Employment Contracts UK: The Complete Employer’s Guide (Updated for 2025)

Every UK employee and worker has a day-one legal right to a written statement of employment particulars. A well-drafted contract of employment sets out pay, hours, notice and more, and protects your business if a dispute arises. The Employment Rights Act 2025 is now law and phasing in across 2026–2027, so we strongly advise employers to review and update their contracts now.

As HR consultants working with SMEs across the UK, we see the same pattern again and again. A business grows quickly, hires brilliant people, and only discovers its employment contracts are out of date when something goes wrong. A clear, compliant contract of employment is one of the simplest ways to protect both your people and your business.

This guide explains what a UK employment contract must contain, the types available, what the Employment Rights Act 2025 changes, and the risks of getting it wrong. Where the law is still being finalised through secondary legislation, we say so, so you know what is settled and what to keep watching.

What is a contract of employment, and is it legally binding?

A contract of employment is a legally binding agreement between an employer and an employee. It exists from the moment someone accepts a job offer, even if nothing has been written down yet.

That is an important point for employers. A contract can be verbal, but relying on an unwritten agreement is risky. Without clear written terms and conditions, disputes over pay, hours or notice periods become far harder to resolve.

Every contract is made up of express terms (things you agree explicitly, such as salary and job title) and implied terms (such as the duty of mutual trust and confidence). Well-drafted contracts also include express terms that protect your business, such as confidentiality clauses and restrictive covenants. Getting these written down correctly is where most employers need support.

What must be included in an employment contract in the UK?

Since 6 April 2020, every employee and worker has been entitled to a written statement of employment particulars on or before the day they start work. This is a legal requirement under section 1 of the Employment Rights Act 1996, and it applies from day one with no minimum service period.

Most of the required information must be given in a single document, which is often the contract itself. The principal statement must include:

• The employer’s and employee’s names, and the date employment (and continuous employment) started
• Job title, or a brief description of the work
• Pay, including how it is calculated and how often it is paid (weekly, monthly or otherwise), and it must at least meet the National Minimum Wage
• Hours of work, including which days of work are required and whether the hours or days may vary
• Holiday entitlement and holiday pay, set out clearly enough for the amounts to be calculated
• Place of work, and any relocation terms
• The notice period required from both sides
• Any probationary period, including its length and conditions
• Entitlement to sick leave and pay, and any other paid leave
• Other benefits, and details of any training the employer requires

A small number of items, such as pension arrangements, collective agreements, and certain disciplinary and grievance details, can follow in a supplementary statement within two months of the start date. Many employers pair the contract with wider policies covering conduct, health and safety and data protection.

If you would like us to build compliant, bespoke employment contracts for your UK business, our employment contracts service for UK businesses can take the drafting off your plate.

What has the Employment Rights Act 2025 changed about employment contracts?

Employment contract law in 2025 changed significantly. The Employment Rights Act 2025 received Royal Assent on 18 December 2025 and is widely described as the biggest upgrade to workers’ rights in a generation.

Crucially for employers, almost none of it took effect immediately. The government is phasing the reforms in across 2026 and 2027 through secondary legislation, so the detail of several measures is still being confirmed. 

Based on the government’s published roadmap, here is what matters most for your contracts:

• Day-one rights (April 2026): Statutory sick pay and paternity leave are now day-one rights, and statutory sick pay is being widened. Contracts and policies that refer to qualifying periods will need updating.
• Guaranteed hours and fire-and-rehire (expected October 2026): New rules are expected to restrict “fire and rehire” and introduce guaranteed-hours protections for lower-hours workers.
• Unfair dismissal qualifying period (expected 1 January 2027): The qualifying period for ordinary unfair dismissal is due to fall from two years to six months. Note that the widely trailed “day-one” unfair dismissal right was dropped during the Bill’s passage in favour of this six-month period.
• Zero-hours reforms (expected 2027): Qualifying zero and low-hours workers are expected to gain a right to be offered guaranteed hours reflecting what they regularly work over a reference period, plus reasonable notice of shifts. These measures are expected to extend to agency workers and remain subject to consultation and regulations.
• Flexible working (expected 2027): The day-one right to request flexible work has existed since April 2024. From 2027, employers will only be able to refuse a request where it is reasonable to do so, and must explain their reasons in writing.

Probationary periods remain a contractual matter and good practice rather than a fixed statutory scheme. But with the qualifying period shortening, how you structure and document probation matters more than ever. Because the timetable and detail can still shift, we recommend treating this as a live area and reviewing your terms as each stage is confirmed which is exactly the kind of work we help clients update their employment contracts for the ERA 2025.

What types of employment contract does your business need?

There is no single “right” contract. The best fit depends on how you work, how predictable the hours are, and how long you need the role. These are the main types of employment contracts UK employers use.

• Permanent contracts are the most common. They have no fixed end date and continue until either party ends them with the agreed notice period. They suit ongoing, core roles.
• Fixed-term contracts run for a set period or until a specific task ends, such as covering maternity leave or a defined project. A fixed-term contract must not treat the employee less favourably than a comparable permanent colleague.
• Zero-hours contracts offer no guaranteed hours, giving flexibility for fluctuating demand. As noted above, the Employment Rights Act 2025 is set to change how these hours contracts operate from 2027.
• Part-time contracts cover anyone working fewer hours than a comparable full-time employee. Pay, holiday and benefits should be pro-rated fairly.
• Apprenticeship contracts combine paid work with structured training and carry specific legal protections, so they need careful drafting.
• Remote and hybrid contracts should clearly state the place of work, expectations around attendance, and how equipment, expenses and data security are handled.

Choosing the wrong type or using a generic template can create liabilities that only surface later. For tailored guidance on the right contract for each role, our team offers practical advice on employment contract types that UK employers can rely on.

What makes employment contracts different for small businesses?

If you run a small business, you already know the challenge: limited time, no in-house legal team, and a real fear of getting something wrong. Many of the employers we support have grown to ten or twenty staff on the strength of a single template downloaded years ago.

That worry is well founded. The same employment contract law applies whether you employ five people or five hundred. A small business faces the same tribunal risk as a large one, usually without the resources to absorb it.

The good news is that compliant contracts do not have to be complex or expensive. With the right support, you can put robust, bespoke employment contracts in place quickly and move on. Our dedicated service sets out exactly what smaller employers need to see; see our guidance on employment contracts for small businesses.

Can you change an employment contract once it’s been signed?

Yes, but only in the right way. Because a contract is a legally binding agreement, you generally cannot change its terms unilaterally. Changes normally need the employee’s agreement.

The safest route is variation by consent. Explain the proposed change, consult properly, and record the agreed new terms in writing. Common examples include changes to hours of work, pay structures or place of work.

If an employee refuses a change, your options are limited, and forcing it through carries real risk. “Fire and rehire” dismissing staff and re-engaging them on new terms is being further restricted under the Employment Rights Act 2025, so it should never be a first resort. Where changes are sensitive or contested, take advice before you act. Our team provides clear employment contract advice UK employers can act on with confidence.

What happens if you don’t give an employee a written contract?

Failing to provide a written statement is a breach of a legal requirement, and it exposes you in two ways.

First, an employee can ask an employment tribunal to determine what their particulars should have been. Second, and more costly where an employee brings a separate successful claim (such as unfair dismissal or unlawful deduction of wages), the tribunal can add an award of two or four weeks’ pay for the missing statement under section 38 of the Employment Act 2002.

A week’s pay is capped for these purposes (£751 from 6 April 2026), so the uplift is currently worth up to around £1,502 or £3,004. There is no standalone cash penalty for the missing statement on its own, but it rarely arrives alone; it usually compounds a claim you are already defending. Dismissing someone for asserting this right is also automatically unfair, with no qualifying period.

The practical takeaway is simple. Issuing a proper contract on day one is far cheaper than defending its absence later. If you are unsure where you stand, read our guide on no employment contract rights and risks.

What UK employers need to remember about employment contracts

• A contract of employment is legally binding from the moment a job is accepted, even without paperwork.
• Every employee and worker has a day-one right to a written statement of particulars under section 1 of the Employment Rights Act 1996.
• The Employment Rights Act 2025 is now law and phasing in through 2026–2027. Day-one sick pay and paternity leave are expected in April 2026, and the unfair dismissal qualifying period falls to six months from January 2027.
• Choose the contract type that fits the role, and treat zero-hours and flexible-working arrangements as areas of active change.
• You can change a signed contract, but normally only with agreement and proper consultation.
• No written contract means real tribunal risk; issue one on day one.

As full HR partners, we help UK employers get all of this right, from a single bespoke contract to a complete review of your terms and conditions. Explore our full range of HR services for UK employers to see how we can support your business.

Get in touch with Harwood HR Solutions

Building a strong, compliant and people-focused workplace starts with the right HR expertise on your side, and that is exactly what we deliver at Harwood HR Solutions. From tailored consultancy and HR support to bespoke training and policy development, our experienced team helps businesses of all sizes navigate complex people-related challenges with confidence. Ready to strengthen your HR strategy and support your employees more effectively? Contact Harwood HR Solutions Ltd, Hawthorne Lodge, Sutton Lodge Farm, Frolesworth Road, Broughton Astley, Leicester, LE9 6PG, and call us on 020 3936 9171 to explore our full range of services and start transforming your workplace today.