Employment lawyer LOUISE LAWRENCE shares her top tips for signing contracts of employment
Probationary period
THIS CAN have benefits for both parties as if you end up not liking your new role you can quickly move on. However, it can be disenchanting to see that your employment can be terminated on short notice, too. Consider asking for the probationary period to be removed or the notice period extended to give you some financial confidence.
Salary
Don’t be afraid to ask for more than was originally suggested. Check when your salary will be reviewed and what the process is in relation to this.
Bonus
Sign-on bonuses often contain repayment provisions if you leave within a certain period; check what these are and whether there is a sliding scale of repayment relating to how long you stay with the business. This would be more reasonable than you having to repay the whole amount. Also check whether there is a distinction between what is generally known as being a “good leaver” (redundancy or ill-health).
For performance bonuses find out what criteria must be met and obtain as much clarity (in writing) as possible. What level of bonuses have been paid out to the team in the past three years? Will the bonus be paid partly in cash and partly in stock? What rules apply to stock?
You may also want to negotiate a guaranteed bonus for the first year. Businesses usually set out that a bonus will not be paid if your employment is terminated, or you are under notice before bonuses are paid — but see if there can be a distinction between leaving scenarios.
Benefits
Employers are focusing on what benefits they can offer to employees in the war for talent. Find out what benefits you will be eligible for, and in particular whether private medical insurance, critical illness insurance and death-in-service benefits are provided. Most employees have the right to be automatically enrolled into a pension scheme by their employer. The minimum pension contributions for eligible employees are five percent by the employee and three percent by the employer, so check these contributions will be covered.
Flexibility
Do you have flexibility regarding where you can work, what times you can work, and how you work? Are there different rules depending on seniority? If the business offers remote working, find out if this is a temporary arrangement or permanent.
Holiday
You are entitled to a minimum of 28 days’ holiday, inclusive of bank and public holidays, each year. This will be pro-rated if you work part-time. Many businesses offer more than the statutory entitlement and increase the level of entitlement with length of service. See if the company is prepared to be more generous if it offers the statutory minimum.
Sick Pay
Employers are legally required to pay statutory sick pay (rather than your normal salary) if they are off work: £99.35 per week for up to 28 weeks. Some employers have contractual sick pay arrangements. Think about whether the periods are reasonable, and whether they dovetail with critical illness cover.
Policies and procedures
It’s likely that the employment contract will refer to the business’s staff handbook or certain policies and procedures — ask for these. It will give you a feel for the business’s culture and be informative about family-friendly arrangements. Does it offer enhanced maternity and paternity pay and compassionate leave?
Notice period
Statutory minimum notice periods are short. These require that after one month’s employment, an employee and employer must give each other one week’s notice. The notice period that an employer has to give then increases with each year of service. In certain sectors, it is typical for the employer and the employee to agree longer notice periods.
Employment contracts often allow the business to pay a lump sum in lieu of notice. This may cover salary only, and allow the business to pay it in instalments. If you feel that the notice provisions are one-sided, ask for them to be made fairer.
Post-termination restrictive covenants
These are often overlooked. It is important they are carefully reviewed as they have can have a significant impact on what you do next. There could be a non-compete covenant preventing you working from a competitor for a certain period.
There is no requirement in the UK for an employee to have to be paid during the period of the covenants. If you consider the covenants are too onerous (if they are for long periods, cover client connections you are bringing to the business, or there is no set off from the periods for any time spent on garden leave), negotiate them before you sign the contract.
Louise Lawrence is ranked as a Next Generation Partner for Employment Law by Legal 500.
