Employment contract basics for growing UK businesses

Why a written statement matters from day one

Once you take on your first employee, the paperwork starts immediately. Since April 2020, you must give every new employee and worker a written statement of particulars on or before their first day of work. It is not quite the same thing as a full contract, although the two often sit in the same document: the statement is the statutory minimum, while a contract can add more. Getting it right protects you as much as your team. When everyone knows where they stand on pay, hours and duties, small disagreements stay small and manageable.

The details your written statement must include

Think of this as the core set of facts about the job. Most of it fits into two or three clear pages.

• Parties and dates — legal names of employer and employee, the date employment began, and whether earlier work counts towards continuous service.
• Job title and duties — a short description of the role. A phrase such as "and any other duties reasonably required" gives flexibility without being unfair.
• Place of work — the main location, plus whether travel between sites or home working is expected.
• Pay — the rate, how it is calculated and how often it is paid. The National Living Wage and National Minimum Wage set a floor no contract can go below.
• Hours — normal working hours, days, overtime arrangements, and whether the role is full-time, part-time, fixed-term or casual.
• Holiday — entitlement, how it accrues, whether bank holidays are included, and how holiday pay is worked out.
• Sickness and absence — sick pay arrangements and notification rules, including whether you offer more than the statutory minimum.
• Notice and probation — what each side must give, and how long any probation period lasts.
• Pension — confirmation of automatic enrolment, or the right to opt in.
• Other terms — training requirements, confidentiality, and any collective agreements that apply.

Probation periods: set them up properly

A probation period is a useful tool, but it has no automatic legal status. Write it into the statement with a clear length — three to six months is typical — and a clear purpose: reviewing performance, training and fit before confirming the role. If you may need to extend it, say so in the wording. Statutory notice and other basic rights still apply during probation, even though you can usually agree a shorter notice period for that stage.

Notice, holiday and sick pay in practice

The statutory minimum notice an employer must give grows with service: one week once someone has been employed for a month, rising by a week for each complete year, up to twelve weeks. Employees must give at least one week's notice once they have been employed for a month, unless the contract says otherwise. You are free to offer more generous terms, and plenty of small businesses do as a retention tool.

On holiday, almost all workers are entitled to 5.6 weeks of paid leave a year, which can include bank holidays. Part-time staff get the same entitlement pro rata, and holiday pay should reflect normal remuneration rather than basic pay alone for most staff. For sickness, statutory sick pay applies once the qualifying conditions are met, though you can choose to pay more. Whatever you decide, write it down and apply it consistently.

Common pitfalls to avoid

• Leaving the written statement until the end of the first week — it must be in place by day one.
• Reusing a template from another sector without checking that the hours, pay and holiday clauses match the actual job.
• Relying on verbal agreements. If something changes, update the statement, usually within one month of the change.
• Forgetting to review documents as the business grows. Roles evolve, and contracts should evolve with them.
• Assuming casual or zero-hours staff can be treated differently. They still need a written statement and the same core protections.

Building a contract that grows with you

Start with the statutory basics, keep the language plain, and review your templates once a year. A well-drafted contract is not about tying people down; it is about removing ambiguity so you and your team can get on with the work. If a role is unusual — commission-heavy, heavily regulated, or reliant on overseas travel — it is worth paying for a short review by an employment law specialist. For most small employers, a clear two- or three-page document, consistently applied, is a solid foundation for the years of growth ahead.