A LEGAL expert has explained some of the common mistakes startups make when drafting employment contracts – and how to avoid them.

Comfort Nkang, Practice Leader of the employment team at commercial law firm LegalVision, is encouraging bosses to pay close attention to detail when formally offering a new role.

As the starting point for a new working relationship, it’s crucial that everything is set out clearly, she says.

Mrs Nkang, who is based at LegalVision’s Manchester head office, said: “Employment contracts are important documents as they set out the rights, duties and responsibilities of your new hires.

“The contracts also contain the employment conditions, setting out what will happen if issues arise during the employment relationship. Vitally, they are there to offer protection to both parties.

“It’s relatively easy for a new business to overlook key aspects of an employment contract but it pays to get everything correct at the start.”

There are basic legal requirements you must consider before drafting an employment contract.

In England, these include ensuring that the employee’s pay is at least the national minimum wage, checking whether the employee qualifies for automatic enrolment into your workplace pension scheme, and deciding what their holiday entitlement will be – and whether it includes public holidays.

Mrs Nkang continued: “Before an employment contract is issued to a successful candidate, most companies will usually send an offer letter to the candidate which sets out key information about the role such as the job title, pay, and working hours.

“Once the offer has been negotiated and the terms accepted, when drafting the employment contract you should remember to point out that the terms in there override any previous offer or statement made to the candidate. This will avoid any misunderstanding in the future.

“Some people think employees’ contracts are one-size-fits-all, but this is not the case. They should be tailored based on the employee’s role and their seniority in the company.

“For example, a simple employment contract for a junior employee may not be suitable for a senior staff member or executive.

“This is because it is unlikely to contain the necessary post-termination restrictions to protect your business.”

Some employers include restrictive covenants in their employment contracts which sets out constraints if someone leaves the company, such as preventing them from working for a competitor for a limited period of time.

Whilst the post-termination restrictions are usually in place to protect the company’s confidential information, workforce and trade secrets, they must be reasonable.

LegalVision’s Mrs Nkang added: “Your restrictive covenants must only include what is necessary to protect the interests of the business.

“Employment contracts should also be kept up to date, which includes amending details such as salary and the job title to reflect a promotion.

“However, some time and effort can be saved by sending the employee a letter confirming these changes instead of updating the main contract.”

LegalVision is a commercial law firm that provides businesses with affordable and ongoing assistance through their industry-first membership scheme.