Employment contracts, director service agreements and staff handbooks

I draft employment contracts, director service agreements and staff handbooks for owner-managed businesses in England and Wales. That might be a company which has grown past the point where a template downloaded years ago still fits, or one which has never had anything in writing at all, or one which is getting ready for a sale and knows that a buyer will ask to see everything.

This is a one-off piece of drafting work for a fixed fee, and I’ve advised businesses on employment law since I qualified as a solicitor in 2008. If you want advice on a particular employee problem instead, that’s on my advice for employers page.

The written statement of particulars

Every employee and every worker is entitled to a written statement of particulars, and since 6 April 2020 it has to be given no later than the day they start. Before that date it was employees only, and you had two months. The rule is in section 1 of the Employment Rights Act 1996.

The list of what the statement must cover also got longer in 2020. As well as the obvious things (names, start date, pay and when it’s paid, hours, holiday, job title, place of work and notice), it now has to set out the days of the week the person is required to work and whether hours or days can vary, any probationary period and its conditions, other paid leave, other benefits, and any training the employer requires, including training the person has to pay for. Some items, such as pensions and disciplinary and grievance procedures, can be given separately and a little later. There’s a plain summary on gov.uk, and I wrote about the changes at the time in my article on statements of terms from April 2020.

If your contracts were written before April 2020 and haven’t been looked at since, they’re probably missing some of this.

What a proper contract adds

The written statement is only the legal minimum, and it’s there to protect the employee’s right to know their terms, so it does very little for you as the employer. I’d recommend a proper contract of employment which adds the things an employer actually relies on, such as confidentiality, ownership of intellectual property created at work, the right to pay in lieu of notice, garden leave, deductions from pay, lay-off and short-time working where that’s relevant, and restrictive covenants for the people who could hurt the business if they left for a competitor.

Restrictive covenants need particular thought, as a court will only enforce one that goes no further than is reasonably needed to protect a legitimate business interest, so the same twelve-month non-compete pasted into every contract, whether it’s for the receptionist or the sales director, is unlikely to help when you need it. I’ve written about cases where they failed, including a six-month non-compete that collapsed, and about one clause worth checking in every contract.

For most businesses I draft two or three versions, which are a standard contract, a senior one with fuller restrictions, and a director’s service agreement.

Director service agreements

Directors are usually employees as well as office holders, and the two roles end in different ways, so their agreement needs to deal with both. It should cover duties and time commitment, pay, bonus and benefits, longer notice periods, garden leave, what happens to the directorship (and any shares) when the employment ends, and restrictions that fit what that person knows and who they deal with. If the agreement guarantees a term of more than two years, the shareholders have to approve it under section 188 of the Companies Act 2006.

These agreements matter most when the business changes hands, as a buyer will want the key people tied in on proper terms, and a seller who is staying on after completion will be negotiating a new service agreement alongside the sale, which I’ve written about in should the seller stay on as a consultant or employee. There’s a general piece on whether directors need service contracts too. If you’re preparing for a sale, this is one of the things to sort out early.

What goes in the staff handbook

The handbook holds the policies, which means disciplinary, capability and performance, grievance, sickness absence, holiday, family leave (maternity, paternity, adoption and the rest), equal opportunities and harassment, data protection, IT and social media, expenses, and whatever is particular to your trade. I keep it non-contractual where I can, so you can update a policy without needing every employee’s agreement.

I’ve seen a number of websites offering a free staff handbook, and I still think your business is better off investing a small amount in a proper one. A handbook is only useful if the policies fit how your business really runs and your managers follow them, and a free one that promises a five-stage disciplinary process you never use is arguably worse than nothing, because a tribunal will ask why you didn’t follow your own procedure. So I ask how you actually deal with things before I write anything.

Some providers of HR packages also sell employment tribunal insurance with them, and on the face of it that looks attractive, but do read the conditions before you rely on it. In my experience the cover usually depends on you having taken and followed the provider’s advice at every step, and there are exclusions, and if you’ve done all of that then there often wouldn’t be a claim to deal with anyway. I’m not saying you should never buy it, but in my view it’s a small extra and shouldn’t be the reason for choosing a package.

The Employment Rights Act 2025

Employment law is being changed in stages by the Employment Rights Act 2025. Some of it is already in force, such as statutory sick pay from the first day of absence (April 2026) and the longer time limit for tribunal claims (October 2026). From 30 October 2026 employers have to take all reasonable steps to prevent sexual harassment of their staff, and can be liable for harassment by third parties such as customers if they haven’t, so the harassment policy in the handbook needs to reflect that.

More follows in 2027. The qualifying period for unfair dismissal drops from two years to six months for dismissals taking effect on or after 1 January 2027, which makes probation clauses and how you use them more important than they were. According to the government’s published timetable, a duty to tell workers in writing about their right to join a trade union is planned for January 2027 as well, although that one isn’t in legislation yet.

That was the position in October 2026 and the dates have moved before. What it means in practice is that sick pay, probation and family leave wording written before 2026 is likely to be out of date, and I draft with the changes in mind.

How long it takes and what it costs

The fee is fixed and agreed in writing before I start. For a set of employment contracts and a staff handbook it’s usually £3,500 plus VAT. A single director’s service agreement, or a larger or more unusual set of documents, is quoted once I’ve seen what’s needed. New clients also pay an ID check of £30 plus VAT per director or shareholder.

Timing depends mostly on how quickly you can answer my questions about how the business works. Bringing the new contracts in for existing staff is a separate step that needs handling with some care, because you can’t simply impose new terms. I’ll advise on that, and an HR consultant can run the process with you if there are a lot of people involved.

Next steps

If you’re looking for contracts of employment and a staff handbook, get in touch and send me your current contracts and handbook (or let me know if there aren’t any), with a rough idea of headcount and roles. I’ll come back to you with a scope and a fixed fee.