Permanent (Open-Ended) Employment Contract

Overview

A permanent employment contract (sometimes still loosely called an "open-ended" or "indefinite" contract, though English law does not use the French CDI terminology) is an employment relationship with no fixed end date. Since 6 April 2020, section 1 of the Employment Rights Act 1996 (as amended by the Good Work Plan reforms) requires every employer to give workers and employees a written statement of particulars of employment no later than their first day of work — this is a "day one" right, not something that can be delayed until after a probationary period. When to use it: for any hire without a fixed end date, whether full-time or part-time, in the private sector. Where the role has a defined end date or is tied to a specific task or event, a fixed-term employment contract should be used instead. Parties: the employer and the employee (or worker, though this template addresses the more protective "employee" employment status). Mandatory content of the written statement (s.1 ERA 1996): the names of employer and employee, the date employment (and continuous employment) began, pay and pay interval, hours of work, holiday entitlement and holiday pay, job title or a brief description of the work, place of work, any probationary period, terms relating to sickness and sick pay, other paid leave, pensions, notice periods, any collective agreements, and — where relevant — details of any training entitlement. Note there is no general statutory requirement in England and Wales for the underlying contract itself to be in writing at all (unlike some jurisdictions) — but the section 1 written statement is mandatory regardless, and it is best practice for the statement and the substantive contract to be combined in a single document, as this template does. Notice periods: the Employment Rights Act 1996 (s.86) sets statutory minimum notice periods rising with length of service (one week's notice after one month's service, up to a maximum of 12 weeks after 12 years' service) — the contract may specify longer notice, but not shorter. Unfair dismissal: an employee generally needs two years' continuous service before they can bring an ordinary unfair dismissal claim (Employment Rights Act 1996, s.108) — though certain dismissals are "automatically unfair" regardless of length of service (for example dismissal related to pregnancy, whistleblowing, or asserting a statutory right), and this exception should not be relied upon to justify treating a probationary employee's rights loosely. Common pitfalls: failing to issue the written statement by day one (a breach of s.1 ERA 1996, which can result in a compensation award if the employee later brings another successful tribunal claim); a probationary period with no clarity on the notice applicable during probation; a restrictive covenant (e.g. non-compete) with no legitimate business justification, which is likely to be held unenforceable as an unreasonable restraint of trade; and confusing the National Minimum Wage / National Living Wage thresholds, which change annually and must be checked against current rates.

Information to customize

• Employer's name or company name

• Employer's registered address

• Employer's company number (if applicable)

• Employee's full name

• Employee's address

• Job title / brief description of work

• Start date (and continuous employment start date if different)

• Place of work

• Normal hours of work

• Salary (gross annual or hourly rate)

• Pay interval (e.g. monthly)

• Probationary period (months, if any)

• Holiday entitlement (including statutory minimum 5.6 weeks / 28 days for a full-time worker)

• Notice period the employer must give

  Must meet or exceed the statutory minimum under s.86 ERA 1996.

• Notice period the employee must give

• Restrictive covenants (non-compete/non-solicit), if any

• Pension scheme details (auto-enrolment)

• Date of signature

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Frequently asked questions

Is a written contract legally required for a permanent employee in England and Wales?

There is no general requirement for the substantive employment contract itself to be in writing, but section 1 of the Employment Rights Act 1996 requires every employer to provide a written statement of particulars no later than the employee's first day — a 'day one' right. Combining the statement and the substantive contract in one document, as this template does, is best practice.

What is the statutory minimum notice period?

Under section 86 of the Employment Rights Act 1996, statutory minimum notice rises with continuous service: one week after one month's service, then one additional week per completed year, up to a maximum of 12 weeks after 12 years. The contract can specify longer notice but never shorter.

How long before an employee can claim unfair dismissal?

Generally two years' continuous service is required to bring an ordinary unfair dismissal claim under section 108 of the Employment Rights Act 1996. However, certain dismissals (e.g. related to pregnancy, whistleblowing, or asserting a statutory right) are automatically unfair regardless of length of service.

What is the statutory minimum holiday entitlement?

Under the Working Time Regulations 1998, a full-time worker is entitled to a statutory minimum of 5.6 weeks' paid annual leave (28 days including bank holidays for a standard 5-day week).

Are restrictive covenants (non-compete clauses) enforceable?

Only to the extent they protect a legitimate business interest and go no further than reasonably necessary — an overly broad non-compete is likely to be struck down as an unreasonable restraint of trade by an English court.

Does the employer have to auto-enrol the employee in a pension?

Yes, subject to eligibility criteria (age and earnings thresholds) under the automatic enrolment duties in the Pensions Act 2008 — most employees must be enrolled in a qualifying workplace pension scheme.

What happens during the probationary period?

A probationary period is not itself a distinct statutory concept, but it is common practice to allow either party to terminate on shorter notice during this period, and for the employer to assess suitability before confirming permanent status.

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