Employment Agreement Options in the UK

Types, seniority, variable compensation and more.

Updated on March 15th, 2023

Can we add company-specific information to the employment agreements? Will Velocity Global review these updates?

Your company name is stated within Schedule 1 of the employment agreement. To a certain extent, we can include your company name within standard contractual clauses; however, our local internal counsel will review such requests and any other new information to consider potential risks and ensure the employment agreement remains compliant.

What are the types of employment agreements we can offer? (e.g., fixed-term, indefinite, project-based)

We can offer indefinite-term and fixed-term employment agreements in the United Kingdom.

Can we recognize seniority in the United Kingdom?

Yes, previous lengths of service, also known as seniority, can be recognized in the United Kingdom, but this attracts certain consequences. Seniority directly affects your supported employee’s eligibility for statutory rights, namely: unfair dismissal rights, right to a redundancy payment and amount of that payment, and notice period lengths. For more information, please submit a ticket using the Help widget at the bottom of the page.

Can we include benefits in the employment agreement?

Yes. While not required by law, it is common to include supplementary benefits in U.K. employment agreements. 

Can we add variable compensation to the employment agreement? 

Yes. Variable compensation can be added to U.K. employment agreements. Bonuses can be provided to supported employees using cash, or other means of employee ownership in the company. Additionally, we can implement a mixture of bonus schemes.

Typically, we can provide the following types of bonus plans:

  1. Annual cash bonuses
  2. Annual discretionary bonuses
  3. Specific-purpose bonuses
  4. Sign-on Bonus

Commissions are more appropriately set out in a Variable Compensation Plan where targets and metrics are attached to the commissions.