Basic Employment Contract with Restrictive Covenants

This Basic Employment Contract with Restrictive Covenants is aimed at junior roles where you need stronger post-termination protections than a standard junior contract would usually include.

It covers the requirements of a written statement of main terms and conditions of employment (often called a Standard Form Section One Statement) and must be provided to the employee or worker by day one of employment.

Use this contract where enhanced restrictions are genuinely needed

The restrictive covenants are intended to limit the risk of an employee moving to a competing business or taking your customers or staff with them. If those risks are unlikely to arise for the role, this is usually not the right template to use.

Restrictive covenants are set out in a separate schedule

The restrictions sit in a schedule to the main agreement. The contract requires the employee to give any prospective new employer a signed copy of that schedule so the new employer is aware of the restrictions that apply.

What restrictions the schedule includes

The schedule contains three potential restrictive covenants:

• non-competition
• non-solicitation of customers
• non-solicitation of employees

The non-competition covenant restricts the employee from competing with the company’s business for a period after employment ends. The non-solicitation covenants restrict the employee, for a period after employment ends, from dealing with customers with whom the employee has had dealings and from poaching employees.

Keeping restrictions enforceable

Restrictive covenants should be no wider than is necessary to protect your “legitimate business interests”. If their scope is too wide, they may not be enforceable.

Carefully consider each covenant and remove any that are not relevant for your business and the particular employee. Time limits and geographical limits should be appropriate and reasonable for the nature of your business.

Pension wording update

The Pensions Act 2014 introduced a new state pension for people reaching state pension age on or after 6 April 2016, replacing the previous basic state pension and additional state pension and ending contracting out for defined-benefit schemes. This contract has been updated accordingly by removing the clause referring to the contracting out certificate.

Basic Employment Contract with Restrictive Covenants is part of Employment. Just £38.50 + VAT provides unlimited downloads from Employment for 1 year.