Chapter 2 - The Employment Contract and its Clauses Flashcards
What is Employment Law based on?
Law of contract - most relationships are governed by a contract and statutory law. The relationship is unequal, therefore statutory law was created to attempt to compensate for the imbalance of power.
General rule that the contract doesn’t need to be in writing to be valid (implied terms)
Is there a general requirement for an employment contract to be in writing?
No general requirement for a contract of employment to be in writing - it is formed when the offer of a job is accepted.
To avoid dispute, it is useful for the terms of employment to be drafted into a written contract of employment.
What is a s1 Statement?
Despite the lack of formal requirement for an employment contract, the ERA 1996 requires employers to provide their employees with written details of terms of their contract (s1 ERA 1996)
Must be provided to an employee’s if their employment is to continue for more than one month.
Must be given to the employee no later than 2 months after employment begins.
What information must be contained within a s1 Statement?
- Name of employer and employee
- Date when employment began
- Rate, method, frequency of pay
- Hours of work
- Holiday entitlement
- Job title/brief description
- Place of work
Some terms do not need to be included in this statement (e.g pensions/pension schemes, notice periods, disciplinary procedures) but must be referred to another document accessible by the employee.
What is the procedure to follow then changing the s1 Statement?
s4 ERA 1996 states the employer must give the employee a written statement containing details of the change at the earliest opportunity, no later than one month after the change.
Agreed changes, not a unilateral right for the employer to make changes to the contract.
What terms does a contract of employment consist of? Give examples.
Express Terms - agreed between the employee and employer (probationary period)
Implied Terms - terms that a court assumes were intended to be included in the contract (duty to be willing to work)
Incorporated Terms - incorporated into the contract (staff handbooks/policies)
Does a contract need to be signed to be enforceable?
If a contract is in writing, there is no requirement for it to be signed.
Explain what an express contractual clause is.
Give examples of an express clause.
Employers may require additional express clauses to the essential terms in an employment contract. In these cases a written contract is required rather than relying on a s1 statement.
Examples: Probationary PILON Confidentiality Garden Leave Gross Misconduct
What is a probationary period clause? (express term)
Trial period at the start of employment, typically lasts 3-6 months, employee is assessed and notified if their appointment will be made permanent.
It needs to be clear on what has to happen for an employee to be confirmed in post (assessment? confirmation automatic or dependent on further action?)
What is a PILON (Pay In Lieu Of Notice) clause? (express term)
The employer has the right to pay an employee a lump sum rather than require him to work his notice period (In the absence of a specific PILON clause, this would be breach of contract.)
Locke v Candy & Candy Limited [2010]
What is the effect of a PILON clause?
The effect is to terminate the contract early, but compensate the employee for loss of notice.
What is a confidentiality clause? (express term)
A confidentiality clause requires employees to keep the affairs of their employer confidential both during and sometimes after employment.
This is an implied term, but it is not recommended to rely on this, therefore a confidentiality clause should be expressly drafted in a contract.
What are the 3 requirements for a confidentiality clause to be enforceable?
- Legitimate business interest in requiring protection
- The proposed clause is no wider than reasonably necessary to protect those interest
- Must not be a restraint on trade
What is a garden leave clause? (express term)
A garden leave clause allows an employer to require an employee to stay at home during their notice period, whilst remaining an employee, but removed from their regular duties.
Can be used when an employer doesn’t want to rely on a PILON clause which will allow employees to work elsewhere.
What happens if an employee breaches their garden leave clause?
Employer may seek an injunction to prevent them from working elsewhere.
When may a court insist on a garden leave clause even if there wasn’t an express contractual clause?
When there is a clear case of wrongdoing e.g. intention to join a competing company
(SG&R Valuation Service Co v Boudrais [2008])
Is there an implied contractual right to work, even if there is a contractual garden leave clause?
Have to consider whether skills necessary to perform their role needed to be used regularly or they would deteriorate or become de-skilled by being put on garden leave.
(William Hill Organisation Ltd v Tucker [1998])
What 3 points need to be considered when deciding on whether to enforce a garden leave clause?
- The provisions of the contract were common in the industry
- The employee would continue to be paid his salary and would not be out of pocket
- No evidence that the employee’s skills would deteriorate whilst on garden leave
As established in ICAP Management Services Ltd v Berry [2017]
What is a gross misconduct clause? (express term)
Conduct so serious it will justify summary dismissal (dismissal without notice)
Brito-Babapulle v Ealing Hospital NHS Trust [2013]
Dismissal without notice is normally a breach of contract, however if an employee is dismissed for gross misconduct, the employer is justified
What is deemed gross misconduct by the ACAS?
- Theft or fraud
- Breach of confidence
- Harassment or bullying
- Cause loss or damage through negligence
- Bringing the company into disrepute
What are Implied contractual clauses?
Areas not covered by an express term in the contract, but can be terms/provisions a court assumes were intended to be included within a contract.
- Implied by custom and practice
- Implied as a matter of law
What is the difference between express and implied terms of contract? Give an example of each
Express - those which have been agreed between the employer and employee (PILON)
Implied - those which a court assumes were intended to be included within a contract (duty to pay wages)
What are the 4 implied duties of an employer?
- Duty to provide work
- Duty to pay wages
- Duty of safety and care
- Duty of mutual trust and confidence
What are the 4 implied duties of an employee?
- Duty to be ready and willing to work
- Duty to exercise reasonable care and competence
- Duty to obey reasonable instructions
- Duty of loyalty and fidelity
