But I never read the contract!

All in the contract

In September 2015 Protecting.co.uk issued the results of its findings on employment contracts. According to its research, only 0.6% of employees have ever read their employment contract from start to finish. Indeed, the majority it asked (some 909 employees) stated that they had not read any of their contract (or couldn’t remember doing so). Others admitted that they had only glanced over the important bits, like pay, benefits, working hours, annual leave and sick pay.

Why aren’t they read?

There are many reasons why employees don’t read their employment contracts when they are issued. For example, some think that these documents are all the same, boring, too long-winded, etc. Employees who are introduced to employers by recruitment agents often go on what the recruitment agent tells them about the employer’s terms and conditions of employment - and it’s not unknown for some of these agents to put candidates under pressure to return an employment contract by a particular date.

Bound by the terms?

So let’s suppose one of your employees hasn’t read their employment contract - either in part or in full - but they have signed and happily returned it to you. Are they bound by the terms and conditions it contains or can they plead ignorance at a later date? The starting position is that having put their name on the dotted line an employee is bound by all the terms and conditions.

The statutory exception

However, there are some exceptions. Firstly, if a contractual term seeks to override one or more of the employee’s statutory rights it will always be unenforceable. Statutory sick pay (SSP) is a good example. If a signed employment contract states that there is no entitlement to sick pay during any period of sickness absence, yet the employee actually qualifies for SSP, the employer can’t insist that the employee is bound by the agreed contractual term, i.e. it must pay the employee SSP.

Other sticking points

A contractual term will also be unenforceable if it is: (1) discriminatory in some way, e.g. it seeks to penalise a parent for taking paternity or parental leave; (2) unlawful, e.g. it’s designed to avoid tax or NI contributions; or (3) against public policy.

Tip 1. Honest employers like you are unlikely to be caught by any of the above categories. Therefore, where one of your employees has signed their employment contract they’ll usually be bound by the contents whether they read it or not.

Tip 2. Some experts say that employers should include a covering list that highlights the most important clauses when they issue an employment contract. However, we believe that this practice can be misleading - such a list suggests that these are the only terms the employee needs to be aware of. The much better option is to state in writing that this is a legally binding document and the employee should seek legal advice if they are unsure of the effect of the contents. If they don’t, that’s their problem.