Last reviewed 29 August 2026
The first hire changes a company's legal profile. From the first day of employment you owe statutory duties on written particulars, pay, working time, pensions auto-enrolment, discrimination and health and safety, and you take on liability for what your employee does in the course of their work.
Most of that is straightforward to manage with a properly drafted contract and a small set of policies. The problems arise when a business uses a template found online, misclassifies a contractor as self-employed, or omits the clauses that protect confidential information and IP.
This guide covers what a UK employment contract must contain, what it should contain, and the traps for first-time employers.
The written statement of particulars
Since April 2020, employers must provide a written statement of employment particulars on or before the first day of employment, and the right extends to workers as well as employees. It must include names, start date, pay and pay intervals, hours and working patterns, holiday entitlement, place of work, job title or description, probation terms, training entitlements, benefits, notice periods and any period of work outside the UK.
Failure to provide it can lead to a compensation award of two or four weeks' pay where an employee succeeds in another tribunal claim. It is a low-cost obligation with an avoidable penalty.
Probation, notice and termination
Probationary periods are contractual rather than statutory. Three to six months with a shorter notice period during probation is typical, along with a right to extend. Remember that statutory minimum notice of one week applies after one month's service.
Ordinary unfair dismissal protection generally requires two years' continuous service, but claims for automatically unfair dismissal and discrimination have no qualifying period. Probation is not a licence to dismiss without process; follow a fair procedure regardless of length of service.
Confidentiality, IP and restrictive covenants
Include an express confidentiality clause covering trade secrets, technical information, customer data and commercial strategy, both during and after employment. Add an IP assignment covering present and future works and a waiver of moral rights — the statutory default for employee copyright is helpful but incomplete.
Post-termination restrictive covenants — non-compete, non-solicitation of clients, non-dealing and non-poaching of staff — are void as restraints of trade unless they protect a legitimate business interest and go no further than reasonably necessary. Tailor duration and scope to the individual's role; identical twelve-month non-competes across an entire workforce are routinely unenforceable.
Employee, worker or contractor?
Status determines rights and tax treatment. Employees have the full set of protections; workers get holiday pay, national minimum wage and working time protections but not unfair dismissal; genuinely self-employed contractors get very little.
Status is determined by the reality of the relationship — control, personal service, mutuality of obligation and integration — not by the label on the document. Misclassification exposes the business to back-dated holiday pay, national insurance and tribunal claims, and IR35 rules may place the determination obligation on the client for contractors engaged through their own companies.
Pay, pensions and working time
Check national minimum and living wage rates apply correctly, including for time spent training or on call. Auto-enrolment duties begin as soon as you employ your first eligible worker: you must assess staff, enrol those who qualify, pay contributions and complete a declaration of compliance with the Pensions Regulator.
Working time rules cap the average working week at 48 hours unless the individual opts out in writing, and require minimum rest breaks and daily and weekly rest. Holiday entitlement is 5.6 weeks including bank holidays, and holiday pay for variable-hours staff must reflect normal remuneration.
Policies worth having from day one
A short staff handbook, expressly non-contractual, is enough at first: disciplinary and grievance procedures aligned to the Acas Code, equality and anti-harassment, sickness absence, data protection for staff, IT and acceptable use, and expenses.
The Acas Code matters practically — an unreasonable failure to follow it can increase a tribunal award by up to 25%. Employers also now have a proactive duty to take reasonable steps to prevent sexual harassment of employees, so a written policy and training are part of the baseline rather than a nice-to-have.
Key points
- A written statement of particulars is due on or before the first day of employment.
- Statutory notice of at least one week applies after a month's service, regardless of probation.
- Restrictive covenants must be tailored to the role or they will not be enforceable.
- Employment status depends on the reality of the relationship, not the contract label.
- Pension auto-enrolment duties begin with your first eligible worker.
- Follow the Acas Code — unreasonable failure can increase awards by up to 25%.
Frequently asked questions
- Can I use the same contract for everyone?
- A common template is fine for standard terms, but restrictive covenants, notice periods and bonus arrangements should reflect seniority and access to confidential information. One-size covenants tend to be struck out.
- Do I need employers' liability insurance?
- Yes, in almost all cases where you employ staff, with a minimum level of cover required by law and penalties for failing to hold it. Check the position for close-company director-only arrangements.
- Are non-compete clauses enforceable in the UK?
- They can be, if they protect a legitimate interest such as confidential information or client connections and go no further than necessary in duration, geography and scope. Short, well-targeted restrictions are far more likely to hold than broad ones.
- What is the difference between a contract and a handbook?
- The contract sets binding terms; the handbook sets out procedures and expectations and is usually stated to be non-contractual so it can be updated without consent. Keep disciplinary and grievance procedures non-contractual for that reason.