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P3 - Explain the difference between contracts of employment

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Ryan Gill

on 23 January 2014

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Transcript of P3 - Explain the difference between contracts of employment

P3 - Explain the difference between contracts of employment and contracts for services. Use the examples below to draw comparisons and explain the differences and you must also explain the consequences of breaching each contract.
Contract of employment
Loss of Money
The most immediate consequence of an employment-contract breach is loss of money. Even if employees are without fault, their cases can take months or years to be resolved by courts. Contract workers without adequate savings are particularly vulnerable and have little short-term recourse, hence it wise for contract employees to have savings to support themselves.

Negative Reputation
Employees victimized by fixed-term contract breaches may find their reputations sullied, particularly if they occur more than once. If breaches are caused by employees, then they have no one to blame but themselves. If employers are at fault, employees can have a difficult time trying to counter the negative reputations that may result. To protect themselves, contract workers should avoid companies with questionable hiring practices.
Consequences of breaching each document
Similarities of both documents
Both of the documents are considered as contracts even though they are different forms of contracts.

Both contracts need to be treated fairly for the benefit of the worker, otherwise there will be consequences by law.

Both contracts pay money to the worker.
Differences of both documents

Contract of Employment
There is always a contract.
The employer and employee have rights.
The employer and employee have obligations.
Explicitly agreed in the contract.
Implied terms are also part of the agreement.
The employer tells the employee what work is to be done and how to do it.
The employer can find another employee to do the work if the first employee is unable to continue.
The employer pays for the main types of tools and machinery to complete the job.

Contract for Service
Not usually any form of complex contract involved.
Contract states fee and end date.
You are NOT an employee.
Responsible for your own tax, National insurance and personal insurance.
Do not receive sick pay, maternity or holiday pay/entitlement.
The individual goes out and finds their own work.
The individual has to find someone else to do the work if they themselves are unable to do it.
The individual supplies their own tools and machinery.

Contract for services
In this presentation we will be discussing the differences and similarities between contracts of employment and contracts for services. Also we will be giving examples of consequences if any of these documents are breached.
Contract of employment
An employment contract affects both the employer and the employee because anyone with a job has to have some form of employment contract to be a part of the business they are working for, an employment contract is a binding of the employee and the business, and there are a number of different employment contracts.

Part time
A part-time job is a form of employment that carries fewer hours per week than a full-time job. Workers are considered to be part-time if they commonly work fewer than 30 or 35 hours per week.

For example, Nissan also use part time contracts of employment on workers that are working for the business on a permanent basis, but the contract is called part time because it is used on workers that work fewer than 30 or 35 hours per week, therefore Nissan can give part time workers any hours they want to each and every week.

If an individual has a contract of service then they are self-employed. An example of this could be Mellors in the college canteen who provide the dinner ladies, therefore the dinner ladies are not contracted by the college, they are contracted by Mellors and work for the college.
Here are some examples of what will happen if a contract of employment or a contract for service is breached:
Full transcript