Understanding employment contracts

The CV Writer, helping you write a CV, guiding you to a career.

The information below has been provided by the Money Advice Service.

Employment contracts and your employee rights explained…

What is your employment status?

Your rights at work depend a lot on whether you’re an employee, worker or self-employed. Finding out your status is a key first step to finding out what you’re entitled to. Find out your employment status in our guide on the different kinds of employment.

Your employment contract

Money Navigator Tool

Looking for money guidance, but don’t know where to begin? You’re not alone. Get started with Money Navigator, giving you instant help based on your circumstances.

Get started.

Regardless of your employment status, if you’re working, you should have an employment contract.

While most employment contracts are in writing, they can also be verbal agreements. Oral contracts have the same legal authority but it can be much harder to prove.

Having a written contract provides more certainly over your status and can make it easier to resolve any disputes.

Even if you’re not given a written contract, you’re entitled to a written statement outlining your main employment terms. This should give you details of your:

  • job title
  • pay
  • hours of work
  • access to in-work benefits such as sick pay and holiday entitlement
  • employment start date and notice periods.

Express terms

Express terms are elements of your contract specifically mentioned, either in writing or agreed orally, by both employer and employee.

These might include:

  • sick pay
  • redundancy pay
  • hours of work, including overtime hours
  • how much notice is needed to end the contract
  • how much you will be paid (including overtime and bonus pay)
  • holiday pay, as well as how much time you’re entitled to take off (most full-time workers are entitled to 28 days and part-time workers get the same amount, in proportion to the number of days or hours they work).

Express terms can be found in your work contract, but also:

  • the job advert
  • any letters you receive from your employer
  • documents you were asked to sign, such as a staff handbook or manual.

Make sure you keep copies of all documents given to you by your employer. This makes it much easier if there is a dispute about your contract.

Implied terms

Implied terms are not written down in a contract but would be expected behaviour and can be implied into most employee contracts.

For example, you won’t steal from your employer or you won’t give away confidential information.

Your employer must, in turn, provide a safe working environment and shouldn’t ask you to do anything illegal, such as drive an uninsured vehicle.

Terms might also be implied through custom and practice.

This is where arrangements have never clearly been agreed but over time have become part of the contract. Examples of this might include finishing early on a Friday, or a Christmas bonus.

For an entitlement to become established by custom and practice it must usually be:

  • uninterrupted
  • long standing
  • automatically received
  • expected and well-known.

Unauthorised deductions from wages

If an employer is going to make deductions from your wages, they should be legally authorised.

For example, tax and National Insurance, and put into your contract with a written explanation or agreed in writing before they are made.

There are some exceptions, for example if you have been overpaid by mistake or have not worked because you have taken part in industrial action.

There is special protection for retail employees meaning it’s illegal for an employer to deduct more than 10 per cent of their gross wages for cash shortages or stock shortfalls.

Probationary periods

Employers sometimes give new employees a probationary period.

Your contract can contain terms applying only during your probationary period, but these terms cannot take away your statutory rights.

For example, during a probationary period, you might not have all the rights you’ll have once the period is over, but there can be no reduction in your statutory rights, for example, to paid holiday, statutory maternity leave or sick pay.

Your full contractual rights start on your first day of work, unless your contract says otherwise.

Changes to contracts

Your employer might want to change the terms of your contract, for example:

  • change your pay
  • change the work you do
  • change your place of work
  • cut or change the hours you work.

In theory, your employer can’t change the terms of your contract without your agreement.

If you’re not sure how a change will affect you or whether to accept it, you can get free employment advice from your local Citizens Advice or the ACAS helpline. Need help understanding a change of contract? Find out more on the Citizens Advice website. In Northern Ireland you should visit Advice NI.

Employee rights


To help you work out if you’re being paid the National Minimum Wage, from April 2019, payslips will have to include details of the number of hours you’ve worked. Find out more in our guide about understanding your payslip.

If you’re an employee, you have access to a wide range of in-work benefits including:

  • National Minimum Wage
  • Workplace pension
  • Paid holiday
  • Statutory Sick Pay
  • Statutory Maternity, Paternity and Adoption Leave and Pay
  • Shared Parental Leave and Pay
  • Statutory Redundancy Pay
  • Protection against unfair dismissal.

All of these, plus any additional rights, should be clearly laid out in your employment contract, which is why it’s important to read it before signing it.

If you have any issues or queries about your contract, or you think the terms of your contract have been broken, the first thing you should do is take this up with your employer.

You might also be able to get advice, or further help if you cannot resolve the issue with your employer, from:

  • a solicitor,
  • your trade union (if you’re a member),
  • ACAS (the Advisory, Conciliation and Arbitration Service) in England, Scotland and Wales
  • The Labour Relations Agency (LRA) in Northern Ireland.

You can contact the ACAS helpline on 0300 123 1100 and the LRA helpline on 028 9032 1442. Discover more about mediation and help resolving employment issues in England, Scotland and Wales on the ACAS website. If you’re in Northern Ireland, you can find more information on the Labour Relations Agency (LRA) website.

If you can’t sort out the problem, you could use an employment tribunal (this is called an industrial tribunal in Northern Ireland).

There are no fees for going to an employment tribunal in the UK. There’s more information about tribunal fees on Gov.uk.

Employment rights if you’re self-employed

Self-employed people normally don’t have the legal right to in-work employee benefits.

However, if you’re in a position to negotiate with people contracting you to work, you might be able to include some of these rights in your contract.

You will still have protection for health and safety if you’re working on business premises and, under some circumstances you have protection against discrimination. Find out more about your rights protecting you from discrimination on Gov.uk.

If you have any issues with your self-employed contract, or treatment at work, then the first thing you should do is raise your concerns with your employer.

Depending on the issue you might be able to get some help and advice from ACAS on 0300 123 1100 if you’re in England, Wales or Scotland.

If you’re in Northern Ireland you should contact the Labour Relations Agency (LRA) on 028 9032 1442.

As you’re self-employed, you might not be a member of a trade union. However, there are unions like Community that are getting more involved in the rights of self-employed workers. Find out more about how Community can help you if you’re self-employed on their website.

Employment rights if you’re on a zero hours contract

Zero hours contracts are becoming increasingly common and are offered in many sectors including the care industry, hospitality sector, warehouse work and couriers.

Your contract should clearly state it’s zero hours and will often say you must be ready for work when asked and state the company is under no legal obligation to offer you work.

You are classified as a worker, so are entitled to basic in-work benefits including the National Minimum Wage and annual leave. You can find out more about zero hours contracts and your rights on Gov.uk.

If you have any issues with your treatment at work or the salary you’re receiving is below minimum wage, the first thing you should do is take this up with your employer.

You can also contact ACAS on 0300 123 1100 if you’re in England, Wales or Scotland, or the Labour Relations Agency (LRA) on 028 9032 1442 if you’re in Northern Ireland.

Employment rights if you work in the gig economy

The gig economy has become a well-known term in recent years with the rise of companies like Uber, Deliveroo and Hermes.

At the moment, most people in the gig economy are classified as self-employed and have no legal right to in-work benefits.

However, a number of court cases have ruled this kind of employment should fall under ‘worker’ status.

Worker employment status is similar to an employee and entitles you to basic in-work rights such as paid holiday and National Minimum Wage. Depending on your employer, you might also be entitled to statutory sick, maternity, paternity and adoption pay.

But, this does not apply to all gig economy workers and a number of these cases are under appeal.

If you work in the gig economy and are interested in trade union support, you can join the Independent Workers Union of Great Britain (IWGB). Find out more about the IWGB on their website.

Your rights if you’re an agency worker

If you work though an agency, then your rights can be very different. Find out more about your rights as an agency worker here.

This article is provided by the Money Advice Service.