2nd April 2026
Running a business is demanding enough without paperwork problems turning into people problems. Employment contracts and service agreements often get treated as “admin”, yet they quietly shape almost every difficult moment an employer faces, from performance issues and grievances to redundancy, exits, and tribunal claims.
In 2026, that matters more than ever. Workforces are more flexible, roles change faster, and businesses lean on contractors and consultants more frequently. When the documentation does not match how people actually work day‑to‑day, the risk is not just confusion. It can become cost, delay, and reputational stress, usually at the worst possible time.
Mike Hornsby, Employment Law Specialist, explains the key points employers should focus on when hiring, restructuring, or refreshing documentation this year.
In England & Wales, employees and workers must receive a written statement of employment particulars on or before day one. This sets out essential terms such as pay, hours, holiday, place of work, and notice.
The trap for employers is simple:
The written statement is not the full contract. It is a statutory summary. You still likely to need a complete contract and supporting policies for the business to be fully protected.
Common gaps include:
A clear contract sets expectations early and prevents disputes later.
Problems rarely arise because employers intentionally do the wrong thing. Issues usually come from contracts that no longer reflect reality.
Courts and tribunals regularly look beyond labels and paperwork to the actual working relationship. When documents fall behind the business, risk increases.
Most fixes are straightforward: step back, check whether the documents reflect how people are engaged and managed, and update them before pressure builds.
Employers use service agreements for senior roles, consultants, and contractors. These agreements typically cover:
The risk arises when the paperwork suggests one thing, but day‑to‑day arrangements suggest something else.
If a contractor is controlled closely, provides personal service, and is integrated into the team, the “self‑employed” label may not hold.
Another layer in 2026 is tax compliance. The off‑payroll rules (IR35) look at whether someone would be an employee for tax purposes if engaged directly. Responsibility for determining this can sit with the client.
Employment rights and tax status are different, but the message is the same: Your contract, onboarding, and daily management must align.
Some areas of employment documentation consistently create problems for employers. Issues usually arise when the wording is vague, incomplete, or out of step with how the organisation actually operates.
Here’s some of the terms that most frequently trigger disputes:
1) Pay and remuneration: clarity around salary, overtime, bonus/commission, when payments are made, and what happens if the scheme changes. The statutory written statement framework expects pay details to be set out clearly enough that entitlement can be understood.
2) Hours and flexibility: if hours can vary, the contract should explain how variation works in practice, not simply reserve a broad right.
3) Holiday, holiday pay and working time: holiday entitlement is often straightforward for standard patterns, yet it becomes more complex for atypical or irregular arrangements. Working time rights are set out in the Working Time Regulations 1998, and misunderstandings about holiday calculation have been a recurring source of claims nationally.
4) Notice and exits: statutory minimum notice is set by the Employment Rights Act 1996, although contracts often provide longer notice for senior roles. Where payment in lieu is intended, it should be addressed carefully.
5) Restrictive covenants: these are frequently copied from old templates and can become unenforceable if drafted too widely. Senior exits are one area where tailored drafting is particularly important.
A contract that spells out these fundamentals clearly helps employers manage confidently, avoid unnecessary conflict, and act quickly when issues arise.
Hybrid working is now normal for many businesses, which means your documents need to address:
Monitoring and employee data are an area where employers should tread carefully.
The ICO’s guidance for employers highlights that monitoring can be intrusive, and that employers should be able to justify it and do it fairly and transparently.
The same ICO employment guidance emphasises lawful handling of workers’ personal information in employment records, including appropriate retention and security.
This is one reason a contract refresh is often worth doing as a joined‑up exercise: contracts, policies, and privacy notices should not contradict each other. They should work together so that managers understand what is expected and staff are not surprised by how information is collected or used.
Most employers review contracts only after something goes wrong: a grievance, a resignation, a redundancy exercise, or a disputed payment. By then, options can be narrower. Review tends to be most effective at these moments:
A light‑touch review can often identify quick wins, small wording changes that prevent big misunderstandings.
Employment documents are more than a formality. They set the tone for the working relationship, support fair decisions, reduce grey areas, and give managers clarity.
If your contracts, handbooks, or service agreements no longer reflect how your business operates in 2026, our employment teams across The MAPD Group can help you update them quickly and sensibly, especially if you are preparing for growth, hiring, or organisational change.
Call us now or make a quick enquiry online for expert guidance you can trust.
