You’ve grown your business to the point where you need help. You’re about to take on your first employee. And you’re wondering: do I actually need a formal employment contract, or can I just agree the basics verbally and get on with it?
The short answer: yes, you need a written contract, and you must give it to the employee on or before their first day of work. Not within a month. Not within a week. Day one.
What the Law Says
Section 1 of the Employment Rights Act 1996 requires every employer to provide a written statement of employment particulars on or before the first day of employment. The Employment Rights Act 2025 added new requirements including updated SSP provisions (payable from day one), paternity leave (day-one right), and flexible working (day-one right).
If you don’t provide a written statement and the employee later brings a tribunal claim, the tribunal can award an additional 2–4 weeks’ pay on top of any other compensation.
What Must It Include?
The employer’s name and address. The employee’s name, job title, and start date. Place of work. Hours. Salary and payment frequency. Holiday entitlement. Sickness provisions including day-one SSP. Pension. Notice periods. Probation period. Disciplinary and grievance procedures.
What About Verbal Agreements?
A verbal agreement is legally binding but proving what was agreed is the problem. Without a written contract, the tribunal looks at customs and practices. The employee might claim they were told something different. A restrictive covenant you thought you’d agreed is unenforceable. A written contract costs very little and protects both parties.
Day-One Unfair Dismissal
The ERA 2025 is introducing day-one unfair dismissal rights, expected in 2027. Every dismissal from day one must be fair. This makes the employment contract even more important — it establishes the probation period, expected standards, and the process for ending employment.
➤ Get our Employment Contract Template — ERA 2025 compliant, 13 pages, editable Word.