UK employers must carefully manage employment contracts, flexible working arrangements, and employee rights within a robust legal framework. This guide explains what needs to be included in employment contracts, how to approach changes to terms, the implications of flexible working rights, and how to navigate disputes effectively. It’s designed to support employers in staying compliant and maintaining productive, fair relationships with their workforce.
Written employment terms: legal requirements
Every employee must receive a written statement of employment particulars no later than their first day of work. This legal requirement, introduced under the Employment Rights Act 1996, ensures that core terms are clear from the outset. While it isn’t a full employment contract, it plays a crucial role in setting expectations.
This statement must include details such as job title, start date, working hours, holiday entitlement, and pay. It comes in two parts: the principal statement provided on day one, and the wider written statement, which follows within two months.
What should be in an employment contract?
A well-drafted contract provides clarity and legal protection for both employer and employee. At a minimum, it should include:
A defined job title and description
Salary and payment frequency
Working hours and any shift patterns
Holiday entitlement (including the statutory 5.6 weeks)
Terms for any probationary period
Notice periods for resignation or termination
Confidentiality provisions
Reference to the company’s disciplinary and grievance procedures
In addition to these express terms, all contracts also carry implied obligations (such as mutual trust) and statutory rights (such as minimum notice and holiday entitlements).
Types of employment terms
Terms fall into three categories:
Express terms, which are explicitly agreed upon, usually in writing.
Implied terms, such as the duty of mutual trust or the expectation to act in good faith.
Statutory terms, which are imposed by law and override any conflicting agreement.
Employers should review contracts regularly to ensure all three categories are respected.
Managing contract changes: variation & flexibility
Changing employment terms can be complex. Ideally, such changes are made by mutual agreement following consultation. If the contract contains a flexibility clause (also called a variation clause), employers may be able to implement specific changes without further consent — but only if the clause is clearly worded and exercised fairly.
Changes should always be discussed with employees, even where the contract permits unilateral action. For major revisions, a consultation process that explains the rationale and allows employee feedback is essential. Once agreed, the new terms must be documented and issued within one month.
If no agreement is reached, employers face several choices — continuing negotiation, offering incentives, or as a last resort, dismissal and re-engagement.
Fixed-term and zero-hours contracts
Fixed-term contracts automatically expire unless renewed. Employers should provide advance notice and clarify whether the role will continue. If extended or made permanent, a new or updated contract should be issued.
Zero-hours contracts remain legal and offer flexibility for both parties. However, workers must not be subject to exclusivity clauses, and they retain rights such as the national minimum wage and paid annual leave.
Flexible working: new rights from day one
As of April 2024, all employees have the statutory right to request flexible working from their first day of employment. Requests can include changes to working hours, location, or patterns — and employees may make up to two requests per year.
Employees must submit a written request outlining the change they seek and the proposed start date. While they no longer need to explain how the change benefits the employer, providing context may help the discussion.
Employers must respond within two months and can only reject requests for specific business reasons, such as cost, customer impact, or inability to reorganise work. If a request is mishandled or refused unfairly, employees may raise grievances or bring tribunal claims — particularly if there’s a link to discrimination.
Employee rights and duties
Duty of Care
Employers are legally required to safeguard their employees' health and safety under both common law and the Health and Safety at Work Act 1974. This includes maintaining a safe workplace, conducting risk assessments, and responding to hazards.
Duty of Trust and Confidence
This implied term prohibits behaviour that would undermine the working relationship — such as unfair treatment or unjustified disciplinary action. Breaches can lead to claims of constructive dismissal.
Duty of Fidelity
Employees must act in their employer’s best interests. This includes avoiding conflicts of interest, protecting confidential information, and not soliciting clients or staff. Employers can reinforce this duty with restrictive covenants, provided they’re reasonable.
Handling contractual disputes
Unilateral changes to contracts carry substantial risks — including breach of contract, constructive dismissal, and claims under the Equality Act if the change disproportionately affects protected groups.
Where agreement can’t be reached, employers may:
Continue consulting and negotiating
Offer incentives or compromise terms
As a last resort, consider dismissal and re-engagement
This “fire and rehire” approach is lawful but controversial. It should only be used after all alternatives have been explored and with full consultation. A poorly handled process may result in unfair dismissal claims and increased compensation if the ACAS Code of Practice isn’t followed.
Collective consultation: when required
If changes affect 20 or more employees within a 90-day period, collective consultation obligations apply. This requires employers to consult recognised trade unions or elected employee representatives, share the reasons for proposed changes, and explore alternatives.
Failure to follow this process may lead to protective awards of up to 90 days’ pay per affected employee.
Health and Safety Detriment
Employees must not suffer detriment (such as dismissal, demotion, or disciplinary action) for:
Raising health and safety concerns
Refusing to perform tasks posing serious and imminent danger
Tribunals can award financial compensation and damages for injury to feelings where such protections are breached.
Exclusivity Clauses: When They Are and Aren’t Enforceable
Exclusivity clauses prevent employees from taking on work with other employers. Since 2015, such clauses have been banned for zero-hours contracts and, as of 2022, for workers earning below the Lower Earnings Limit (£123/week).
For all others, exclusivity clauses must be:
Clearly drafted
Proportionate and justified
Discussed openly where employees seek secondary work
Employers should review these clauses periodically to ensure compliance with evolving law.
