Employment Contract Review: What to Check and What It Costs

Most UK employment contracts are never read closely by either side until something goes wrong. By then the terms are fixed, and the clauses that matter are the ones nobody negotiated: notice, restrictive covenants, bonus discretion and how the contract can be varied.

This guide is written for both audiences. If you are an employer, it covers what a legal review is checking and what it costs. If you have been handed a contract to sign, it covers which clauses change your position most.

What a review is actually checking

The statutory floor. Written particulars must be given on or before the first day of work, and must include the specific items listed in section 1 of the Employment Rights Act 1996: pay, hours, holiday, sick pay, notice, place of work, probation, and training entitlements. A contract can improve on statutory rights. It cannot reduce them, and a clause attempting to do so is unenforceable.

Notice. Statutory minimum notice from the employer is one week after a month's service, then one week per complete year up to a maximum of twelve. Contracts often extend this. Check whether a payment in lieu of notice clause exists, because without one, paying in lieu is technically a breach and can release the employee from post-termination restrictions.

Restrictive covenants. Non-compete, non-solicitation and non-dealing clauses are only enforceable so far as they protect a legitimate business interest and go no wider than necessary in scope, geography and duration. Blanket twelve-month national non-competes for junior staff are routinely unenforceable, and an unenforceable covenant protects nothing.

Variation clauses. A clause allowing the employer to vary terms unilaterally is read narrowly by tribunals. Material changes to pay, hours or duties generally need consent or a proper consultation process.

Pay and bonus. Whether the bonus is discretionary in substance as well as in name, what happens to accrued commission on termination, and how deductions are authorised. Without an express deductions clause, most deductions from wages are unlawful.

Working time and holiday. Whether an opt-out from the 48-hour average weekly limit is included, and whether holiday is expressed correctly against the statutory 5.6 weeks.

Confidentiality and intellectual property. For anyone creating work product, whether IP assignment is express rather than assumed.

Status. Whether the document matches the reality. A "consultancy agreement" for someone integrated into the team, working set hours under supervision, will not survive a status challenge, and the liabilities are backdated.

Why employers should have templates reviewed

Three reasons that come up repeatedly:

1. Downloaded templates are often not current. Anything drafted before April 2020 will not reflect the day-one written particulars duty or the extension to workers.
2. Copied covenants do not transfer. A restriction drafted for a senior sales director is unenforceable when pasted into an administrator's contract, and a court will not rewrite it for you.
3. One document, repeated exposure. A defective clause is not one problem. It is the same problem across every employee on that template.

Why employees should have an offer reviewed

Review before signing is worth it when the contract includes post-termination restrictions, a significant bonus or commission element, a mobility or relocation clause, or an unusually long notice period. Once signed, your leverage is largely gone. Negotiating the geographic scope of a non-compete at offer stage is straightforward. Challenging it after resignation means litigation.

What it costs

Route	Typical basis	Notes
Included in an HR retainer	Around £150-£600 a month for a small employer	Most outsourced HR contracts include contract and handbook drafting; check whether documents are bespoke or templated
Employment solicitor, fixed fee	Per document	Common for a single contract review or a covenant package
Employment solicitor, hourly	Per hour	Used where negotiation or a dispute is involved
HR consultant, day rate	Commonly £500-£1,500 a day	Suits a full document set rebuild across all roles

For employers, a solicitor is the right choice for enforceability questions, particularly restrictive covenants and settlement agreements. An HR provider is usually more cost-effective for building a consistent document set across the workforce. Note that settlement agreements require independent legal advice for the employee to be binding, and the employer normally contributes to that cost.

A practical review checklist

• Are written particulars complete and issued on or before day one?
• Is there a payment in lieu of notice clause?
• Are covenants proportionate to the actual role?
• Is there an express clause authorising deductions from wages?
• Is bonus discretion genuine and exercised consistently?
• Does the working pattern in the document match the working pattern in practice?
• Does the handbook contradict the contract anywhere?

That last point causes more disputes than any single clause. Where a contract and handbook conflict, you are arguing about which one applies before you get to the substance.

To find employment law specialists and HR providers who draft contracts properly, see our employment law guide or the shortlist for your city in the directory.

This guide is general information about UK employment contracts, not legal advice. Take advice on your own circumstances before signing or issuing a contract.