Working Without a Contract

As an employer, an agreement exists between you and your employees. This agreement may not be down in writing, but it’s there.

There are many reasons this could happen, particularly with the pandemic forcing most organisations to work from home.

This agreement is paramount. It can provide a livelihood for many and give employees the financial security to have a good life. This agreement helps them feel safe, improves their wellbeing and allows them to work at their best.

In this article, we’ll look at the legal implications of working without a contract and answer some of your frequently asked questions.

Is it illegal to work without a contract?

Technically, there is no requirement for an employee to have a written contract of employment. However, we would strongly recommend providing one for clarity and to protect your business. We provide contract and documentation services to assist you.

Also, you must provide a Statement of Main Terms (SMT) on the first day of employment. This differs from an employment contract but serves a similar purpose.

The statement should include the following details:

• the employee and employer name
• the start date of employment
• the date the employee’s continuous employment started
• the method, rate or scale in place for remuneration calculations
• the intervals for payment
• terms and conditions relating to working hours such as normal working hours
• holiday entitlement and details relating to public holidays and holiday pay
• sick pay and incapacity for work provisions
• details of pensions and pension schemes
• the duration of notice to be given to, or provided by, the employee to terminate employment
• job title or description of the role
• the expected duration of non-permanent work or the date upon which fixed-term work will end
• the normal place of work or address details of the employer
• details of any collective agreements which directly affect the terms and conditions of the individual
• rules and procedures relating to disciplinary (or referring to a separate accessible document where these are located) and
• identifying the person to whom to raise a grievance or appeal against a disciplinary decision.
• the terms and conditions relating to work will extend to cover terms relating to normal hours of work, days of the week the worker will be required to work and whether these days/hours may vary
• terms relating to other forms of paid leave such as family-friendly leave
• details of other employee benefits, not just those relating to pay, such as benefits in kind or financial benefits
• terms relating to probationary periods including those in relation to length and conditions
• details of training provision and requirements.

How long can you work without a contract?

When the employee accepts your job offer, they enter into a contract, whether written or verbal.

From day one, you must provide an SMT.

Is it legal to work without a contract for certain roles?

There is no legal requirement to provide a written contract for any role.

However, while working without a written contract of employment is fine for some roles, for others it would be irresponsible not to have one.

For example, senior management roles tend to come with additional benefits. They may also include terms such as the requirement for them to go on garden leave or implementing non-disclosure agreements. The more detailed a contract is, the more important it is to have in writing.

The issues with doing work without a contract

The key question that employers ask with this issue is: “is it illegal to work without a contract of employment?”

As we’ve stated previously, the answer is no, so long as you have provided a statement of main terms, and a verbal contract exists.

However, there are other issues that can arise from a lack of a written contract. Here are a few of them.

Confusion

Employees and employers alike can misinterpret or misremember certain elements of their contract. This can lead to some tough conversations further down the line if there is a disagreement on a crucial term.

Security

A verbal contract is harder to fall back on than a written one. If an employee breaches the terms of their contract, it will be much harder to prove this than if you had a written contract.

Pay & benefits

An employee must receive statutory benefits, such as minimum paid holiday entitlement when employed.

Any additional benefits they may receive will be difficult to track. This may become a problem if the employee believes they should receive certain work benefits.

Summary

We’ve focused heavily on the following question in this article:

• “Is it illegal to work without a contract in the UK?”

It’s a complex issue. It is illegal, upon accepting a job offer, an employee automatically enters into a contract with you—verbal or otherwise. Failing to provide an SMT on day one of employment is also illegal.

It isn’t illegal to fail to provide a written contract. However, we would always recommend doing so, as this provides you with extra security and clarity.

After reading more on this issue, you may want to review, update, or even write entirely new contracts. Here’s how we can help…

Expert support on contracts and documentation with Croner

Writing an employment contract doesn’t have to be complicated. There are certain terms you should always include, and others that are applicable only to your business and the role.

Our expert documentation team knows exactly what makes a contract compliant, and can pinpoint areas where they aren’t. Alongside documentation, we have a free HR advice line.

You can book a consultation with one of the team today by calling 01455 858 132.