Employment contract review is an important step for employers who want to reduce disputes, keep written terms up to date and make sure staff documents still reflect how the business actually operates.
Employment contracts are often prepared when an employee first joins the business and then left untouched for years. During that time, roles may change, pay arrangements may develop, working patterns may evolve and new policies may be introduced.
If the contract is not reviewed, the employer may later discover that key terms are unclear, out of date or missing altogether.
Why employment contract review matters
An employment contract sets out important terms between the employer and employee. It may include pay, hours, duties, workplace location, notice, holiday, benefits, confidentiality, restrictions and other workplace rules.
Government guidance explains that employees and employers must stick to the contract until it ends or until terms are changed, usually by agreement. This makes it important that the written terms are accurate and suitable for the business.
A poor contract can create uncertainty. It may be harder for the employer to manage duties, change working arrangements, enforce notice periods or deal with disputes over pay and benefits.
Outdated job titles and duties
One common issue found during employment contract review is that the employee’s role no longer matches the written contract.
The contract may describe an old job title, outdated reporting line or duties that no longer reflect the work being carried out. This can cause problems if the employer later wants to manage performance, change responsibilities or restructure the business.
Employers should check whether job descriptions and contractual duties are still accurate. The contract does not need to list every task, but it should give enough clarity about the nature of the role and any reasonable flexibility required.
Unclear working hours
Working hours are another frequent source of dispute. Some contracts state basic hours but do not deal properly with overtime, shift changes, weekend work, travel time or flexible working arrangements.
Where employees work different patterns in practice, the contract should be checked carefully. An employee may argue that the working pattern has become part of the agreed terms if it has been followed consistently over time.
Employers should also check whether the contract deals clearly with part-time work, hybrid working, remote working and any expectation to work additional hours when needed.
Pay, bonus and commission gaps
Pay terms should be clear. Problems often arise where bonus, commission or incentive arrangements are described informally or spread across several documents.
Employers should review whether the contract explains:
- basic salary or hourly pay
- when wages are paid
- overtime arrangements
- bonus or commission rules
- whether payments are discretionary or contractual
- what happens during notice, sickness or leave
- whether deductions can be made lawfully
Unclear wording can lead to disagreement, especially when employment ends or when the employer wants to change a bonus or commission arrangement.
Workplace location and mobility
An employment contract review should include the place of work clause. This is especially important where the business has moved sites, introduced hybrid working or expects employees to work at different locations.
If the contract only names one fixed workplace, the employer may have less flexibility to require a move. A mobility clause may help, but it should be clear and reasonable.
Employers should avoid relying on vague wording that does not reflect how the business operates. If employees may need to work from home, attend client sites or move between offices, the contract should deal with this properly.
Missing flexibility wording in the employment contract review
Some contracts give the employer very little flexibility. Others include flexibility clauses that are too wide, unclear or unrealistic.
Acas guidance says employers must only use flexibility clauses to make reasonable changes. It also warns that an employer may be in breach of contract if it tries to make unreasonable changes, fails to consult or does not give reasonable notice.
Employers should review flexibility wording carefully. A clause should support sensible business needs, not suggest unlimited power to change terms without discussion.
Notice periods and garden leave
Notice clauses should be clear and suitable for the role. A notice period that was appropriate when the employee joined may no longer be suitable if the employee has become more senior or has access to important clients, staff or confidential information.
Employers should check whether the contract deals with garden leave, payment in lieu of notice and what the employee can and cannot do during notice.
Without clear wording, it may be harder to protect the business when an employee resigns or is dismissed.
Confidentiality and post-termination restrictions
Contracts should protect confidential information, but many older contracts use generic wording that may not reflect the employer’s real commercial risks.
Employers should consider whether the employee has access to client information, pricing, trade secrets, business plans, supplier information or other sensitive material.
Post-termination restrictions should also be reviewed carefully. Restrictions that are too wide may be difficult to enforce. Restrictions that are missing may leave the business exposed when a senior employee leaves.
Policies and contract wording in the employment contract review
Employers should check whether the contract and staff policies work together. Problems can arise where the contract says one thing and the handbook says another.
For example, sickness absence, disciplinary procedures, expenses, overtime, remote working or bonus arrangements may be dealt with in both the contract and policies. If the wording is inconsistent, disputes may follow.
Employers should be clear about which terms are contractual and which policies are non-contractual guidance that may be updated from time to time.
Changes must be recorded properly
An employment contract review may show that terms need to be updated. If changes are made to an employee’s main written terms, they must be confirmed in writing within one month of the change.
Acas says it is a good idea to put all contract changes in writing so everyone is clear about what has been agreed and there is less chance of misunderstanding.
Employers should not rely on informal conversations where important terms are changing. Written confirmation helps protect both the business and the employee.
Practical checklist for employers
When carrying out an employment contract review, employers should ask:
- Does the contract reflect the employee’s current role?
- Are pay, bonus and commission terms clear?
- Are working hours and overtime properly covered?
- Does the place of work clause reflect current arrangements?
- Is flexibility wording reasonable and useful?
- Are notice and garden leave clauses suitable?
- Is confidentiality wording strong enough?
- Are any post-termination restrictions needed?
- Do the contract and handbook say the same thing?
- Have any agreed changes been recorded in writing?
Getting the employment contract review right
Employment contract review should not be left until a dispute has already started. Employers are in a stronger position when contracts are clear, current and suitable for the way the business works.
A review can identify gaps before they become problems. It can also help employers update contracts in a structured way, rather than making informal changes that cause confusion later.
Employers Law helps employers review contracts, update written terms and deal with contract changes. If your staff contracts are old, unclear or inconsistent with current working arrangements, early advice can help reduce risk.
For practical help with written employment terms, visit our contracts of employment page. For wider support, Employers Law also provides free employment law advice for employers across a full range of workplace issues.