Employment Contract Template: What To Include

Sophie runs a small design studio in Manchester. She's found the right person for her first full-time hire, agreed the salary and start date, and now she's staring at a free employment contract template wondering, is this actually enough?

It's a very normal moment. A template can feel like the fastest way to get the admin done, but employment contracts carry a lot of weight. They set expectations, protect your confidential information and help you avoid awkward disputes later.

The good news is that your contract doesn't need to be full of legal jargon. It does need to be clear, compliant and tailored to the way your business actually works.

Can I Use A Free Employment Contract Template?

Yes, you can use a free employment contract template as a starting point, but you shouldn't treat it as a finished document without checking it carefully.

For employers in England and Wales, an employment contract usually needs to work alongside the written statement of employment particulars required under the Employment Rights Act 1996. Since April 2020, most employees and workers are entitled to receive key written terms on or before their first day of work.

A basic template might cover some of those details, but it can easily miss the clauses that matter most for your business. For example, if your employee will access client lists, pricing documents, designs, code, recipes or marketing plans, a generic confidentiality clause may not be strong enough.

A free template can also be out of date. Employment law has changed in recent years, including rules around flexible working, holiday pay for irregular hours workers, tips, sexual harassment prevention duties and neonatal care leave. The Employment Rights Act 2025 is also being implemented in phases, with some employment law reforms already in force and others due to follow, so relying on an old document can create gaps.

A sensible approach is:

• Use a template to understand the structure.
• Check every clause against how your business operates.
• Remove anything you don't understand or can't realistically follow.
• Get tailored advice before you send it to the employee, especially for your first few hires.

Think of the template as scaffolding, not the finished building.

What Should I Include In An Employment Contract?

Your employment contract should include the key legal particulars, plus practical clauses that explain how the role will work day to day.

Here's a fill-in outline you can use to brief your legal team or review a template. This isn't a finished legal document, and it's safest to have a lawyer tailor it before you use it.

1. Employer And Employee Details: Write your business name, registered details if you trade through a company, and the employee's full name.
2. Job Title And Duties: Describe the role, reporting line and a short list of main responsibilities, while allowing reasonable changes as the business grows.
3. Start Date And Continuous Employment: State the start date and whether any previous service counts towards continuous employment.
4. Place Of Work: Confirm the normal workplace, any remote work arrangements and whether travel between sites may be required.
5. Hours Of Work: Set out normal hours, breaks, shift patterns, overtime rules and whether hours may vary.
6. Pay And Benefits: State salary or hourly rate, payment frequency, pension arrangements, bonuses, commission and any benefits.
7. Probation Period: Explain the length of probation, review process and any shorter notice period during probation.
8. Holiday Entitlement: Confirm annual leave, bank holiday treatment, holiday year and how holiday should be requested.
9. Sickness And Absence: Set out reporting rules, evidence requirements and whether you offer contractual sick pay or only statutory sick pay.
10. Notice Periods: State the notice your business and the employee must give, making sure it meets statutory minimums.
11. Confidentiality: Protect business information such as client lists, supplier terms, pricing, know-how and internal documents.
12. Intellectual Property: Confirm who owns work created during employment, especially for creative, software, product, marketing and design roles.
13. Data Protection: Refer to your UK GDPR and Data Protection Act 2018 obligations, and how employee personal data is handled.
14. Policies And Procedures: Refer to disciplinary, grievance, equal opportunities, anti-harassment, IT, social media and health and safety policies.
15. Termination: Explain when employment can end, including resignation, dismissal, garden leave and payment in lieu of notice if you want that option.

The aim is clarity. If a clause is vague, you'll have more room for disagreement later.

What Legal Minimums Does Your Template Need To Cover?

Your template needs to cover the statutory particulars required by the Employment Rights Act 1996, as well as minimum rights that apply whether or not your contract mentions them.

At a practical level, check these points before you issue the contract:

• Day-One Written Terms: Employees and many workers should receive key written particulars on or before the first day of work.
• Pay: Pay must meet at least the National Minimum Wage or National Living Wage for the worker's age and category. HMRC rates usually change each April.
• Holiday: Most full-time employees are entitled to 5.6 weeks' paid annual leave per year. This is 28 days for someone working 5 days a week, and it can include bank holidays.
• Notice: Statutory minimum notice is 1 week once the employee has worked for you for at least 1 month, then 1 week for each full year of service from 2 years up to a maximum of 12 weeks.
• Working Time: The Working Time Regulations 1998 cover rest breaks, weekly rest and the 48-hour average weekly working limit unless a valid opt-out applies.
• Pension Auto-Enrolment: Eligible employees usually need to be enrolled in a workplace pension if they meet age and earnings criteria.
• Family Leave: Your contract should sit alongside statutory rights such as maternity, paternity, adoption, shared parental leave and, from April 2025, neonatal care leave for eligible parents.
• Flexible Working: Since April 2024, eligible employees can make flexible working requests from day one of employment, and you need a fair process for handling them.

You don't need to reproduce every statute in the contract. In fact, that can make the document harder to read. But you do need the contract to avoid cutting across minimum rights.

For example, you can't contract out of statutory holiday entitlement. If your template says a full-time employee gets only 20 days' annual leave and doesn't explain bank holidays, you may accidentally understate their entitlement.

When Is A Bespoke Employment Contract Safer Than A Template?

A bespoke employment contract is safer when the role, pay structure or risks don't fit neatly into a basic template.

Templates tend to work best for simple roles with standard hours, standard pay and low access to sensitive information. Once your business adds complexity, the contract should be adjusted.

Situations Where Tailoring Matters

• Your employee will create intellectual property, such as software, designs, training materials, content, recipes or product concepts.
• You want post-employment restrictions, such as limits on poaching clients, suppliers or staff.
• The role includes commission, bonuses, tips, overtime or shift allowances.
• You use hybrid work, remote work or multiple work locations.
• The employee will handle personal data, confidential commercial information or financial information.
• You operate in a regulated sector or need strict health and safety, safeguarding or data security rules.
• You want the option to use garden leave or make a payment in lieu of notice.

Worked Example: A Cafe Manager With Tips And Overtime

Say you run a cafe in Bristol and hire Mia as your first manager. She works 5 days a week, 40 hours a week, and helps organise rotas, supplier orders and cash-up procedures.

A basic template says Mia gets 20 days' annual leave. That would be too low unless bank holidays are also included separately, because a 5-day employee is generally entitled to 28 days' paid leave in total.

The template also says overtime is unpaid, but your practice is to pay extra for late events. If the contract doesn't explain when overtime is approved and how it's paid, you may end up with a dispute after a busy month.

If customers leave tips, you also need to consider the Employment (Allocation of Tips) Act 2023 and the tipping rules that came into force in October 2024. Your contract and policy shouldn't contradict your duty to allocate qualifying tips fairly.

For Mia, a tailored contract would likely deal with holiday, overtime approval, confidentiality around suppliers and pricing, tips, keys, cash handling and notice. That gives both sides a much clearer starting point.

What About Cost?

Your options usually look like this:

• Free Template: Cheapest upfront, but you do the legal checking and tailoring yourself.
• Online Fixed-Fee Legal Service: Usually clearer on scope and cost, with a tailored document prepared for your business.
• Traditional Hourly Firm: Useful for complex matters, but costs can be harder to predict if the work expands.

The cost is usually driven by how customised the contract needs to be, how many employee types you have and whether you need related policies or a staff handbook.

Should I Use The Same Contract For Full-Time, Part-Time And Casual Staff?

No, you shouldn't use the exact same contract for every type of staff member unless the arrangements are genuinely the same.

Employment status matters in the UK. The person working for your business may be an employee, a worker or a self-employed contractor. The label in the contract helps, but the real working arrangement matters too.

For example, if someone has set hours, must personally do the work, is managed by you and is integrated into your team, calling them a contractor won't necessarily make them one. If the status is wrong, you may face backdated holiday pay, minimum wage issues, tax complications and disputes about employment rights.

Different arrangements need different drafting:

• Full-Time Employees: Usually need a standard employment contract covering salary, full-time hours, holiday, sick leave, notice, confidentiality and policies.
• Part-Time Employees: Need similar protections, but pay, benefits and holiday should be pro-rated fairly under part-time worker rules.
• Casual Or Zero-Hours Staff: Need careful wording around whether you have to offer work, whether they have to accept it, holiday accrual and notice.
• Fixed-Term Employees: Need a clear end date or project trigger, plus wording on early termination and renewal.
• Contractors: Usually need a contractor agreement rather than an employment contract, with careful wording on independence, tax responsibility, substitution, insurance and intellectual property.

This is one of the areas where getting help early can save a lot of trouble. If you're not sure what status applies, get advice before the person starts work, not after the relationship breaks down.

How Should I Send And Store The Contract?

You should send the contract before the employee starts, give them time to review it and keep a clear record of the signed version.

A simple process works well:

1. Finalise The Offer: Agree the role, salary, start date, hours and any key benefits before preparing the contract.
2. Send The Contract Promptly: Aim to send it with the offer letter or well before day one, so you're not rushing.
3. Ask For Signed Acceptance: Electronic signatures are commonly used for employment contracts, provided you can identify who signed and keep the signed copy.
4. Keep Policies Separate: Put detailed procedures, such as disciplinary, grievance, IT and social media rules, in a staff handbook or policy set. This makes updates easier.
5. Store Records Securely: Keep employment records in a secure HR folder with sensible access controls.
6. Review When Things Change: Update the contract or issue a written variation if the employee's role, hours, pay or work location changes materially.

Your employee records contain personal data, so UK GDPR and the Data Protection Act 2018 apply. You should only collect what you need, keep it secure and avoid holding it longer than necessary. Many businesses keep core employment contract records for the employment period plus up to 6 years where they have a proper reason, because contractual claims can arise after employment ends.

Try not to rely on informal messages for major terms. If you agree a salary increase, new working pattern or change to notice period over email or chat, follow up with a formal written variation so there's no confusion later.

Key Takeaways

• An employment contract template can be a useful starting point, but it needs careful checking before you send it to your first hire.
• Your contract should cover day-one written particulars, pay, hours, holiday, sickness, notice, confidentiality, intellectual property and termination.
• Statutory rights still apply even if your template leaves them out or gets them wrong.
• A bespoke contract is usually safer for roles involving commission, tips, overtime, remote work, confidential information or creative work.
• Use different contracts for employees, part-time staff, casual staff, fixed-term staff and contractors where the working arrangements differ.
• Keep signed contracts and later changes securely, and review your documents as employment law changes.

If you'd like help with tailoring your employment contracts, checking your hiring documents, or setting up staff policies for your growing team, you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.