Employees have no contract of employment

We took over the running of a small family business with 4 (non-family) employees last year. All have been working for the company for the past 3-4 years. They have no contracts of employment. We are looking at growing the business and would like to provide a contract of employment to existing and new employees.

However we may have a small problem with one of the current employees. They have stated that they will not sign any contract as they have not had to do this in the past and just want to carry on this way. The previous owner did not have any of this in place.

What can you advise us on this? Could we be in trouble as our company did not provide a contract of employment in the past?

We just want a heads up and may seek professional HR / Legal in the future.

Do you really need them to sign it? Can you just issue the contract?

We plan on issuing the contract for each employee but would like them to sign as well. We dont think that there will be any problems except for this one guy.

I guess the question should be phrased - how bad is it form an employers point of view not to have a written contract of employment in place with all employees?

Legally the penalty for not issuing written terms and conditions of employment is a maximum award of 4 weeks pay per employee. Employees do not have to sign the statement but you do have to prove that they got it. Having written contracts is very beneficial for an employer beyond that - just look at a lot of the discussions on askaboutmoney about employment and you will see how often contracts contain the solution to a row between employer and employee. Presuming the previous employer had nothing in writing, I would present a draft contract to all the staff. Remember they are not obliged to sign it and probably will not if you use the introduction of a written contract to attempt to change their terms and conditions. If someone will not sign it I would sit down with them and go through the contract and ask them for feedback on what they object to; it could be that you may be able to agree a contract that you are both happy to sign. If he refuses to sign on principle, you cannot make him sign so I would have a paper trail to show that you tried to introduce it (in case of a case) and try again later when he has got to know you better and may trust you more. Outside of terms and conditions of employment you are free to introduce a written handbook with information on rules, policies etc.

If he refuses to sign ask him to sign a letter stating that you asked him to sign his contract and put it on his file.