Top employment lawyer Louise Lawrence on job contracts
“So you’ve got the job! Congratulations!”
That’s usually where the conversation ends. However, negotiating an employment contract is just as important as nailing the interview, so it’s crucial to know what to look for. Louise Lawrence, who is an employment lawyer at the London-based law firm Winckworth Sherwood LLP, has given some advice on things to watch out for in a new employment contract.
Lawrence says that the first thing to look at is the presence of a probationary period, as the prospect of termination with little notice is something which can jeopardise an employee’s financial security.
“These can have benefits for both parties as if you end up not liking your new role you can move on quickly. However it can also be disenchanting to see that your employment can be terminated on very short notice,” Lawrence says, “Consider asking for the probationary period to be removed or extending the notice period to give you some financial comfort if things do not work out and the business dismisses you during the probationary period.”
Of course, a major concern should be salary. Lawrence says to not be afraid of negotiating a higher number, and to ensure that your salary will be reviewed regularly to combat the rising cost of living.
“Don’t be afraid to ask for more than was originally suggested. With the cost of living going up, also check when your salary will be first reviewed and what the business’s process is in relation to salary reviews,” Lawrence says.
Alongside salary come bonuses, which can take different forms. Sign-on bonuses and performance bonuses should both be examined carefully to find out what exactly the requirements for receiving and keeping them are.
“You may be offered a sign-on bonus as well as performance bonuses. Sign-on bonuses often contain repayment provisions if you leave the business within a certain period so check what these are and whether there is a sliding scale of repayment relating to how long you stay with the business as this would be more reasonable than you having to repay the whole amount no matter how long you have stayed with the business,” Lawrence says, “For performance bonuses find out what criteria you have to meet and obtain as much clarity in writing as possible before you enter into the contract. You may also want to negotiate a guaranteed bonus for the first year while you get up and running at the new business.”
With the talent war raging, benefits are more important than ever, so it is worth knowing what you will be getting in order to make an informed decision about accepting an offer.
“Employers are focussing on what benefits they can offer to employees in the war for talent. Find out what benefits you will be eligible for and in particular whether private medical insurance, critical illness insurance and death-in-service benefits are provided,” Lawrence says.
Flexibility and holiday are two important factors. At the moment, businesses offering remote work may be offering it only temporarily, so this is worth finding out before you sign on. Workers are entitled to 28 days of holiday time, including bank holidays, per year. Any more than that is up to the company, so this is information can be found in your contract. As Lawrence points out, sick pay also has a statutory minimum, so check if your potential employer offers more.
“A number of employers have contractual sick pay arrangements where they agree to pay more than this. Have a think about whether you feel those periods are reasonable and also ideally whether they dovetail with any critical illness cover in case you become ill with a serious condition,” Lawrence says.
If the employment contract mentions other texts, such as a staff handbook or specific policies, you should ask for these documents before you sign. They often cover things like maternity and paternity leave as well as emergency leave policies.
A new job often feels like the beginning of an exciting journey, but most of the time that journey will end at some point, so it is good to be prepared. Lawrence explains the importance of minimum notice periods for both the employer and employee.
“Statutory minimum notice periods are short,” Lawrence says, “These require that after one month’s employment, an employee and employer must give each other one week’s notice. The notice period that an employer has to give then increases by each year of service up to a maximum of 12 weeks’ notice after 12 years’ service. Contracts often include a right for the business to pay a lump sum in lieu of notice. If you feel that the notice provisions are one-sided, ask for them to be made fairer.”
The final point to look out for is any agreement which may limit what you do professionally after leaving the company. If a non-competition agreement is signed without much consideration, it could leave a former employee unable to work in their field if they are fired or choose to leave.
“There could be a non-compete covenant preventing you working from a competitor for a certain period or covenants preventing you from soliciting and dealing with clients for a certain period,” Lawrence says, “There is no requirement in the UK for an employee to have to be paid during the period of the covenants. If you consider the covenants are too onerous, negotiate these covenants before you enter into the contract.”
This may seem like many things to check off the list, but it is important to protect oneself in the world of work. Even though most employers are not likely to have predatory or deceptive conditions in their contracts, it is always worth checking, even if only to see what can be negotiated for. Armed with this knowledge, it is our hope that you will be able to accept job offers with confidence.