Contracts of employment

Introduction

A contract of employment consists of:

• express terms
• terms implied by the courts
• terms implied by statute.

Express terms

Express terms are those agreed by the parties themselves. The agreement may be written or oral.

The Employment Rights Act 1996 (ERA 1996) requires an employer to provide an employee with a written statement of certain particulars of their employment within two months of the commencement of employment.

The statement must include details of:

• pay rates and interval (i.e. weekly, monthly, etc.)
• job title
• hours of work
• place of work
• length of notice
• details of disciplinary and grievance procedures
• date of commencement of employment.

Any change must be notified by written statement within one month.

The statement is not a contract unless both parties agree and it is called a contract. It is strong prima facie evidence of the terms of the contract, but is not conclusive.

Terms implied by the courts

The courts have implied various duties into the employment contract.

Duties of the employee

• to obey lawful and reasonable orders
• mutual co-operation (or the duty to perform the work in a reasonable manner)
• to exercise reasonable care and skill
• good faith - a duty to give honest and faithful service. The employee cannot use the employer's property as his own, and must account to his employer for any money or property which he receives in the course of his employment. The employee may do other work in his own time. However, the law imposes a duty not to do spare time work which competes with that of his employer and may cause his employer damage. An employee must not disclose trade secrets to a third party nor misuse confidential information he has acquired in the course of his employment.
• rendering personal service: employees may not delegate the performance of their work to someone else unless they have their employer's express or implied permission to do so.

Duties of the employer

• to pay reasonable remuneration
• to indemnify the employee
• to provide a safe system of work. At common law the employer is under a duty to take reasonable care for the health and safety of his employees. Breach of this duty exposes the employer to liability in negligence to his employees. In addition, the employer is under various statutory duties, e.g. the Factories Act 1961, the Offices, Shops and Railway Premises Act 1963, and the Health and Safety at Work Act 1974 all regulate work conditions.
• to give reasonable notice of termination of employment
• mutual co-operation.  The employer has a duty not to behave in a manner calculated to damage the relationship of trust and confidence, e.g. by abusively reprimanding an employee.
• provision of work: there is no general common law duty to provide work. However, such a term may be implied, under the business efficacy test, where failure to provide work would deprive the employee of a benefit contemplated by the contract. For example, if the contract expressly provides for remuneration on a piecework or commission basis it may be possible to imply a duty on the employer to provide sufficient work to enable the employee to earn a reasonable sum.
• provision of a reference: there is no duty to provide a reference but, if one is provided, it must be truthful, as shown in:

Terms implied by statute

• The Employment Rights Act 1996: Gives employees certain rights, such as a right not to be unfairly dismissed, a right to a redundancy payment if made redundant and a right to a minimum period of notice to terminate the contract.
• The Working Time Regulations 1998: Limit the hours of work to an average of 48 a week. It also gives the right to four weeks' paid leave a year and one day off each week.
• The Employment Act 2002: gives parents of children under seventeen or disabled children under eighteen the right to request flexible working arrangements. The employer must give serious consideration to such a request and can
  only reject it for clear business reasons. The Act also introduced paternity and adoption leave.
• The Equal Pay Act 1970:  deals not only with pay, but other terms, e.g. holiday and sick leave. Implies an equality clause into all contracts of employment if workers of the opposite sex do the same job or a different job of equal value.
• The National Minimum Wage Act 1998: imposes minimum levels of pay.

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Tags:	express terms;implied terms;Employment Rights Act 1996;Working Time Regulations 1998;Employment Act 2002;Equal Pay Ct 1970;National Minimum Wage Act 1998