An employment contract sets out the relationship between you and your employer, including your pay, responsibilities, benefits, notice period and any restrictions that may apply if you leave. Some terms may have a significant impact on your future career, particularly if you are joining in a senior or commercially sensitive role.
Reviewing your contract carefully before signing can help you identify anything unexpected and give you the opportunity to raise questions or negotiate terms before you are committed.
Check your salary, bonus and benefits
Your contract should clearly explain how much you will be paid and how often.
If your package includes additional benefits, check exactly what you are entitled to. These might include:
- A bonus or commission
- Pension contributions
- Private medical insurance
- A company car or car allowance
- Share options or other incentives
- Enhanced holiday or family leave benefits.
Pay particular attention to bonuses. Some are contractual (so are legally binding and must be paid if specific criteria are met), while others may be described as discretionary (payment is not guaranteed but there may still be a right to receive them if there is a reasonable expectation based on past practices). The specific wording can affect whether you have a right to receive a payment and what happens if you leave before a bonus is paid.
Understand your role and responsibilities
Your job title may be clear, but you should also review how your duties are described.
Some contracts contain broad flexibility clauses allowing an employer to change responsibilities or require you to perform other duties.
This may be reasonable, particularly in senior roles, but you should understand how much flexibility you are agreeing to and whether the wording reflects the job you believe you have accepted.
Look carefully at your place of work
Check where the contract says you are expected to work.
This can be particularly important if you have agreed hybrid or remote working arrangements. Make sure any important working arrangements are reflected accurately in the contract or another written agreement.
You should also check whether the employer has the right to require you to work from another office or relocate.
Review your working hours
Your contract should explain your normal working hours and whether you may be required to work additional hours.
Consider whether the wording matches what was discussed during recruitment.
Senior roles sometimes include wider flexibility around working hours, travel or availability. It is worth understanding these expectations before you start.
Check your probation period
Many employment contracts include a probationary period at the start of employment.
Check:
- How long probation lasts
- Whether it can be extended
- What notice period applies during probation
- Whether any benefits are affected
- What happens when probation is successfully completed.
A probation clause should give you a clear understanding of how the early stages of employment will operate.
Understand your notice period
Notice provisions determine how much notice you or your employer must give to end the employment relationship.
Longer notice periods are common for senior employees, but they can work both ways. A long notice period may provide greater financial security if your employer terminates your employment, while also making it harder for you to move quickly to a new job.
Check whether the contract also allows your employer to make a payment in lieu of notice or place you on garden leave.
Pay attention to restrictive covenants
Restrictive covenants are particularly important because they can affect what you are able to do after leaving the business.
Your contract might include:
- Non-compete clauses, restricting you from working for a competitor
- Non-solicitation clauses, restricting you from approaching former clients
- Non-dealing clauses, restricting you from doing business with certain clients
- Non-poaching clauses, preventing you from recruiting former colleagues.
These restrictions can sometimes be enforceable, particularly where they are designed to protect legitimate business interests (such as confidential information/trade secrets, customer connections etc.), and are no wider than reasonably necessary in scope (typically assessed by looking at geography, duration and activities restricted).
If a restriction could prevent you from taking up another role, working with important clients or setting up your own business, it is sensible to seek legal advice before signing.
Check confidentiality obligations
Most employment contracts include obligations relating to confidential information.
These may apply both during and after your employment and can cover information such as:
- Customer lists
- Pricing
- Financial information
- Business plans
- Product development
- Commercial strategies.
Make sure you understand what information the employer considers confidential and how your obligations continue after leaving.
Consider intellectual property rights
If your work involves creating designs, software, written materials, inventions, processes or other intellectual property, review the ownership provisions carefully.
The contract may give your employer rights over work created during your employment and could include obligations to sign further documents to protect those rights.
This can be particularly important if you undertake creative or technical work outside your employment.
Check what happens to commission, shares and incentives if you leave
If part of your remuneration depends on commission, bonuses, shares or long-term incentive arrangements, your contract may not contain all the relevant terms.
Separate scheme documents may determine what happens when your employment ends.
It is worth understanding whether leaving could mean losing unvested shares, bonuses or other benefits and whether different rules apply depending on how your employment ends.
Make sure verbal promises are reflected in writing
If an important term was agreed during recruitment, do not assume it automatically overrides the written contract.
This could include promises about:
- Salary reviews
- Hybrid working
- Bonuses
- Promotion opportunities
- Working hours
- Location
- Additional holiday.
If a term matters to your decision to accept the role, it is usually better to ensure it is recorded clearly in writing.
When should you seek advice on an employment contract?
You may want legal advice where the contract contains complex or unusually restrictive terms, particularly if you are joining at a senior level or moving within a competitive industry.
Advice before signing can be particularly useful if you are concerned about restrictive covenants, notice periods, bonuses, share incentives, confidentiality or intellectual property provisions.
DTM Legal’s Employment & HR team advises employees and senior executives on employment contracts and restrictive covenants, helping you understand your rights, obligations and the practical effect of the terms you are being asked to accept.
If you have been offered a new employment contract and would like advice before signing, contact DTM Legal’s Employment & HR team to discuss the terms and any concerns you may have.