Reviewing employment contracts rarely feels urgent – until suddenly, it is. When you are focused on managing clients, supporting employees, recruiting staff and keeping day-to-day operations running, reviewing contracts can easily move to the bottom of the list. However, outdated contracts can create unnecessary risk for your organisation.
When Contracts No Longer Reflect Reality
Businesses and roles change over time, but employment contracts do not always keep pace. This can lead to problems such as:
- An employee joining a competitor when their restrictive covenants are no longer suitable.
- Flexible working arrangements differing from the terms in the contract.
- A senior employee having a notice period that no longer reflects their responsibilities.
- Confusion about whether bonuses, benefits or other perks are contractual or discretionary.
- Employment documents failing to reflect how a growing business now operates.
The risk is not only having no written contract. A contract that no longer reflects the employee’s role or current working arrangements can also create misunderstandings and disputes.
Employers must provide employees and eligible workers with a written statement of employment particulars. If an employee successfully brings another relevant tribunal claim and there is also a problem with their written statement, the tribunal may award additional compensation of up to four weeks’ pay. (GOV.UK)
Taking a Proactive Approach
Regular contract reviews allow employers to identify gaps before they become problems. Reviews may be particularly important when roles change, employees receive promotions, new benefits are introduced, working arrangements evolve or the business grows.
Any proposed contractual changes should be handled carefully, with appropriate communication, consultation and agreement.
When did you last check whether your employment contracts reflect how your organisation operates today? If you need support reviewing or updating your employment contracts, the McKinney HR team can help. Contact us at support@mckinneyhr.co.uk for an initial conversation.