! It's easy to brush over these boring legalese sections, but they're the most likely to trip you up further down the line if you're not au fait with the content. You need to carefully read the details of any policies, restrictive clauses and rights (around competition, confidentiality and intellectual property) that might be stated. Restrictive clauses often take effect after the termination of employment and are important for employers because they protect the business, its clients, and other employees. You just need to make sure they aren't likely to negatively impact any future job opportunities - for example, your company may prohibit you from working with or for a competitor for a certain amount of time after you leave. Many of these are industry standard clauses, but don't assume this is the case and make sure you've read the finer details.
If you're not happy with any part of your contract, or something doesn't make sense, your new employer should be happy to discuss and offer amendments or clarification. If you've secured the job offer through us, we'll always be happy to answer questions on the terms of your employment or point you in the right direction for further advice if necessary.
And if you're still on the lookout for a new role, or your company is recruiting and would like us to use our talent seeking super powers, you can reach us on 01932 355000 or at firstname.lastname@example.org. You can also find lots of other helpful articles on our blog, and see what other people have to say about working with us too.