How to Create Offer Letters for Employees in the UK [2024]
So, you’ve completed the interviews, vetted the prospective employees, and settled on one lucky candidate to fill the opening. Now it’s time to send them the offer letter so you can officially get the onboarding process rolling. This is an essential step when you’re getting ready to hire an employee in the United Kingdom.
Sending an offer letter—sometimes termed a “contract of employment” in the UK—is crucial for several reasons. It gives you the opportunity to outline important details, such as the new hire’s duties and responsibilities, the benefits they’ll receive, including time off, and the salary. The offer letter will serve as a point of reference while you work things out, particularly if the individual decides they’d like to negotiate with you over the latter.
Here’s everything you need to send a legally compliant offer letter to hire a full-time employee in the United Kingdom.
UK job offer letter checklist
- Position (job title), job description, date of commencement, and probationary period. In addition to the title of the job and its responsibilities, indicate the start date (and end date, if you’re working with a fixed term employee) and whether the employee will be subject to a probationary period first. There is no minimum or maximum probationary period length set by law in the UK, but most probation periods last between three and six months. In the offer of employment, you should explain that the probationary period is used to determine whether they’re a good fit for the role and indicate how long it will last.
- Hours of work. The average full-time employee works 40 hours per week, but anything more than 35 hours per week is usually considered full-time too. Specify the new hire’s expected schedule, and be sure to include any breaks. Under the Working Time Directive—also called Working Time Regulations—most employees can’t work more than 48 hours per week, as averaged over 17 weeks. If you think you’ll need the new hire to work overtime, you’ll have to ask them to opt out of the 48-hour rule. Keep in mind that even if they do this, they can rescind their agreement anytime they want, regardless of whether or not it’s written in the contract.
- Compensation and benefits.
- Salary, expenses, and deductions. Specify the annual salary or hourly wage you’re offering the employee, as well as whether you intend to pay them daily, weekly, or monthly. Additionally, detail whether the company will reimburse the new hire for certain expenses or if it will be providing cash or non-cash incentives, contributions to their pension fund, and any other forms of remuneration.
- Workplace pension scheme. You are legally required to enroll all of your employees in a pension scheme and to make contributions to it, except under very limited circumstances. Indicate the details of automatic enrollment in this section. Include the date the individual was enrolled, the amount the company will contribute as well as the type of plan, how to opt out of the scheme, and which tax relief laws apply to them.
- Commissions and bonuses. Information about performance-related pay is frequently included as an addendum to the section in the employment contract that discusses remuneration. It’s crucial to be specific about the ways an employee can be expected to be compensated beyond their wage because it will protect you in the event a situation in which the staff member claims you failed to pay them a commission or bonus they were owed arises.
- Vacation. The statutory leave entitlement—or annual leave—for all individuals classified as “workers” under UK Employment Law is 5.6 weeks, or 28 days, per year. You are legally permitted to include the eight bank holidays employees get in this amount. The exact arrangement, including any additional paid leave the employee will receive for, say, becoming a parent, should be specified in this section.
- Place of work. Indicate whether the employee is working on-site or from home; if it’s the former, list the address of the office they’ll be expected to commute to and from.
- Sickness. UK employment law requires all companies to abide by Statutory Sick Pay legislation, which states that eligible employees who are too ill to work are entitled to receive up to £116.75 per week for up to 28 weeks. Your company may choose to offer additional compensation beyond this under its sick pay scheme.
- Confidentiality. Detail the company’s confidentiality and non-disclosure agreement (NDA) policies in this section. Additionally, indicate which law (England, Scotland, Wales, or Northern Ireland) governs the terms of the agreement and which country it can be enforced in. This is particularly crucial if you and the employee reside in different countries within the UK.
- Termination policy. State the terms under which an employee can be dismissed from the company, as well as how much notice they should expect. Under UK Employment Law, you are permitted to terminate an employment contract without giving any notice as long as you can show you have justifiable grounds for doing so, such as gross misconduct.
- Conditions and warranties. UK Employment Law allows you to decide whether you’d like a new employee to pass certain checks before the employment contract is considered legally binding. Under a conditional offer of employment, you can rescind the offer if the person doesn’t meet certain conditions like passing a background or health check or supplying the necessary references. An unconditional offer means that if they accept and you then try to back out, you can be sued for breach of contract.
- Offer’s expiration date. For the sake of clarity for both parties, put the date the job offer will expire in a place of the offer letter that’s clearly visible like in the first paragraph or two.
Onboard employees in the UK in 90 seconds with Rippling
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- Generate country-specific hiring agreements
- Run background check
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- Add to locally compliant overtime policies
- Send IP agreement
- Enroll in country-specific benefits
- Assign country-specific compliance training
- Order, configure, and ship work laptop
- Set up third party apps like Slack or Zoom
- Set up single sign-on
- Configure WiFi
- Add to payroll
- Issue and ship corporate card, and apply card limits and policies
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Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.
