Employment contracts in the UK are one of the most important documents in your business. They define expectations, protect your organisation and give employees clarity from day one.
For many small businesses, contracts are drafted when someone joins and then left untouched for years. But employment law doesn’t stand still. Legislation evolves, case law develops and working practices change. Heading into 2026, reviewing your contracts isn’t just good housekeeping. It’s a sensible risk management step.
So what should your employment contracts include?
Why Employment Contracts Matter for Small Businesses
For SMEs, contracts do more than confirm salary and job title. They provide structure as your workforce grows and help prevent misunderstandings later.
Without clear written terms, you may face uncertainty around notice periods, pay, working hours, holiday entitlement or restrictive covenants. If a dispute arises, vague or outdated clauses can weaken your position.
Well-drafted employment contracts provide clarity for both parties and reduce the likelihood of costly disagreements.
The Legal Foundation: What Must Be Included in Your Employment Contracts
In the UK, employers must provide employees and workers with a written statement of employment particulars on or before their first day of employment. This forms the legal foundation of the employment contract.
At a minimum, this should cover:
- Names of the employer and employee
- Job title or a clear description of the role
- Start date and, for employees, the date continuous service begins
- Pay and how often it will be paid
- Working hours and days, including whether these may vary
- Holiday entitlement and holiday pay
- Place of work
- Notice periods
- Details of any probationary period
- Any mandatory training and who will cover the cost
Additional information, such as sick pay, other paid leave, pensions and disciplinary procedures, must also be provided, although some of this can be referenced in policies rather than included directly in the main contract.
Many small businesses assume an offer letter is sufficient. In reality, employment contracts in the UK must meet specific statutory requirements, and simply confirming salary and job title does not go far enough.
Key Clauses to Review for 2026 Employment Contracts
Beyond the statutory basics, there are several clauses small businesses should review as we move into 2026. These aren’t mandatory in every case, but they are widely regarded as good practice.
Flexible Working
Flexible working is now part of everyday business. Contracts should outline expectations around remote or hybrid arrangements and clarify any employer discretion to vary working patterns.
Confidentiality and Data Protection
Clear confidentiality clauses strengthen your position and set expectations around handling sensitive information and data responsibly.
Restrictive Covenants
If your business relies on client relationships or sensitive information, carefully drafted non-compete and non-solicitation clauses can help protect your interests. These must be reasonable to be enforceable.
Probation and Termination
Clear probationary terms and termination clauses help remove ambiguity around notice, performance reviews and payment in lieu.
Variation Clauses
A well-drafted variation clause can provide flexibility as your business evolves, provided it is used fairly and reasonably.
Common Contract Mistakes SMEs Make
Many small businesses rely on template contracts found online or documents copied from previous employers. While convenient, these are often outdated or not properly tailored to how the business actually operates.
Common issues include missing mandatory particulars, inconsistent notice periods, unenforceable restrictive covenants and references to legislation that has since changed. Some contracts also fail to reflect modern working arrangements, particularly hybrid or flexible models.
Employment contracts in the UK are not one-size-fits-all. They should reflect your organisation, your structure and the way you genuinely work.
Why 2026 Is a Good Time for a Review
Employment law continues to evolve, particularly around flexible working and day-one rights. Even if your contracts were compliant a few years ago, they may no longer reflect current expectations or best practice.
Waiting until a dispute arises to review your contracts creates unnecessary risk. A proactive review gives you confidence that your documentation is up to date and aligned with how your business operates today.
For growing organisations, this becomes even more important. As headcount increases, so does potential exposure.
Are Your Employment Contracts Ready for 2026?
If your employment contracts haven’t been reviewed recently, now is a sensible time to revisit them.
Clear, well-structured contracts protect your organisation, support compliance and give employees clarity from the outset. Poorly drafted or outdated agreements can create avoidable risk and uncertainty.
Our employment contract drafting and review service supports small and medium-sized businesses with professionally drafted, compliant and practical employment contracts tailored to how your organisation actually operates. Whether you need a full redraft or a structured review of existing terms, we help ensure your documentation reflects current UK requirements and supports your wider people strategy.