Contracts offer vital protection

should include terms and conditions to explain these entitlements.

Fixed-Term Employment

Permanent Employment

Out of the four different types of agreements, permanent employment agreements are the most common. Employees who are on permanent agreements are those whose jobs last indefinitely unless either they or their employer decide to end it.

Permanent employees can work fulltime or parttime, but regardless of how many hours they work a week, they’re entitled to similar benefits.

Permanent employees will get sick leave, bereavement leave, and annual leave as long as they work continuously and meet the requirements of the Holidays Act 2003.

Permanent employees also have a minimum of four weeks of annual leave, calculated pro rata for part-timers.

A permanent employment agreement

Meanwhile, a fixed-term employment agreement is a temporary agreement that doesn’t last for an indefinite period of time. It has to end on a specified date or when a specific event happens.

For a fixed-term employee’s employment to be effective, the parties must sign a fixed-term employment agreement which states when, how, and why their employment will end. Employers must have “a genuine reason” for employing an employee for a fixed term, which must be based on reasonable grounds. For example, it is reasonable for an employee to be employed on a fixed term to cover another employee’s parental leave or to cover a busy period like Christmas, but it is not reasonable to employ an employee on a fixed term to test their suitability to a role.

Casual Employment

Most of us know what a casual employee is – it is someone who works on an “as and when needed” basis. As casual employees don’t have set hours, they are usually paid holiday pay on a pay-as-you-go basis [equating to eight per cent of their wages] instead of receiving any entitlement to take annual leave.

It can often be quite easy for a casual employee to unintentionally become a part-time permanent employee, sometimes over time. Is your employee being wrongly classified as a casual employee? Here are some of the criteria that must be met in order for an employee to be classified as ‘casual’: There is engagement for short periods of time for specific purposes; The employment relationship lacks any regular work pattern whatsoever [ie they do not work on a weekly or fortnightly basis]; The employee’s employment is dependent on the availability of work demands; There is no guarantee of work from one week to the next; on the employee to accept another offer of work – so the employee can turn down work on offer; Employees are only engaged for the specific term of each period of employment.

If you think a casual employee is not meeting the criteria anymore, it is time to update their employment agreement. If you do not and a casual employee’s employment ends suddenly, they can argue they were performing the role of a permanent employee. This is likely to give rise to an unjustified dismissal

Independent Contractors

Lastly, we have selfemployed independent contractors. A selfemployed contractor is someone your business hires to provide services pursuant to an independent contractor agreement. For a contractor to be considered as working as an independent contractor instead of an employee, they must be operating a business on their own account and earn their income by invoicing your business for their services. Independent contractors are not covered

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by most employmentrelated legislation, so they do not have the same entitlements to, for example, annual or sick leave or employment benefits, and they must pay their own tax. This means it’s very important to define the working relationship at the beginning, to prevent the contractor from claiming that they’re an employee and arguing that they deserve to be paid holiday pay, etc. It might seem unnecessary to draw up an agreement for an independent contractor, particularly if you have a good relationship with them, but relationships can change and problems can arise – even with people you’d least expect it. Independent contractor agreements should therefore explain why the parties consider the nature of their relationship is that of a contractor and principal, rather than an employer and employee. It should also include essential provisions to protect your business, such as confidentiality and intellectual property terms, and should explain what processes the party will follow in the event of a dispute.

A well-drafted independent contractors agreement will give the parties clarity on the services that will be provided, how the relationship will operate, and in which manner it may be terminated.

Advice: After looking at different types of agreements, it’s clear that no matter what type of engagement you have, a well drafted agreement is necessary to ensure all rights and obligations between the parties are clear. This will help to minimise workplace problems, make things run more smoothly and could prevent your business from getting into some serious legal trouble. An individual employment agreement should be signed by the employer and employee, although it can still be valid even if it isn’t. For example, when there is verbal or written acceptance. Electronic signatures, if agreed between the employer and employee, are acceptable to meet this requirement. There are some things that must be in your employment agreement and other things that are usually in employment agreements but don’t have to be, such as your notice period.

Minimum rights [such as the minimum wage and annual holidays] are legal requirements and apply even if they’re not in the employment agreement. Your employment agreement can’t reduce these or trade them off for other things.

• Further advice is available at Citizens Advice Bureau where your information is confidential and our advice is free.

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