PEOPLE RESOURCING
Chapter Thirteen
The New Employee
Contracts of employment
A contract of employment is no more or less than an
agreement between two parties to create an employment
relationship. It is not necessarily a full written document –
it can be a simple offer letter and acceptance, or even an
oral agreement.
There are four simple legal tests:
• Has an offer of employment been made?
• Has the offer been accepted?
• Does consideration exist? This means that the employee agrees
to perform the job and the employer agrees to make
payment in the form of wages.
• Is there an intention to create legal relations?
Once a contract of employment exists, both parties owe
certain duties to one another that are enforceable by law.
Terms can be either be express, be general to all
employment relationships (due to statutory employment
legislation), or be ‘implied’. The latter are held to exist by
courts even though neither party has formally agreed to
them. They may be:
• terms implied in common law
• the result of custom and practice.
Most employers provide evidence in writing of both the
existence of the contract and its main terms – to put the
relationship on an open, clear footing from the start.
Three types of document are often provided:
• the offer letter
• written particulars of employment
• incorporated documents – such as job descriptions,
collective agreements and staff handbooks.
It is important to note that once procedures are
incorporated, an employee has the right to sue the
employer if those procedures are not followed.
Specific contractual terms
Most contracts take a pretty standard form. However,
common additional/specific express terms include:
• fixed-term clauses – where a termination date must be
clearly stated
• waiver clauses
• probationary clauses
• restraint of trade clauses
• restrictive covenants.
Atypical workers
In certain circumstances, it is not easy to determine
whether an individual is actually employed by an
organisation (under a ‘contract of service’) or is working
for them but is in fact self-employed (under a ‘contract for
services’).
The distinction is significant, however, because a selfemployed person has fewer obligations and rights.
The concept of ‘mutuality of obligation’ is employed here
when courts are deciding these issues – whether or not
the employee is able, in practice, to turn down offers of
work without ending the employment relationship.
National variations
Organisations operating in a number of countries need to
comply with local laws in respect of:
• who qualifies as an ‘employee’
• the extent to which they permit freely-agreed contracts
to form the basis of an employment relationship
• special considerations for certain groups (apprentices,
homeworkers, etc)
• the involvement of trade unions.
The psychological contract
The psychological contract is concerned with the
expectations that employers and employees have of their
relationship – these are perceived and exist only in people’s
heads.
Breaches of the psychological contract on the part of the
employer can can result in a loss of employee loyalty and
commitment.
A common view is that the traditional ‘relational’ contract
(where job security and career progression are offered in
return for commitment and effort) is being replaced by a
‘transactional’ contract – where the employer offers pay and
employment for a limited period in return for the completion
of a defined set of duties. The new contract minimises
emotion, and resembles a simple economic exchange.
Where employers wish to alter the content (or terms) of
psychological contracts, they can start by altering the
expectations of new employees. The recruitment,
selection and induction processes can be key to this.
If managers do not take the lead, and expressly
communicate their expectations, the psychological
contract will be shaped by fellow employees, past
employment experiences and general impressions.
The most effective approach is for a clear, organisationwide set of expectations to be established and
communicated effectively to everyone in the same way.
Induction
Induction is one of several different terms for activities at
the start of an individual’s employment:
• Induction is the whole process whereby new employees adjust or
acclimatise to their jobs and working environment.
• Orientation is a specific course or training event for new starters.
• Socialisation is the way new employees build up working
relationships and find roles for themselves within their new
teams.
Effective induction is both difficult to achieve consistently
and time-consuming. Poor induction is therefore
common, due to a lack of consideration for the new
employee’s basic needs. This can lead to high levels of
staff turnover in the first months of appointment.
Individual employees have widely varying requirements
when they join a new organisation, and there are
dangers in making blanket assumptions about what
information and support each will need.
Putting everyone, regardless of rank or experience,
through an extensive, identical, centrally-controlled
induction programme may well be counterproductive.
Effective induction tends to incorporate different
activities:
• collective orientation sessions – provided for all on the first day
• specific small-group orientation sessions in the first weeks
• job-/department-specific briefings from the line manager
• assigning a mentor or ‘buddy’ to each new employee.
When P&D professionals share induction responsibilities
with line managers, they will want to develop control
systems to ensure that effective induction is actually
taking place.
The most common mechanism is an induction checklist.
Managers have a list of points to cover, and the new
employee must sign when the list has been completed.
Such documentary evidence is key for organisations
seeking to gain/retain the Investors in People (IiP) award.
P&D staff are often concerned that line managers do not
give sufficient attention to induction processes.
Explanations that may be offered include:
• that line managers necessarily have a shorter-term
focus
• that line managers are placed under tight time and cost
restraints. Releasing valuable new employees for
orientation training is often unpopular
• that line managers’ sections of induction are often
tedious, and by their nature need to be completed
regularly. Many managers try to delegate the task
wherever possible.
A number of induction features have been found to
improve the experiences of new starters:
• regular updating of procedures
• direct consultation with new starters about programme
improvement
• keeping induction improvement on the organisation agenda
• making use of several communication methods
• including job-related training
• producing an accompanying ‘welcome’ pack
• involving senior management in orientation sessions
• covering informal rules and norms as well as the formal ones.