Employment Contracts

Owner-employee contracts

George Osborne recently announced the government’s plans to introduce a new type of employment contract known as an ‘owner-employee’ contract.

An interesting concept, modelled on the John Lewis Partnership approach, but going one HUGE step further. In return for shares (£2000 – £50000) employees will be expected to give up some of their employee rights!

Consultation is due to start on this latest hare-brained idea. At the moment we are very light on detail, but plans are to have this ready to introduce for April 2013.

This proposed owner-employer contract will be an interesting challenge for organisations, but what about your current employment contracts?

Why do you need contracts of employment?

An employment contract exists as soon as an employee accepts the job offer, but there is an additional requirement for you to provide a written statement of the main terms of employment within two months of the employee starting work.

The main benefit to the practice of having a written employment contract is that, in addition to being compliant with current legislation, it reduces the likelihood of disputes with your employee at a later date, and helps employees understand their employment rights.

Case   study – a small Company had attempted to introduce a new contract to reflect the changes in legislation 3 years ago, but had not followed it through. Resulting in many staff having nothing more than a basic offer letter in place . In addition to non-compliance with the written particulars requirement, when a dispute arose relating to working hours the firm did not have the current arrangements documented and faced losing the tribunal case.

Do your contracts reflect current legislation and practice?

  • When did you last review your employment contract?
  • Does it still contain a retirement age?
  • Does it include reference to a email and internet usage or social media?
  • Does it reflect the reality of the current contract?
    • Are current salary and working hours up to date?
    • Are the job title and duties still appropriate?
    • Has anything else changed?

Often employment contracts are written at a point in time and then never updated. As employment legislation is constantly changing this means your employment contract is quickly out of date.

What do you need to do to be compliant?

A quick audit of your employment contracts will highlight any changes are needed. Once identified new contracts or contract amendment letters can be drawn up, changes communicated with employees, employment contracts signed and put on file.

Depending on how many changes or how fundamental those changes are, you may need to enter into consultation with your employees. Often this can be handled in a low key, non-confrontational manner to ensure you achieve the outcome needed.

Employment contract review is an activity that no-one wants to deal with as it is seen as a time consuming, confrontational process, which does not appear to add value to the firm.

Athena Professional can help you both identify what needs to be done and to ensure that the necessary actions are taken.


Jane: Jane@athenaprofessional.co.uk T: 07977 932551 or

Nicola: Nicola@athenaprofesssional.co.uk T: 07799 237479