Appendix 2 – The Employment Contract
I am neither a company lawyer nor accountant, so I provide this document for you to take to your professional advisors for advice as to whether it is fit for use. On that condition, and on condition that you acknowledge my role in creating it, you can use it free of charge.
LTD STATEMENT OF PARTICULARS OF EMPLOYMENT
This statement dated …………………………….. 2003 sets out details of the main terms of your employment with <<>>
Ltd (“the Company”) of …………………………………………………………………………………………………………………………………………………………., which are required to be given to you under the Employment Rights Act 1996. It replaces any previous terms and conditions of employment with the Company.
Employee:
Your name: «Name»
Collective Agreements:
There are no Collective Agreements affecting the terms of your employment.
Changes to Terms of Employment:
Any changes or amendments to the terms of your employment will be confirmed to you in writing within one month of them taking effect.
Employee Handbook:
The Employee Handbook is available for you to consult in the main office.
Commencement of Employment:
Your employment commenced on …………………………..
Continuous Employment:
Your continuous employment commenced on ………………………………
Job Title:
The title of the job which you are employed to do is: ………………………………
The Company may amend your duties from time to time, and, in addition to your normal duties you may from time to time be required to undertake additional or other duties as necessary to meet the needs of the business.
Place of Work:
You are based at ……………………………………………………………………………………………….
However, the nature of your employment requires you to travel to customer sites, depending on the Company’s business needs.
Remuneration:
Your will be paid remuneration is made up of a fixed Basic Wage, the opportunity to Purchase Shares in the Company, and Dividends on Shares bought.
(a) Basic Wage. Your Basic Wage for this financial year (……), including PAYE, employee’s NI, and any pension contributions, is £………
Share Transfer. The Company will transfer to the <<>> Ltd Employee Trust (“the Trust”) Ordinary Shares, not paid-up, in the Company on your behalf during the current financial year.
(b) The Shares issued to the Trust on your behalf will be:
a. «Number_of_Shares» in number;
b. «Exercise_Price» in value;
c. «Percentage_of_Co» of the Shares in the Company at the time of issue;If you leave the Company’s employment, the Trust will sell Shares, equal in value of the issue price of the shares, back to the Company, at the value at which they were issued if not revalued higher. If the value of the Shares is more than the issue value, you will be liable for any tax burden on the sale of shares back to the Company. If the value of the Shares is lower than the value you paid for them, then the Company will be liable for any tax payable by you in respect of that sale to the Company.
The Company shall have the option to purchase any remaining Ordinary Shares in the Company from you, on your leaving the Company’s employment. Otherwise, any remaining Shares issued to the Trust under the Share Transfer, and not repurchased by the Company, will be transferred into your name on your leaving the Company’s employment. Should you later wish to sell your shares, the Company shall retain the right of first refusal, at the price you have been offered. You will continue to receive dividends on Share owned by you after leaving the Company’s employment.
If you cease employment at The Company before the end of its financial year, the value at which the Shares will be repurchased from the Trust will be the price prevailing at the start of that financial year.
(c) Dividends. The Company will periodically (at the end of each financial year, quarter, or month) pay dividends to you on the Shares held on your behalf, according to the Profit of the Company and the Memorandum and Articles. Such dividends will be payable (and will be paid) to you directly, and not to the Trust, and you alone shall be entitled to receive them, or to take legal action to recover them in the event of their non-receipt.
(d) Monthly loans. In the event that dividends are declared at intervals of more than a month, the Company will lend money to you each month, at the rate of one-twelfth of the dividends that it is anticipated you will be paid at the end of the first year that the Trust holds the Shares.
Benefits:
You understand that your substantially reduced National Insurance payments will reduce your entitlement to claim for state pension and other state benefits.
Hours of Work:
You are required to work …… hours per week. Normal hours of work are from ……to …… , Monday to Friday.
Annual Holidays:
The holiday year runs from March to February.
Employees’ annual holiday entitlement in any holiday year is …… days, inclusive of all public holiday entitlement. Annual holiday entitlement accrues at the rate of 1/12th for each complete calendar month of service during each holiday year.
Part-time employees annual holiday entitlement accrues on a pro-rata basis.
Employees will be paid at their basic rate of pay in respect of periods of annual holiday.
In the event of termination of employment, employees will be entitled to holiday pay calculated on a pro-rata basis in respect of all annual holiday already accrued but not taken at the date of termination of employment.
If on termination of employment an employee has taken more annual holiday entitlement than he or she has accrued in that holiday year, an appropriate deduction will be made from the employee’s final payment.
Public Holidays:
Employees are entitled to eight public holidays each year, and will be advised of the relevant dates as early as possible. Employees should note that these public holidays form part of their annual holiday entitlement.
Where a recognised public holiday falls on a Saturday or a Sunday, alternative dates will be substituted for these. Employees will be advised of these as early as possible.
Employees may be required to work during recognised public holidays, depending on the needs of the business. Employees will be given as much notice as possible of such a requirement.
Employees who are required to work on a recognised public holiday will be paid double time.
Employees who work part-time are entitled to those public holidays that fall on one of their normal working days.
Further details of the rules in respect of annual and public holiday entitlement are set out in the Employee Handbook.
Sick Pay:
If you are absent from work because of sickness or injury you will be entitled to Statutory Sick Pay, provided you meet the qualifying conditions.
Pension:
The Company operates a stakeholder pension scheme which you will be entitled to join upon application.
Full details of the scheme can be obtained from ………………………………………..
A contracting-out certificate is not in force in respect of this employment.
Notice:
After being employed by the Company for a minimum of one month you are required to give one week’s notice to terminate your employment.
You are entitled to receive the following notice of termination of employment from the Company:
a) More than one month but less than two years’ continuous service: One week.
b) More than two years’ continuous service: One week for each complete year of service up to a maximum of 12 weeks after 12 years service.
The Company reserves the right to make payment in lieu of notice.
Disciplinary Rules and Procedure:
The Disciplinary Rules applicable to you are set out in the Employee Handbook. As they form part of the terms and conditions of your employment you are strongly advised to read them.
Appeal Procedure:
If you are dissatisfied with any disciplinary decision taken in respect of you, you may appeal to the Managing Director. Further details of the Appeal Procedure are set out in the Employee Handbook.
Grievance Procedure:
If you have a grievance relating to your employment, you should in the first instance raise this with your line manager. If the grievance is not resolved to your satisfaction you should refer to the Grievance Procedure set out in the Employee Handbook.
Uniforms:
Any employee required to wear a uniform will be supplied with one at the Company’s expense. Employees are expected to take vane of the uniform and to maintain it in a reasonable condition. The Company reserves the right to deduct the costs of replacing or repairing any uniform damaged as a result of the employee’s actions from his or her wages.
The employee will return his or her uniform at the termination of employment. The Company retains the right to deduct the cost of any uniform/clothing that is not returned, or is returned in a damaged condition due to actions of the employee, from the employee’s final wage.
Restrictive Covenant:
Confidentiality:
(a) The details of this contract, including your remuneration package, are confidential between you and the Company and should not be disclosed to any employee of the Company unless you are required to do so by the Company. Any employee found to be in breach of this covenant may be subject to disciplinary action.
(b) You are aware that in the course of your employment you will have access to and be entrusted with information of a confidential nature including, but not limited to:
i) Details of the Company’s past, current and potential clients and suppliers and the Company’s dealings and transactions with them,
ii) Sales and financial data, research, budgets and performance information concerning the Company and its clients,
iii) Unique ideas for the financial or sales schemes or otherwise for the Company.
iv) Details of the past, current and potential employees of the Company and its clients.
(c) You shall not (except in the proper course of your duties) during or after your employment with the Company divulge to any other person or otherwise make use of (and shall use your best endeavours to prevent the publication or disclosure of) any trade secret or confidential information concerning the business or finances of the Company or any of its suppliers, agents or clients.
(d) All notes and memoranda of trade secrets or confidential information concerning the business or the finances of the Company or any of its suppliers, agents, employees, or clients which are acquired or made by you or any other employee of the Company during your employment shall be the property of the Company and except when required in the course of your duties, you will not retain copies in any medium, of any document or record, relating to the business of the Company or its clients, agents, suppliers or employees. On termination of your employment or at any time upon the request of a Director, you shall surrender all notes and memoranda of any information relating to the Company, its clients, suppliers or employees.
Acknowledgement:
I acknowledge receipt of this statement. I have been shown the Employee Handbook. I confirm that I have read and understood this statement and the Employee Handbook, which set out the principal rules, policies and procedures relating to my employment that I agree to abide by throughout the course of my employment.
Signed by the employee ………………………………………………………..
Date …………………………………