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Five things to know before signing a job contract

As employers start cutting back on benefits, lawyer Ben Smith explains to Emma Weinbren what to look out for before committing yourself to a new contract

When getting that long-awaited job offer, contractual details may seem like a tedious formality. And, despite best intentions, most of us will focus on the annual salary and skim the small print. But an attractive salary may come at the cost of equally important factors.

A C+D poll recently suggested that 70 per cent of readers had seen benefits such as pensions and sick pay cut over the past year. And Ben Smith, associate at law firm Charles Russell, says this is an increasingly common cost-cutting tactic.

"Employers are less willing to give benefits than they were previously. Companies are cutting back and, provided they get agreement from employees, that's fine," he explains. But if you're reluctant to accept what's on offer, your bargaining power is at its highest before you sign the contract. Mr Smith advises employees to look at pension, sick pay, holiday and notice arrangements before committing to the job.


Holiday

After salary, holiday entitlement is often the next most important consideration in a job contract. And some employees may be willing to accept lower pay for an extra week of sipping cocktails by the pool. So how much holiday are UK employees entitled to?

Sadly, the lack of home-grown sunshine does not mean UK employees have a higher holiday entitlement than their European counterparts. Employers are required by law to give a minimum of 28 days' holiday including bank holidays – on the lower end of the European spectrum. But Mr Smith says it is common for employees to negotiate additional days. "It's quite common to get the statutory amount, but there's no harm in asking for 28 days plus bank holidays, which would give you a total of 36," he advises.


Sick pay

When starting a new job, calling in sick is probably your last thought. But when you do get ill, having sick pay cover can be vital. And this year, C+D found that employers were changing their policies to provide less cover. Mr Smith says it is legal for employers to refuse to pay for the first three days of illness.

After that, employees will receive statutory sick pay – but this comes with strict conditions. "You need to be sick for at least four days in a row and earn at least £107 a week," explains Mr Smith. "It would be reasonable for employees to try to negotiate three months of contractual sick pay – on full or half rates."


Pensions

There is no requirement for employers to contribute to pensions. But this will all change with new legislation, says Mr Smith. "It won't mean every employer will automatically be required to contribute – it will depend on the size of the employer, and it will affect large companies first," he explains. "But over the next two years or so, it will be phased in to include other employers."

And Mr Smith suggests that employees could negotiate a pension contribution of up to five per cent of their salary – either to match their contributions or on a stand-alone basis. "There are a few employers who don't contribute, particularly in these times, but the government is trying to change that and stop people being in a position where they can't retire," he adds.


Notice

Whether you prefer flexibility or security, your contractual notice period is often worth negotiation. And Mr Smith says it may be wiser to opt for a longer period, as new legislation means you can now only claim for unfair dismissal when you've been employed at the company for two years or more. This means you could see your employment terminated with one week's notice. "That's another reason to get contractual protection and maybe get a longer notice period," he advises.


Termination restrictions

In senior roles, your contractual obligations may not end once you leave your job. In fact, many contracts include a clause that forbids you from working for a competitor for a certain period of time. Mr Smith advises people to check this before committing themselves to a job. "At the outset you may not be too concerned, but once it comes to leaving your job, it may prevent you from working in an area you wanted to," he says. And he warns against presuming there will be a loophole. "If the conditions are reasonable, they will be enforceable."

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