Employment Contracts

As any business starts to expand, there comes a point where it is necessary to take on extra staff. Permanent employees will work full-time or part-time and must, by law, have a written statement of their main terms of employment. 

The following responsibilities apply in all cases:

  • The workplace must be safe and secure; this may include travel to and from properties, and while in attendance at the properties, that will be the workplace.
  • Employer’s liability insurance must be in place.
  • Employers must register with HM Revenue & Customs to administer a payroll system.
  • Employees are entitled to paid holidays, the minimum wage, and a maximum working week.
  • Staff are entitled to statutory sick pay after being absent for three days.
  • Staff are entitled to maternity and paternity leave.
  • Employers must consider requests for more flexible working practices for parents.
  • Employers must avoid discriminatory behaviour (including age discrimination).

Agency by estoppel

Estoppel is a legal term meaning that a person is precluded from denying the truth of a statement of fact previously asserted. This means that where one person has acted to lead another person to believe he has authorised a third party to act on his behalf. That person, considering this, enters into a transaction within the scope of the authority; the first person is estopped from denying the agency. The fact that the agent may not have had express authority is immaterial.

For instance, a tenant may be told by a landlord to contact the agent regarding the defective heating. If the agent arranges a repair, the landlord cannot claim that he is not bound by what the agent has done and will be liable for the cost of the repair.

Good employment practice is essential for any agency. It requires producing clear policies, rules, and procedures for all staff. These policies include health and safety, helping employees understand their legal obligations, what their employer expects, and how they should carry out certain activities. They also advise employees of the rules and rewards available to them.

Key points around employment

A contract of employment is the basis of the employment relationship. Most employment contracts do not need to be in writing to be legally binding, but it is better if they are. A contract 'starts' as soon as an offer of employment is accepted. Starting work is evidence that the employee has accepted the terms and conditions offered by the employer.

Agency staff are legally entitled to a Written Statement of the main terms and conditions of employment within two calendar months of starting work. This should include details like pay, holidays and working hours. Most terms of an existing employment contract can be varied only with the agreement of both parties.

Some might assume that an employment contract consists only of things set out in writing between an employer and an employee. It is true that many of the main issues, such as pay and holidays, are usually agreed upon in writing. However, contracts are also made up of terms that have not been spelt out. This is often because they are:

  • too obvious to mention
  • pay and bonus structures that were discussed at the interview
  • necessary to make the contract work
  • custom and practice for that type of business

A written contract should cover the main areas, particularly individual employment responsibilities. A contract will save a lot of potential misunderstandings further down the line and should provide for managing disputes and grievances, and termination of employment.

Staff handbook

The employer can vary non-contractual policies and procedures without needing to obtain the consent of the staff. It is common to set these out in a staff handbook. This would include where to find the health and safety policy, lone working arrangements, systems, limits of authority, etc. It should also explain the employer's requirements for ongoing training.

Some businesses make their staff handbooks part of the contract of employment. This is not ideal for two reasons. First, if an employer fails to follow a policy/procedure (either deliberately or inadvertently), that would give the employee a claim for breach of contract on top of any other claim they might have (e.g. unfair dismissal, discrimination, etc.). Second, as businesses evolve, policies and procedures change - if they form part of the employee's employment contract, all employees' consent may be required for any changes.

Training

An employer will be liable to third parties for the acts and omissions of the employees for anything they do during their employment. This is called vicarious liability. Ignorance is not a valid defence in law. The ongoing professional development of staff at all levels of agency work should be a part of the business policy. Residential letting and management law is complex, and staff will require information and training. Failure in this area can leave the business at risk.

All frontline staff will require Rent Smart Wales training as a condition of any licence (for which see later).

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