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employment contract template small business uk

Employment Contract Template for UK Small Businesss

If you're hiring your first or fifth employee, you need a solid employment contract template for your UK small business before day one. Not a generic download from a random HR site — a document that actually reflects what UK employment law requires and what your specific working arrangement looks like. Under the Employment Rights Act 1996, employees are entitled to a written statement of particulars from day one of employment. That's not optional. Most free templates miss clauses that matter: probation terms, IP ownership, garden leave, or post-termination restrictions. They're also rarely updated when legislation changes. As a small business owner, you're exposed if something goes wrong and your contract doesn't hold up. This page explains what a compliant UK employment contract must include, where generic templates fall short for small businesses specifically, and how Atornee helps you generate a contract that's tailored, legally grounded, and ready to use without paying solicitor rates for a standard hire.

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Why this matters

Most small business owners either download a free template and hope for the right, or pay a solicitor £300–£500 for a contract they'll use once. Neither works well at scale. Free templates are often out of date, missing key clauses, or written for larger organisations with HR teams. They don't account for part-time arrangements, remote work, or the specific IP and confidentiality risks that matter to early-stage businesses. The result is contracts that look fine until there's a dispute — and then they don't protect you. Small businesses need employment contracts that are legally compliant, practical, and fast to produce without specialist legal spend every time you hire.

The Atornee approach

Atornee isn't a template library. When you use Atornee to generate an employment contract, you answer questions about your specific hire — role type, hours, probation period, pay structure, remote or office-based, IP considerations — and the output reflects those answers. The contract is built against UK employment law requirements, including the Employment Rights Act 1996 and current statutory minimums. You're not editing a generic Word doc and guessing what to change. If your situation is genuinely complex — senior hires, restrictive covenants with real teeth, TUPE transfers — Atornee will tell you when a solicitor review makes sense. Most standard hires don't need that.

What you get

A UK-compliant employment contract covering all mandatory written statement particulars required from day one under the Employment Rights Act 1996
Clauses tailored to your working arrangement — full-time, part-time, hybrid, or remote — rather than a one-size document you have to adapt yourself
Probation period terms, notice provisions, and IP ownership clauses that actually protect your business if things go wrong
Plain-English drafting your employee will understand, reducing back-and-forth before signing
A document you can regenerate or update as your team grows, without paying per-contract legal fees

Before you sign checklist

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1. Confirm the employee's start date — you must provide the written statement on or before day one, not after
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2. Decide on probation length and what review process you'll follow before generating the contract
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3. Check the current National Minimum Wage rate to ensure your pay terms are compliant at the point of signing
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4. Identify whether the role involves access to confidential information or creation of IP — this affects which clauses you need
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5. Confirm whether the role is fully remote, office-based, or hybrid, as this affects place of work and expense terms
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6. Review any post-termination restrictions you want to include — non-solicitation or non-compete clauses must be reasonable to be enforceable
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7. Once generated, have both parties sign before or on the first day of employment and keep a copy on file

FAQ

Is an employment contract legally required for UK small businesses?

You're required to provide a written statement of employment particulars to all employees from day one under the Employment Rights Act 1996. This isn't quite the same as a full contract, but in practice a well-drafted employment contract covers everything the written statement requires and more. Failing to provide it gives employees grounds to raise a claim at tribunal, even if nothing else has gone wrong.

Can I use a free employment contract template I found online?

You can, but the risk is that free templates are often outdated, written for larger businesses, or missing clauses relevant to your situation. They may not reflect changes to statutory minimums, parental leave rights, or flexible working rules. If a dispute arises and your contract has gaps, you're exposed. It's worth using something that's been built against current UK law rather than hoping a generic download is still accurate.

What must be included in a UK employment contract?

The Employment Rights Act 1996 sets out the minimum required particulars: names of employer and employee, start date, job title or description, pay and pay frequency, hours of work, holiday entitlement, place of work, notice periods, and information about sick pay, pensions, and disciplinary procedures. Additional clauses around probation, IP, confidentiality, and post-termination restrictions are not legally required but are strongly advisable for most small business hires.

Do I need a solicitor to draft an employment contract for a standard hire?

For most standard hires — an employee on a straightforward salary, defined hours, and a typical role — you don't need a solicitor. Where it's worth getting legal input is for senior hires with significant equity or bonus arrangements, roles involving highly sensitive IP, or situations where you want enforceable restrictive covenants. Atornee will flag when your situation warrants that escalation.

Are employment contracts different for part-time or remote employees?

The legal requirements are the same, but the contract terms need to reflect the actual arrangement. Part-time employees have the same statutory rights as full-time employees on a pro-rata basis. Remote employees need clear terms around place of work, equipment, and expenses. A generic full-time office-based template won't cover these properly without significant editing.

Can I include a non-compete clause in a UK employment contract?

Yes, but they're only enforceable if they're reasonable in scope, duration, and geography. Courts will not enforce a clause that's broader than necessary to protect a legitimate business interest. A blanket 12-month ban on working in your entire industry is unlikely to hold up. If post-termination restrictions matter to you, it's worth being specific about what you're protecting and why.

Related Atornee Guides

Cheap Contract Solicitor Alternative (UK)

Compare broader contract workflow options if you're managing multiple document types alongside employment contracts.

Cheap Solicitor for NDA (UK)

If your new hire will have access to sensitive information, pair the employment contract with a standalone NDA for added protection.

Atornee Use Cases

See how UK businesses at different stages use Atornee across hiring, contracts, and compliance workflows.

External References

GOV.UK Business and Self-employed

Official UK guidance on employing staff, including written statement requirements and employer obligations.

UK Legislation

Primary statutory reference for the Employment Rights Act 1996 and related employment law.

ICO Guidance for Organisations

Relevant for data protection clauses in employment contracts, particularly where employees handle personal data.

Trust & Verification Policy

Authored By

A

Atornee Editorial Team

UK Employment Contract Research

Reviewed By

C

Compliance Review Desk

UK Business Legal Content QA

Last reviewed on 3/4/2026

"Content is developed from analysis of UK employment law requirements, common small business hiring scenarios, and review of Employment Rights Act 1996 obligations. Practical framing reflects the real contract gaps and disputes that arise when small businesses rely on generic templates."

References & Sources