What Are the Consequences of Not Signing a Contract?

You’ll know all about the importance of employment contracts, but perhaps not the finer details.

For instance, what are the consequences when an employment contract lacks a signature?

In this guide, we take a look at the implications and the British laws surrounding the issue.

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The legal implications of unsigned employment contracts

A contract of employment is an agreement between yourself and your staff members. It’s the very basis of your working relationship and determines the likes of:

• Annual wage.
• Working hours.
• Location of workplace.
• Amount of annual leave.

But does an employee have to sign a contract of employment?

Despite it remaining a popular belief, not all contracts of employment have to be in writing for them to be legal under British law.

However, it’s certainly much more beneficial to have a written record of your agreement. It’s also against the law to not provide it.

Once a new starter accepts your offer, then your contract starts. So it’s useful to be able to refer back to it at a later date if the need arises.

But what happens if an employee doesn't provide a signature? If that's the case, is there any law in place preventing your employee from, for example, leaving your business unannounced?

It’s a common question we receive from employees, “What happens if I don’t sign my employment contract?”

Simply put, with no contract signature you and your employee don’t have the right to change the document. Even though you may not have a signature—or even a written contract—this doesn’t mean either side can ignore any previous agreement made.

For example, if an employee agrees to work for you and starts their role, then they’ve essentially acknowledged they’re aware of your terms and conditions and accept them.

So, in summary, does a contract of employment have to be signed? No.

But, as mentioned above, it’s always a good idea to have everything on record in the event you need it at a later date.

Avoiding contractual complications

Other common questions we receive from employees include:

• “Can an employer force you to sign a new contract?”
• “Do I have to sign a new employment contract?”

At no point does an employee have to sign an employment contract you provide them.  It is also within their rights to refuse to sign a new employment contract.

If that happens then you can, of course, speak to the individual and discuss a way around their current issues with what you offered them.

But remember that someone to sign, even if it’s to any changes you have made to their contract, then your agreement is void.

Who can sign an employment contract on behalf of company?

Under British laws, you don’t always need a company representative to sign your contract for you.

Section s43(1)(b) of the Companies Act 2006 states someone can sign on behalf of your business if an individual is acting under your authority.

If the person has implied, or express, authority to sign on your behalf then they can even go as far as to make contracts for you (as well as sign them).

This will class the contract as “signed on behalf” of your business. This is rather than the “executed by” you.

As a final note regarding this, signing an employment contract under duress—using force or pressure—is against the law. It will also immediately invalidate the contract.

Need further help?

Want more help with employment contracts? You can get in touch with us today for expert guidance: 0800 028 2420.

Alongside this, we offer a full HR documentation service and time-saving HR software. As part of our service, we provide a full Health & Safety package.