Permanent full-time employment contracts are the most common type of contract in the UK. It implies that each worker will be hired to work a specific number of hours (typically 35+, yet there is no minimum set number) and is entitled to a range of benefits provided by the employer.
For an employer, full-time employment contracts establish a mutual relationship whereby you are committed to the employee and they to your business. There will generally be a notice period if an employee decides to leave the company, allowing you time to replace them and in most cases, they will be entrusting their career with you. This means that they’ll be likely to work hard, be loyal and aim to impress so that they might progress and become an instrumental part of the company. Full-time employment contracts are beneficial to both employers and employees and they’re common because continuity in business helps progress the brand and create a cooperative workplace.
What Are The Benefits Of Full-Time Employment Contracts For Employees?
There are many reasons why full-time employees make up the majority of the UK workforce. Job security is a leading reason. Although a full-time employment contract doesn’t mean you can’t be let go, there need to be valid reasons and procedures followed to ensure it’s lawful.
You may also be entitled to standard employee benefits which include:
- Statutory sick pay
- Holiday pay starting at 28 days paid leave per year for most full-time workers
- Pension scheme
- Paternity/Maternity leave and pay (including adoption leave)
- Right to request flexible working
Employee rights must also be adhered to, which include:
- Being paid at least National Minimum Wage and being protected from having wages unlawfully reduced during employment
- Regular rest breaks (can vary depending on the type of work)
- To work no more than 48 hours per week unless you officially opt out of this right
- Protection against discrimination
If an employee is dismissed it may either be fair or unfair. If you suspect you have been unfairly dismissed then you can take legal action against your former employer. For example, if you suspect you have been let go because you became pregnant or if your position became unstable and you were entitled to redundancy rather than dismissal.
What Are The Benefits Of Full-Time Employment Contracts For Employers?
Whilst temporary employees, contractors, freelancers or employees on fixed-term contracts may be assets for busier periods or to bring specific skills to specific projects, full-time employees bring many benefits.
There are many benefits of full-time employment contracts for employers, here are just a few:
You will have many responsibilities to meet when hiring a full-time employee. However, this is a two-way relationship. When the right person joins your business they’ll likely be hoping to build a career with you. These days, most people are seeking a job they love so if they’ve chosen to work for you they’ll likely be loyal, dedicated and keen to prove themselves an asset.
Investment and Progression
When you make investments in permanent employees then you reap the benefits. Any extra training you provide, employee teambuilding days and qualifications you put them through should improve the quality of their work and keep your business moving forward.
Culture in the workplace is very important. A positive work environment keeps employees happy which keeps them motivated. For this, relationships need to be nurtured. Shared goals and friendships can keep everybody working cohesively. Strong workplace culture is easier to establish and nurture with a majority of permanent employees as they’re looking to build a second home in your company.
Notice and Negotiation
If an employee does decide to leave your business then they will usually have to give notice by the terms of their contract. This means you have time to replace them and perhaps even time for them to train up someone else to fill their role. Moreover, if you would rather your employee stay working with you, you have the opportunity to address their reasons for leaving and possible renegotiate their contract so that you may hold on to them.
Long-term it is more cost-effective to employ full-time staff. Many businesses, especially new businesses, may look to employ part-time or freelance staff as fewer hours can keep costs manageable. However, if you have enough work to hire full-time then doing so may save you money in the long run. This is because temporary staff and outsourcing are usually done at a higher hourly rate and, although you may not have to offer all the same benefits, there are still costs of hiring. The security and rights that come with full-time employment generally drive down the hourly rate.
What Are The Disadvantages Of Full-Time Employment Contracts For Employers?
There may be cases when you need to share the workload or hire someone to manage an area of your business and you’ll consider hiring a full-time employee. Whilst this is a popular solution and has many benefits, there are some disadvantages to consider in full-time employment contracts.
Cost Of Employing Staff Full-Time
We’ve already mentioned this as a benefit but there are downsides too. A full-time employee can cost you more if their expertise are not needed consistently throughout the year. For example, if you are developing an app that you hope to launch in 6 months then it may be wiser to outsource than offer an app developer a full-time contract when you may not have anything for them to do when the project is completed. Similarly, you may need some social media support but there may not be 35 hours worth of work a week, in which case part-time or freelance work may be preferable and more cost-effective. Don’t default to full-time employment contracts without considering the cost long-term.
Although remote working is becoming more common, most employees will expect an office they can work in, even if you offer working-from-home. Therefore, when your hire permanent staff you will have to have a place for them to work and that comes at a cost.
As an employer, you will have to meet obligations and ensure you know and enforce the rights of your employees. You must provide:
- A written contract or statement of employment
- The National Living Wage, National Minimum Wage or higher
- Payslips showing deductions of National Insurance contributions, student loan repayments, pension contributions, and tax payments
- Statutory levels of holiday pay
- Statutory Sick Pay
- Maternity, paternity, and adoption pay and leave
You must also ensure that:
- Employees do not work longer than the allowed maximum
- Payment rates are fair and appropriate
- They hold the correct liability insurance to cover their employees
- The working environment is safe and secure
- Payroll, tax, and NICs are registered with HM Revenue and Customs
- Flexible working requests are given fair consideration
- Discrimination in the workplace is not acceptable
- The business premises are suitable for any disabled employees
As with any decision, particularly for a small or new business, it’s wise to look at all the options. To consider the advantages and disadvantages of full-time employment contracts compared to other types of employment. Taking on full-time employees is a big commitment and it’s important to recognise that the employee is trusting you with their career as well as their financial security. Full-time employees can help grow and shape your business, bringing new ideas, skills and approaches.
How To Draft Full-Time Employment Contracts
When employing permanent staff you’ll have to present them with a full-time employment contract. This isn’t a terribly complicated document but there are some important things to consider. Aside from the above obligations and details of the job role, you may want to include non-compete and confidentiality clauses to protect your intellectual property and company information.
An HR Manager might draft full-time employment contracts but many business owners will refer to a lawyer to create these contracts. Whether a template is drafted which works for roles across the business or if you just consult a lawyer for employment contracts of high-level executives and directors, the right lawyer can aid your employment process.
If you are seeking a lawyer to draft full-time employment contracts, check out rates for employment contracts here.
The above is intended as guidance only and does not substitute legal advice. Please browse our existing Employment Contracts services or get in touch with LegalDrop via our contact page if you need assistance.