Discover these 7 types of employment contract

It’s vital that all UK organisations know the types of employment contract valid in UK law. Human Resources teams are an essential ingredient in the hiring and contracting processes for employees. As part of the strategic role of HR teams, it’s crucial to define the most appropriate contract of employment types, while considering the duration and cost of the employment contract to ensure resources are managed efficiently and effectively. 

Read on to discover types of employment contract in the UK.

1. Fixed-term contract

In the UK, fixed-term contract employees should be treated the same as full-time permanent staff. In a fixed-term contract, the relationship between employee and employer is established for a defined period that is set in advance. This type of employment may also end when a specific task is completed, or a specific event takes place. A worker isn’t classed as an employee if their contract is with an agency they work for rather than the company. If an individual has had a fixed-term contract for two years or more–they acquire the same redundancy rights as a full-time permanent employee.

2. Full-time or part-time contract for an indefinite period

A permanent employee contract is the most common employment contract for an employee in the UK. Employers must give their employees a written statement of employment or an agreement which should include at least a statutory minimum of paid holiday. A contract should include the terms of work including rights, conditions, responsibilities and duties.

Both parties have the right to terminate the contract by an employer or employee giving notice or by an employee being dismissed. 

3. Agency staff or temporary employment contract

As an employer, you can hire temporary staff from an agency to meet an urgent need or a transient increase in demand for your product or services, such as Christmas. Employers should provide the agency with information about the business terms and conditions so that they can provide the worker with terms. Temporary agency workers should receive the same conditions as permanent employees after 12 weeks.

4. Zero Hours Contracts

Zero hours employment contracts are usually for work that needs to happen on a sporadic basis, so workers may be ‘on-call’ to come in and an employer does not have a set or defined amount of work to give. Zero hours workers are entitled to statutory annual leave. The contract is usually only for workers to be on call when you need them and workers do not have to come in when asked, only if they are available.

5. Self-employment contract

A self-employed worker isn’t an employee of the organisation they’re  working for, but works for themselves and is responsible for the success or failure of their own business. If an organisation continuously works with a self-employed worker, they can be characterised as self-employed by being fully responsible for defining their work activities. They will probably use their own tools or assets, and can decide what work they do and when they do it.

6. An internship employment contract

An intern could be considered to be a volunteer, a worker or an employee. If an intern does regular work, they could be viewed as an employee and gain employment rights. If an intern is considered a worker, they will be entitled to the National Minimum Wage. Voluntary workers do not get paid. Students required to do an internship as part of their higher education course are not entitled to a minimum wage.

7. Apprentice agreement

An apprentice must sign an apprentice agreement giving details of the skills, trade or occupation the apprentice is being trained for and the amount of training that the apprentice will be given. It provides the employment details of the apprenticeship. Anyone aged over 16 who is not currently in full-time education can apply for an apprenticeship. 

When you review the types of employment contracts available, it’s easy to see the benefits of digital HR. Organisations can help improve employee onboarding and contract experiences by streamlining manual processes using Digital tools. DocuSign eSignature enables future employees to review and sign contracts securely from almost anywhere across the globe, and sign on their mobile. DocuSign CLM helps to optimise the employee hiring and onboarding process by automating employment contract and agreement workflows and centralising employee agreements so that they are easy to search and retrieve.

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