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Indefinite Employment Contract UK: Guide for Employers

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Part ofUK Employment Law Guide for Employers (2025)

Written by Brad Askew Solicitor (non-practising)
Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice.
England & Wales
When a UK business takes someone on permanently, the working relationship is usually captured in an indefinite term employment contract. Unlike a fixed-term or casual arrangement, this type of agreement runs on with no set finish date, lasting until the employer or the employee brings it to an end through the proper process. It is the default backbone of most permanent roles in the UK, from a first office hire to a senior management appointment. Getting the written terms right matters, because they shape pay, hours, notice, holiday, conduct expectations and how disputes get handled. This guide walks through what sits inside a typical permanent contract, the statutory framework it has to respect, and the practical points to think about before you ask someone to sign on the dotted line.

What this document is

An indefinite term employment contract is the written agreement between a UK employer and an employee for ongoing, open-ended work. There is no expiry date. The relationship continues until one side terminates it, whether that is through resignation, dismissal, redundancy, retirement or mutual agreement, following whatever notice and procedure the contract and the law require.

This style of contract is the standard choice for permanent roles. It gives the employer a settled workforce it can train and invest in, and it gives the employee stability of income alongside access to statutory rights that build up over length of service, such as protection against unfair dismissal and entitlement to statutory redundancy pay.

The document itself will usually combine contractual terms the two sides negotiate, such as salary, job duties and benefits, with terms the law requires to be communicated in writing. It can be used for full-time or part-time workers, office-based or remote, and across almost any sector.

How to use this document

  1. Confirm the basics of the role. Before drafting anything, pin down the job title, reporting line, start date, place of work, normal hours and the salary or wage. Decide whether the role is full-time or part-time, whether there is a probation period, and how pay will be reviewed. These foundations drive almost every other clause in the contract.
  2. Build in the statutory written particulars. UK law requires employers to give employees a written statement of the main terms of employment on or before their first day. Make sure your contract covers the points set out in the Employment Rights Act 1996, including pay, hours, holiday entitlement, sick pay arrangements, notice periods, place of work and any probationary terms, so the single document meets your legal duty.
  3. Set out conduct, performance and protection clauses. Add provisions dealing with confidentiality, data protection, use of company property, intellectual property created at work, and, where sensible, post-termination restrictions. Include how disciplinary issues and grievances will be handled, and cross-refer to any staff handbook so employees know where to find the detail.
  4. Explain how the contract ends. Because there is no fixed end date, the termination clauses do a lot of work. Be clear about notice on each side, statutory minimums, payment in lieu of notice, garden leave, summary dismissal for gross misconduct, and what happens to accrued holiday and benefits on exit. Clarity here prevents most leaver disputes.
  5. Review, sign and keep it live. Both parties should read the contract properly before signing, and each should keep a copy. Remember the agreement is not a one-off: when roles, pay, hours or duties change, update the contract in writing. Changes generally need the employee's agreement, so follow a proper variation process rather than amending terms by stealth.

Common questions

Q What is the difference between an indefinite and a fixed-term contract?
An indefinite contract has no set end date and continues until either party terminates it using the correct notice and procedure. A fixed-term contract runs for a defined period or until a specific task is completed, then automatically ends unless renewed. Permanent hires almost always sit on indefinite terms, while fixed-term contracts tend to cover maternity cover, seasonal work or specific projects.
Q Do I have to give employees a written contract on day one?
Yes. Under the Employment Rights Act 1996, employers must give employees and workers a written statement of the main terms of employment on or before the first day of work. A properly drafted indefinite term employment contract satisfies this duty as long as it covers the required particulars, such as pay, hours, holiday, notice and place of work.
Q Can I include a probation period?
Yes, probation periods are common and perfectly lawful. A typical clause sets an initial period, often three or six months, during which performance is assessed and shorter notice may apply. Statutory rights still operate during probation, including the right to the National Minimum Wage, paid holiday and protection from unlawful discrimination, so the clause is not a free pass to ignore employment law.
Q What notice periods apply if the contract does not say?
If the contract is silent, statutory minimum notice still applies. After one month of service, an employee must give at least one week's notice. The employer must give at least one week's notice after one month, rising with length of service up to a statutory cap. Most employers contract for longer notice than the minimum, particularly for senior roles.
Q Can I change the terms of the contract later?
Contract terms can be varied, but usually only with the employee's agreement. Imposing changes without consent risks breach of contract and constructive dismissal claims. The safer route is to consult, explain the business reason, propose the change in writing, and record the employee's acceptance. Some contracts include limited flexibility clauses, but they are interpreted narrowly by tribunals.
Q Does the contract need to mention the staff handbook?
It is good practice to refer to any staff handbook and to make clear which parts are contractually binding and which are simply guidance. Policies on discipline, grievance, equal opportunities and IT use often sit in a handbook rather than the contract itself. Being explicit about status helps avoid arguments later about whether a particular policy formed part of the agreed terms.
Q What happens if I never issue a written contract?
A contract still exists based on what the parties have agreed verbally and by conduct, but the employer is in breach of the duty to provide written particulars. An employee can bring a tribunal claim, and where this is combined with another successful claim, the tribunal can award additional compensation. Beyond the legal risk, the lack of written terms makes disputes far harder to resolve.

Sources

This guide is based on primary UK law and official guidance.

Brad Askew, Solicitor (non-practising)

Written & reviewed by

Brad Askew Solicitor (non-practising)

Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice. LegalDocuments.co.uk is not a law firm and does not provide regulated legal advice.

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Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.