The Employment Contract – what you need to know as a small business owner

By Orlaith Hickey
HR Consultant
23rd September 2014

There is a significant amount of employment legislation Irish companies need to contend with – the primary purpose of which is to protect employees. This puts the onus is very firmly on the employer to ensure they are compliant. One such piece of legislation is the Terms of Employment (Information) Acts 1994 to 2012. Under this legislation, every employer must provide all new employees with a written statement of terms and conditions governing his/her employment. This must be given within 2 months of the start of the employment.

Section 3 of the Act states that the statement should contain the following particulars :

– The full names of the employer and the employee
– The address of the employer
– The place of work
– The title of the job or nature of the work.
– The date of commencement of the employee’s contract of employment
– In the case of a temporary contract, the expected duration of the contract and/or the date on
which the contract expires
– The rate or method of calculation of the employee’s pay
– The pay reference period and pay intervals and that the employee may request a statement of
their average hourly rate of pay
– Any terms or conditions relating to hours of work (including overtime)
– Any terms or conditions relating to paid leave (other than paid sick leave)
– Any terms or conditions relating to sick pay or a pensions
– The period of notice of termination to be given by the employer and the employee
– Details of any collective agreements.

The benefits of a well written contract !

The central reason for having any contract is to avoid litigation. In the absence of a written contract implied terms and conditions can easily develop, particularly in a small business. Problems, including disputes, then arise when the employer and the employee have different views as to what are the implied terms. This can be avoided by having a written contract at the outset.

A contract can also protect the employer from any potential, inadvertant or otherwise, rogue promises made at interview.

A written contract can be the difference between a potential employee accepting or rejecting an offer of employment. An employee with a contract feels protected and secure.

Getting more return for your buck…

It’s easy to see how at the start of a new venture that financial spend on employment issues may get pushed to the bottom of the list. However, a little bit of time and money spent on a well drafted contract of employment could well save a lot of heartache and possibly litigation in the future.

Not only that but attracting and retaining talent is one important source of gaining or maintaining competitive advantage. Motivated employees can make or break your business performance.

Making the contract work for you is crucial when setting out to draft your contracts. There may be certain eventualities, for example provision for Lay-off and/or Short-time, that are not required by law but which you may decide is worthwhile being clearly stated in a contract.

A sometimes contentious area is the area of Dismissal. This area, if not treated carefully, can turn out to be tricky and even land an employer in Court. The Unfair Dismissals Act 1977 requires that employers set out for employees, the procedure that will be used in the event of dismissal. This must be given to employees within 28 days of starting employment. Whether you refer to it in your contract of employment or include it in full, you should have written Grievance and Disciplinary procedures in place and your employees should be made aware of them.

Other areas which can be useful to include are:


– Probationary Period – particularly useful in conjunction with a Performance Management System.

– Retirement – in my view it is necessary to define a retirement age or date.

– Confidentiality and non-disclosure – for obvious reasons.

– Health and Safety.

The list is almost endless – but a lengthy contract can be unwielding. Supplementing the contract with a comprehensive Staff Handbook makes the job of managing employees more straightforward. At the very least however, developing a well written contract at the outset also sets the tone of the employment relationship.

 A few quick reminders !


Getting your Human Resource basics right from the start really helps ! Also remember ….

– Make sure your Employment Contracts are in writing.
– Give employees their contract within 2 months.
– Get the Contract Signed ! You must ensure the employee has received and understood it.
– If you have a policy, use it ! This is particularly true of Disciplinary and Grievance procedures.
– When making changes to terms & conditions, inform employees in advance – discussion may suffice but negotiation may be necessary.


Orlaith Hickey is a qualified and experienced HR Consultant, helping small businesses in Ireland. For more information please call +353 87 2908916 or e-mail orlaith.hickey ‘at’