How to write an employment contract that holds up at tribunal

Most UK SMEs use the contract their first employee signed in 2018, with the dates updated. That contract is now actively working against you. The Employment Rights Act 2025 changed the day-one rights position. The case law on restrictive covenants has tightened. Tribunal awards have climbed. If your contract has not been touched in three years, it is a liability.

Here are the twelve sections an employment contract needs to be tribunal-defensible in 2026, and the common mistake in each.

1. Names of the parties and effective start date

Obvious. The mistake: companies regularly use a trading name instead of the registered legal entity. If your registered name is “Acme Hospitality Ltd” but your contract says “Acme”, the contract is not technically with the right entity. Get this wrong and a tribunal cannot enforce it against you (or for you).

2. Job title and a duties statement

State the job title. Then add a sentence: “Such other duties as the Company may reasonably require from time to time.” This gives you flexibility to reassign reasonable duties without it being a breach. Without that line, asking someone to cover an absent colleague can technically be a unilateral variation of contract.

3. Place of work and any mobility clause

State the primary work location. If hybrid, say so explicitly. State the number of days expected in office. The mistake: writing “home or office” without a number. A tribunal will interpret ambiguity against the employer.

4. Hours of work and overtime

State weekly hours, start and finish times, lunch break. If your business has shift patterns, state that and refer to the rota policy. The Employment Rights Act 2025 day-one rights mean zero-hours and irregular-hours workers now have stronger statutory entitlements. If you use those models, the contract needs to reflect them, not paper over them.

5. Remuneration

State the annual salary, payment frequency, and method. If there is a bonus, state the bonus scheme name and reference the rules. The mistake: stating a “discretionary bonus” with no reference to a scheme. Tribunals have increasingly ruled discretionary bonuses are a contractual expectation if paid regularly.

6. Holiday entitlement

5.6 weeks is statutory minimum. State whether bank holidays are inclusive or in addition. State the holiday year. State the carry-over rule.

7. Sickness absence and sick pay

State the notification process. State the SSP position. Important: under the Employment Rights Act 2025, SSP is now payable from day one with no Lower Earnings Limit. Your sick pay clause needs updating if it still refers to waiting days or earnings threshold.

8. Notice period

State employer notice and employee notice separately. Below 4 weeks of service, neither side needs to give notice. Statutory minimum employer notice rises with length of service. Employee notice is typically 1 to 3 months for SME roles.

9. Pension

Reference the auto-enrolment scheme. State the employer and employee contribution rates. State the qualifying earnings basis.

10. Confidentiality

A short, clearly-drafted confidentiality clause is enough. The mistake: over-broad clauses that try to cover all company information are routinely struck down as unenforceable.

11. Restrictive covenants (post-termination)

This is where most SME contracts fall apart at tribunal. Restrictive covenants are only enforceable if they protect a legitimate business interest, and only to the extent reasonable.

• Non-compete: typically 3 to 6 months maximum, geographic limit appropriate to the actual market. 12 months is usually excessive.
• Non-solicitation of clients: typically 6 to 12 months, limited to clients the employee had actual dealings with.
• Non-poaching of staff: typically 6 to 12 months, limited to staff above a defined seniority level.

If you copied a senior-level non-compete onto a junior employee contract, the entire clause is likely unenforceable.

12. Grievance, disciplinary, and dismissal procedures

Reference the relevant policy in the handbook. State that the policy is non-contractual. State the ACAS Code of Practice applies. The mistake: putting the full disciplinary procedure in the contract makes it contractual and means you cannot update it without consent.

What to do if your contract is older than three years

1. Refresh and re-issue. Cleanest, but employees can refuse.
2. Variation by letter. Send a letter detailing the changes, give the employee 30 days to object. Practical for minor updates.
3. Update the handbook. If the contract references the handbook and the handbook is non-contractual, you can update many policies without touching contracts.

If you are reviewing your contracts and unsure where to start, we offer a fixed-fee contracts and policies refresh from £695, plus an optional sub-contractor agreements bundle. Or book a 15-minute call to talk it through.

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