The Verdict - August 2023
Epoq Legal UK
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In no uncertain terms: why you should make sure employment contracts get signed
An employment contract doesn't always need to be signed for it to be binding. However, an unsigned contract can lead to costly misunderstandings and disputes about what exactly was agreed.
What happens if an employee doesn't sign an employment contract?
It's in your interest to get a signed contract from each employee to clearly establish the precise terms and conditions of the employment relationship.
A signed contract is evidence of the employee's agreement to these terms.
If an employee doesn't sign a contract because they're not entirely happy with it, they clearly haven't agreed to be legally bound by it.
However, if the employee doesn't sign it, but doesn't complain about it and keeps working as usual, it's likely they'll be seen to have silently agreed to be bound by it. This is especially true if they accepted benefits only available to them under the terms of the unsigned contract.
A case in point: no objection to specific term of unsigned contract
An example of this is a 2014 case where an employee was issued a new employment contract that changed both the grading of her job and her notice period from 6 months to 12 weeks.
She appealed against the new grading, but didn't object to the change in notice period, and continued to work for 9 years without signing the contract.
She was eventually dismissed with 12 weeks' notice and brought a tribunal claim for the lost notice pay.
The tribunal found that because she had continued to work under the new terms without actually protesting the revised notice period, she had accepted it.
A case in point: taking a benefit under unsigned contract
Another example is a 2012 case where an employee was given a new contract after a promotion. The contract contained a restriction that wasn't in the old contract, preventing the employee from working for a competitor for 6 months after his employment ended.
The new contract also granted him new benefits, including private medical insurance.
He didn't sign the contract, but didn't object to it and applied for private medical insurance.
He eventually left the job to work for a competitor, which breached the terms of the contract.
The court found that he had implicitly agreed to be bound by the terms of the unsigned contract from the date he applied for private medical insurance. Had he not applied for it, the employer wouldn't have been protected against him working for a competitor.
The risks of unsigned employment contracts
As these cases show, relying only on the employee's implied acceptance of the contract can lead to costly disputes and misunderstandings that can often only be resolved by court action.
Also, without a signed contract, it may be difficult to enforce important clauses that protect your business, such as:
Without these, you could lose valuable IP rights and there'll be nothing to stop the employee from competing against the company, giving confidential information to a competitor or using it themselves.
Getting an employee to sign a contract
If an employee refuses to sign their employment contract, it's important to find out why.
Set up a meeting with the employee to discuss their concerns.
You may not always be able to get the employee to sign the contract. In that case, it's important to write to them, setting out:
Significant increase in fines for businesses who employ illegal migrants
From the start of 2024, the UK government is tripling fines for businesses who allow illegal migrants to work for them.
Penalties for employing illegal workers
For a first offence, employers will be fined ￡45,000 per illegal worker, up from ￡15,000.
Repeat offenders will be fined ￡60,000 per illegal worker, up from ￡20,000.
The fines were last increased in 2014.
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The tougher fines are intended to discourage employers from engaging in this illegal practice and to deter people from attempting to enter the UK illegally.
Since the start of 2018, the government has issued almost 5,000 penalties to employers for hiring illegal workers, with a total value of ￡88.4 million.
Before the fines come into effect at the start of 2024, the Home Office will launch a consultation on options to strengthen action against licensed businesses who are employing illegal workers.
Employers should already be checking the eligibility of anyone they employ. There are a number of ways to do this. You can find more on this in both our law guide and in the guidance notes to our employment documents.
Collaboration is key: reasonable adjustments for mental health in the workplace
According to the Health & Safety Executive, almost a million workers suffered from work-related stress, depression or anxiety in 2021/22. Here, we highlight how best to help employees who are in this situation.
Mental health in the workplace
It's important for employers to treat mental health seriously and with the same care as a physical illness. You should help employees stay in work while recovering from or managing a mental health condition by making reasonable adjustments to the workplace.
Often, simple changes to an employee's working arrangements, workload or responsibilities can be enough. Remember that everyone's experience of mental illness is different. Employees are often experts on their own condition and know what support they need.
However, finding the right adjustments should be a collaborative process – think about what kind of adjustments work in your workplace, while also allowing employees to choose changes that work for them.
Reasonable adjustments
Reasonable adjustments are changes that an employer makes to remove or reduce a disadvantage related to someone's disability.
Employers must make reasonable adjustments if an employee's mental health condition is a disability under the Equality Act.
However, it's good practice to try and make adjustments for anyone who has a mental health condition or experiences stress at work.
Finding the right adjustment
This can be difficult, especially because many people find it hard to talk openly about their mental health and might be unsure of what they need to manage it.
So, don't put all the pressure on the employee to find something that works for them.
Take time to prepare yourself for a conversation with the employee and be ready to offer up examples of reasonable adjustments that might work in the employee's situation.
Think about:
Examples of reasonable adjustments
Reasonable adjustments can cover:
See the Acas guidance on reasonable adjustments for mental health for more examples.
Meeting with an employee
Once you're prepared, have an open, honest and practical conversation with the employee about how their mental health condition impacts their work and what adjustments you think will be helpful.
Ask them what reasonable adjustments they'd like to explore and why they think these will work for them.
Discuss how the reasonable adjustments will work in practice and any concerns they may have.
Explain what is and isn't possible and that you're willing to support any adjustments that are reasonable.
Once you've both agreed which reasonable adjustments to try, you should confirm them in writing.
Reviewing and monitoring
Mental health can fluctuate over time so it's important to monitor and review reasonable adjustments on an ongoing basis.
Consider arranging follow-up meetings to discuss if the adjustments are working and agree what to do next if they aren't.
* This bulletin is for general purposes and guidance only and does not constitute legal or professional advice. Its contents should not be relied or acted upon without specific advice from a licensed legal practitioner.