How to Write a UK Employment Contract: A Guide for Business Owners
If you're taking on your first employee , or your fiftieth, getting the employment contract right is one of the most important things you can do as a business owner. A well-drafted contract protects both you and your employee, sets clear expectations from day one, and keeps you on the right side of UK employment law.
With the Employment Rights Act 2025 now in force (receiving Royal Assent in December 2025), there's never been a more important time to make sure your contracts are up to date. Here's what you need to know.
Why a Written Contract Matters
You're legally required to provide employees with a written statement of particulars on or before their first day of work. Think of this as the foundation of your employment relationship. Get it wrong and you could face tribunal claims and under the ERA 2025, employees now qualify for unfair dismissal protections after just six months' service (down from two years), so the stakes are higher than ever.
What to Include in Your Employment Contract
1. The Basics
Start with the essentials: the employee's name and job title, your company name and address, the start date, place of work, and whether the role is permanent or fixed-term.
2. Notice Period
For a generic employee, one month's notice on either side is a reasonable and common starting point. Your contract should state this clearly. Remember, statutory minimums also apply — after one month's service, an employee is entitled to at least one week's statutory notice, rising by a week for each year of service up to 12 weeks.
3. Holiday Entitlement
UK employees are entitled to a minimum of 28 days' paid annual leave per year (for a full-time, five-day-week employee), which can include the eight UK bank holidays. Always state the holiday year, how leave is booked, and what happens to untaken leave at the end of the year.
4. Statutory Sick Pay (SSP)
Your contract should confirm that employees will receive Statutory Sick Pay in line with current government rates when they are unable to work due to illness. SSP is currently payable from the first day of absence for eligible employees; a change brought in under the ERA 2025, which removed the previous three-day waiting period. Be sure your sickness absence reporting procedure is clearly outlined too.
5. Right to Work
Before anyone starts work, you are legally obliged to check that they have the right to work in the UK. Your contract should include a clause confirming that continued employment is conditional on the employee maintaining that right. Keep copies of the documents you've checked; this is your legal protection.
6. Probation periods
The ERA 2025 probation warning explains three key legal realities:
The qualifying period for ordinary unfair dismissal is set to reduce from two years to six months, with commencement expected from January 2027, making timely and appropriate probation management and decisions essential.
Employees who already have six months' service on 1 January 2027 will gain protection immediately, meaning anyone already in employment now, plus new hires up to the end of June 2026, will be covered immediately.
Point to Note – Day One Protections
Day-one protections against discrimination and automatically unfair dismissal remain. Unaffected employees can still bring automatic unfair dismissal claims from day one in situations including pregnancy-related dismissal, asserting statutory rights, or whistleblowing.
7. Confidentiality
A confidentiality clause protects your business's sensitive information; client lists, pricing, trade secrets, and business strategy. Make it clear what counts as confidential information and that this obligation continues even after the employment ends. Keep it proportionate; overly broad clauses can be difficult to enforce.
8. GDPR and Data Protection
Under UK GDPR, you must tell employees how you collect, use, and store their personal data. Include a clause in the contract (or reference a separate Privacy Notice) that explains this clearly. This covers things like payroll data, absence records, and any monitoring of company devices.
9. Training Clause
If you're investing in training, especially funded or qualification-based training, it's sensible to include a training repayment clause. This allows you to recover a proportion of training costs if the employee leaves within a specified period. Make sure any repayment is reasonable and clearly set out; if it's a deduction from wages, the employee must give written consent.
A Note on the Employment Rights Act 2025
The ERA 2025 is the most significant shake-up of UK employment law in a generation. Key changes that affect contracts and day-one practices include:
Day-one unfair dismissal rights (subject to a six-month qualifying period)
Strengthened protections for pregnant employees and those returning from family leave
Flexible working: employers must now provide a reasonable reason to refuse a flexible working request
Zero-hours contracts: new rights to guaranteed hours for eligible workers
A new Fair Work Agency with powers to enforce employment rights on workers' behalf
If your contracts predate December 2025, now is a good time to review them. Please get in touch with the Edelweiss Team who will be happy to advise you and update your contracts accordingly.
Final Thoughts
Writing a robust employment contract doesn't need to be intimidating, but it does need to be thorough. Always have your contracts reviewed by an HR professional or employment solicitor, especially as the law continues to evolve. A small investment in getting it right at the start can save you a great deal of time, money and stress down the line.
Need help reviewing or drafting your employment contracts? Get in touch that's exactly what we're here for.
This blog is for general guidance purposes only and does not constitute legal advice. Employment law is subject to change; always seek professional advice for your specific circumstances.