Working Arrangements:Contracts of Employment

BTEC First in Business

Objectives

To understand the basis of employment contracts agreed between employers & employees

To understand the importance of flexibility and why working arrangements may need to change

To understand what effects change may have on the business

Employment Contracts

By law, employees are entitled to an employment contract

This is a FORMAL agreement which outlines the TERMS & CONDITIONS of the job

Employers and employees have to have to obey these terms and conditions – it is unlawful to break them without both parties agreeing

Terms & Conditions

TERMS & CONDITIONS

The number of hours the

employee is expected to work

The type of employment; Full

or part time?

The pay and benefits provided to the employee by the employer

The place the employee will

work

In more detail…The place of work

This could be the company’s building, offices, shop, factory etc.

Some employees work from home– Shop owners, farmers, teleworkers

Mobile workers– Move from place to place (e.g. sales rep, a personal

trainer etc)

In more detail…Types of Employment 1

Permanent employment– No limit on length of time a worker is employed for– They work for a business until they leave

Possible reasons for leaving– To move to another job– If they break their contract of employment– If they are made redundant– Retirement

In more detail…Types of Employment 2

Temporary employment– Employees are employed for a limited period

Why do businesses have temporary staff?– To cover busy periods

Shops during Christmas Farmers during harvest

– To cover for absent staff Maternity leaver, long-term illness

– To carry out a “one off” task Installing a computer system

In more detail… Full & Part-time work

Full time– People who work the full working week of a

business.– The EU Working Time Directive suggests it should

be no more than 48 hours per week Part time

– People who work only a proportion of the working week (e.g. less than 30 hours)

– They give the company flexibility

In more detail… Hours of work

It is not only whether somebody is Full-time or Part-time that dictates how many hours they work:

– Shift work e.g. 8am-4pm, 4pm-12am, 12am-8am Usually 24hour businesses/services

– Flexitime – they have to work an agreed number of hours per month, but can work at any time during the day

– Overtime – When businesses want their employees to work more hours than agreed in their employment contract

Usually have to be paid a higher hourly rate– Breaks – By law, employees are entitled to breaks during their work.

Either days off, number of hours per working day

In more detail… Pay

A contract of employment states the rate of pay whether it is a salary or a wage:

– Wage – paid weekly/monthly, by the hour e.g. £5ph– Salary –paid monthly, shown as an annual salary

figure e.g. £20,000p.a.

The contract may also include bonuses or commission– A bonus is the amount paid if a target is reaches– Commission is an amount paid to each employee for every

item/service they sell

In more detail…Benefits

The benefits offered by the organisation are also included in the employment contract

These can include– The number of days of paid holiday– Private health care– Insurance– Company car

How can changes in the contract affect both the employer and employee?

Tonight you need to work an extra 4 hours

so that we can get that order in on time

I have a letter saying that my working hours

are 9am-5.30pm. It also says that I will be guaranteed overtime if I work outside those

hours.