Companies to face fines for failure to provide contracts

More than half of UK employers don’t know whether their staff have a contract of employment, potentially putting them in breach of new legislation, lawyers have warned.

A survey of just under 2,000 UK employers by law firm Peninsula found that 52% couldn’t be certain that all their employees had contracts of employment.

A larger number of businesses (59% of respondents) said they were not even aware that employees were entitled to a contract after one month of employment.

The statutory disputes resolution procedures, which came into force in October 2004, introduced a penalty for failure to issue a contract of employment to all employees.

The direct penalty is two or four weeks’ pay. But Mike Huss, senior employment law specialist at Peninsula, said the consequences could be much more serious.

“The rule changes require that a contract of employment must, for the first time, contain the disciplinary procedures,” he said.

“If the contract does not contain procedures then the likelihood of an employer following them is small.”

This would give the initiative to the other side in a tribunal if the regulations had been breached, Huss said, and the tribunal could increase an award against an employer by up to 50%.

For a legal Q&A on statutory procedures for dispute resolutions go to


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