Contracts of Employment
Business: Cambridge International GCSE (2027 Exams), topic 2.1.1
Contracts of Employment
A contract of employment is a legal agreement between a business and an employee. It contains information on the pay of the employee, their roles, the start and end date of their employment and the hours they will work. It also gives information on sick leave, holiday pay and maternity or paternity leave. There are different types of employment (and contracts):
Part-time
- A part time contract is a form of employment where people work less hours per week than people with a full-time job.
- These employees usually work in shifts and usually work under 30 hours per week.
- Part-time employment contracts can be better for both businesses and employees because they offer more flexibility. If the business is only busy at certain times of the week or certain months in the year then part-time contracts can be helpful.
Full-time
- A full-time contract is a contract where the employee will work a minimum number of hours. This number is defined by the contract.
- Full-time employment contracts give businesses more control over the hours that employees work. Employees work a minimum number of hours each week and this gives businesses and employees certainty.
- For employees, although part time contracts offer greater flexibility, full time contracts offer certain benefits that are not typically offered by part time contracts.
Job share
- A job share happens when two people share a full-time job.
- This is good because it gives the employees more flexibility and for a business, it guarantees the number of hours that will be worked.
- But, organising a job share can be hard and it requires very good communication between the two employees and the business
Zero-hour contracts
- Zero-hour contracts are contracts where a business does not have to give a person any work at all and the employee doesn’t have to accept any work offered to them.
- They are beneficial for businesses because they provide the maximum amount of flexibility. This means they are less likely to waste money on unnecessary labour costs.
- However, they can be bad for employee motivation because the employees won’t feel a high level of commitment to a company.
Main contents of a contract
- The duties and responsibilities of the employee.
- The working hours that the employee is required to complete.
- The employee’s holiday entitlement.
- In the UK, employees are legally entitled to 5.6 weeks of paid holiday per year (which is equivalent to 28 days for someone working a five-day week).
- The sick pay arrangements provided by the business.
- If employees are off sick for more than three days in a row, they are entitled to Statutory Sick Pay (SSP) for up to 28 weeks.
Test yourself on Contracts of Employment
What information does a contract of employment contain?
What type of contract would be most useful for a business that is only busy at certain times of the week or certain months in the year?
Which of these is an employee benefit of full-time contracts compared to other types?