Employment contracts in the equine industry
There is often confusion about employment contracts in the equine industry, and it’s very easy for both employers and job seekers to make mistakes that at the least can be a source of misunderstanding and dissatisfaction and in the worst case scenario, can have serious legal and cost implications which potentially can be devastating further on in time.
There seems to be a not uncommonly held perception within the equine industry that an employment contract is somehow optional or not relevant to the world of equestrian employment! For absolute clarification, this is not so and, not to put a too finer point on it, in the eyes if the law ignorance is no defence. That being said, obtaining and then understanding the correct information is not always straightforward. To assist all concerned, in this article we describe as simply as possible:
- What an employment contract is
- When the employment contract is given
- Who should receive an employment contract
- Examples of illegal employment contracts
- What happens when an employment contract is broken
Obviously, we are not legal experts, but we are experts in equine recruitment, so the following information is for guidance only. We always advise taking expert legal advice on your specific circumstances.
What is an employment contract?
According to UK employment laws, as soon as an employee accepts a job offer they have a ‘contract’ with their employer. They do not need to have signed any documents or even have started work – the verbal acceptance of a job legally marks the start of the employment contract, in other words, an employment contract doesn’t have to be written down in order to legally exist!
By default, the acceptance of a job offer triggers a contract that contains relevant statutory rights of the employee, for example:
- a right to receive a written statement of the terms of employment (known as a Written Statement of Employment Particulars)
- a right to an itemised pay statement (payslips)
- a right to maternity leave
- a right to pay in compensation for being made redundant
- a right not to be unfairly dismissed
The absence of a written contract does not remove these statutory rights and any contract, verbal or written, that takes away or denies any of these statutory rights is not legally enforceable.
Likewise, there are implied terms that come automatically with employment:
- mutual obligations not to do anything that might undermine the relationship of mutual ‘trust and confidence’ between the employer and the employee
- the employee’s obligation to work honestly and faithfully, fulfil reasonable instructions and work with due diligence, skill and care
- the employee’s obligation not to undermine the employer’s business
This is why it’s so important for employers AND job seekers to understand employment contracts and what they contain, and not make any assumptions.
So, why issue a written employment contract?
All employees are legally entitled to receive a written statement that describes the main terms of the contract of employment. This is usually referred to as a written contract, but the official term for this is a “Written Statement of Employment Particulars”. This isn’t actually the employment contract itself (the employment contract started when the job seeker accepted the job), these are the terms of the employment contract, and they must be issued in writing! This ensures both parties are clear on the employee’s:
- employment conditions
Both the employee and the employer must stick to the employment contract until it ends (e.g. by the employer or employee giving notice or the employee being dismissed) or until the terms of employment are changed (usually by agreement between the employee and employer).
Whilst most employment contracts do not need to be in writing to be legally valid, it is the employee’s statutory right to receive a Written Statement of Employment Particulars within two months of starting a job.
It is rarely true to say an employee “does/did not have an employment contract” as an employment contract as offered and accepted by default when a job offer is made and accepted. What might be true is that the employer never fulfilled their legal obligation to provide a Written Statement of Employment Particulars to the employee.
In a nutshell, in employment law, the employment contract works like this:
- The employment contract begins when the employer appoints a candidate with a formal job offer (verbally or in writing) and once the candidate accepts the offer they become, legally, an employee.
- The employer must give the prospective employee their Written Statement of Employment Particulars within two months of the employee starting the job
- From step 1, both parties are in contract with each other until either terminates the employment, as per the agreement at step one
What does the ‘Written Statement of Employment Particulars’ (the written part of the employment contract) contain?
The Written Statement of Employment Particulars can be one single document or it can be made up of several documents if different sections are given at different times. For example, an employer might:
- give a new employee a formal offer of employment in writing
- give the new employee the minimum requirements of the *Written Statement of Employment Particulars before or as they start their new job
- give the final section of the Written Statement of Employment Particulars before the two-month time limit is up
All three documents will form the employee’s Written Statement of Employment Particulars.
No matter how the Written Statement of Employment Particulars is issued, the employee must receive it in full within two months of starting work. *You can read more about the legal requirements of the Written Statement of Employment Particulars here.
Who should receive a Written Statement of Employment (a written employment contract)?
⇒ Employed vs Self-Employed
Firstly, it’s very important to be clear on what a groom’s employment status is, whether working full or part-time on a permanent or temporary basis.
Many employment rights, such as the right not to be unfairly dismissed and the right to redundancy pay, rely on the groom being an employee. It is common for an employer to call a groom self-employed, freelance or a ‘working pupil’ when they are in fact an employee. Some employers might do this in order to avoid having to pay Tax and National Insurance for their employees and to try to avoid them having employment rights but, in many cases, it is due to a lack of understanding or care on the part of both parties. Again, no legal defence.
Just because a groom pays Income Tax and National Insurance as a ‘self-employed’ individual, it does not automatically follow that they are self-employed rather than an employee! Instead, this is defined by the nature of the working relationship. An example is when a groom has to ask for time off work like an employee rather than tell the employer what days/hours they are available to work like a self-employed person.
To be clear, if an employee:
- has to ask to take time off work
- is paid a regular salary rather than per task/requirement
- is provided work by the employer to fill their hours
and the employer:
- provides the majority of the tools and equipment required for the job
- provides/sources cover when the groom is off sick or taking time off work
then it can be argued the person is not self-employed but an employee and requires at least a “Written Statement of Employment Particulars“.
⇒ Full-Time Grooms
When it is established and mutually agreed that a groom is to work on an employed basis, the employer must provide a “Written Statement of Employment Particulars” within two months of the groom starting work.
⇒ Short Term/Temporary Cover
Again, as soon as a person accepts a short term job role they have a verbal contract with their employer, no matter how short the cover required. Both employers and the person concerned must be clear on whether the temporary cover is provided on an employed or self-employed basis, as detailed above.
The employer must give the groom a ‘Written Statement of Employment Particulars’, to confirm the terms of the employment if their employment is intended to last at least a month or more. This must include:
- how long a temporary job is expected to last
- the end date of a fixed-term contract
Should a person work abroad for more than a month during their first 2 months’ employment, the employer must give them the written statement before they leave.
⇒ Grooms who travel or work abroad as part of the job
Should a person work abroad for more than a month during their first 2 months’ employment, the employer must give them the written statement before they leave, and their employer must state:
- how long they’ll be abroad
- what currency they’ll be paid in
- what additional pay or benefits they’ll get
- terms relating to their return to the UK
This information can be given to the employee in a separate document, as part of the Written Statement of Employment Particulars.
An employer may send an employee to another of their yards in a country within the European Economic Area (EEA). In this situation employees must get the terms and conditions that are the legal minimum in that country for:
- working hours and rest breaks
- holiday entitlement
- minimum pay (including overtime)
⇒ Part-time Grooms
A part-time worker must be given a “Written Statement of Employment Particulars” within 2 months of starting a job that’s intended to last at least one month or more.
Again, as soon as a groom accepts a part-time job role they have a verbal contract with their employer, no matter how few hours they work in a week. Both employers and grooms must be clear on whether the temporary cover is provided on an employed or self-employed basis, as detailed above.
⇒ Freelance Grooms
Freelance Grooms are service providers and the “employer” is their client. The client will have a “contract to provided services” with the Freelance Groom, not an employment contract, and Freelance Grooms do not require a Written Statement of Employment Particulars.
This is another situation in which it is imperative to be clear on the legal status of the individual groom, and not assume that a part-time groom on a zero-hour contract is, by default, a Freelance Groom. Freelance Grooms are self-employed contractors. They are the type of grooms that come in, fully armed with tools and equipment (where appropriate), fully insured, and provide one-off or ad-hoc services or “cover”. A yard/horse owner will book the services of a Freelance Groom in the same way as those of a Farrier, Electrician or maintenance company.
Illegal Employment Contracts
Any employment contract will be deemed an illegal contract of employment if:
- the employee gets all or part of their wages paid cash in hand; and
- Tax and National Insurance contributions aren’t paid on the wages when they should have been; and
- the employee knew they were being paid in this way to avoid paying tax and/or national insurance contributions.
A contract of employment will not be illegal if only one of the parties is not declaring the payments and/or making appropriate deductions.
If within a contract an employer tries to take away the employee’s statutory rights, it is not an illegal contract but it cannot be legally enforced.
Breach of Contract – What happens when an employment contract is broken?
A contract may be broken if either the employee or the employer does not follow a term in the contract, which is known as a “breach of contract”.
- if the employer doesn’t pay the employee in lieu of the notice which the groom is entitled to under their contract, this would be a breach of contract.
- the employee fails to turn up for work without good reason or leaves without giving/working due notice, this would be a breach of contract.
If either party breaks the contract, you should try and sort the matter out between you informally before taking action.
Sources and further reading
Employment Contracts: UK Government website
Law Donut: www.lawdonut.co.uk/business