A recent LinkedIn poll asked a very simple question, but the results were a little surprising:
When were your contracts of employment last reviewed?
In the last three months was a response for 20% of the respondents. While a further 32% had reviewed their contracts in the last 12 months. I was a little surprised to see that, in total 52% of respondents had updated their contracts in the last year.
Surprised, but not surprised.
Actually, really pleased.
There were so many things going on in the world of people management last year that, apart from the legal changes which needed to be made, we found a lot of business owners were reviewing their policies and procedures and as a result updating their contracts to reflect their new realities.
So, what about the other 48%?
Well, 12% admitted to having updated their contracts in the last three years. These businesses probably need to take a step back and review what they are doing to attract and retain their staff. They need to ensure that their current practices are accurately reflected in their contracts so that they don’t accidently put themselves in breach of their own contracts. An example might be your work location for staff or the company sick pay policy.
That leaves 36%! The fourth option on the poll was “They are meant to be reviewed?” And yes, 36% of people selected this option. Were they being funny? Did they just select this option because there was no other suitable option? Did they genuinely think that once written a contract of employment was set in stone? I don’t know and would only be guessing.
So why do contracts need to be reviewed regularly?
Firstly, because the law changes over time, so it is important when issuing a contract, it is legally compliant.
Secondly, companies evolve and change policies, procedures, benefits and office locations. It is important that your contract reflects your reality.
Do you need to issue a new contract to every employee each time you make a change?
You’ll be relieved to learn that a full company reissue is not necessary. However, changes do need to be communicated. If someone has a change of job, a pay increase or improved benefits, you need to write to them to inform them of the change.
If you are moving office location or even closing down your office with everyone working from home, you need to consult with employees and agree the change of location and any specific requirements. You can’t just change someone’s contract without their permission. They signed to accept the terms you offered them originally, some changes can’t be made unilaterally.
If you are introducing new policies or updating policies, you need to understand whether the policy is contractual, or not. You may need to consult, you may be able to make the change and inform the staff. If you are not sure which the legal option is, make sure you get advice before making changes.