Implied Terms Flashcards
What is an implied term?
Parties to an employment contract will often but not always, put the terms and conditions that govern the relationship into writing.
Some rights and duties are explicit (ie express) and others are silent but underlie the functioning of the contract (i.e. implied).
Because the employment relationship is so extensive it is impossible to capture all the ‘intentions’ of the parties or ‘necessities’ of the employment relationship on that statement.
When the express terms of the contract do not provide an explicit answer, implied terms can fill in the gaps in employment law, which allow the courts to ‘read in’ certain terms that are necessary to make the contract of employment work.
What are the three ways of incorporating implied terms into an employment contract?
There are three ways of incorporating implied terms into the contract of employment:
- Implied terms will be incorporated by fact at common law where terms are so obvious that the parties to a contract did not see the need to state them expressly.
- Implied terms will be incorporated by custom and practice. A term will be implied by custom if it reasonable and relevant to the ‘market, trade and locality in which it is made, unless the custom is inconsistent with the express terms of the contract’
- Implied terms will be incorporated by law. The terms implied by law are obligations so fundamental that they apply to the status of being in employment. These type of terms will either be implied in statute, as with provisions in the Equal Pay Act 1970 implying a pay equality clause into the contract of employment or through common law.
What are the requirements for implied terms incorporated by fact at common law?
Implied terms will be incorporated by fact at common law where terms are so obvious that the parties to a contract did not see the need to state them expressly.
The test for implication of terms is ‘necessity’ and not reasonableness.
There are two tests are used to determine whether there is a term of specific implication:
(a) The business efficacy test was seen in “MOORCOCK”. It determined whether the term was necessary to make the contract work. The test is rarely used.
(b) The officious bystander test (“oh, of course!”) was seen in SHIRLAW V SOUTHERN FOUNDRIES. Where an officious bystander to suggest the express provision of the term he would have been suppressed with a common “Oh, of course!” because the term seemed obvious and necessary to both parties. If the parties would not have agreed a term, case law suggests that it cannot be implied by fact.
In the case of MEARS V SAFECAR SECURITY LIMITED (1982), the COA held that the correct approach was to consider all the facts and circumstances before implying a term into the contact. The original justification of implied terms was to give business efficacy to the contract but there is now a much wider approach. However, it is not possible to imply terms which are too vague or unpredictable.
What case supports the business efficacy test?
MOORCOCK
What case supports the officious bystander test?
SHIRLAW v SOUTHERN FOUNDARIES
What case decided that the business efficacy test is no longer efficacy and that the correct approach was to consider all facts before implying a term into the contract?
MEARS v SAFECARE SECURITY LIMITED
What are the implied duties for employers?
There is generally no implied duty to provide work, but there is an implied duty to pay wages.
Mutual Trust and Confidence is implied into every contract of employment.
An Employer owes a duty to protect the health and safety of its employees.
There is a duty by the employer to provide a safe system of work for all its employees:
Under the common law the employer must provide:
- A safely operating system of work
- Safe tools, plants and materials
- Adequate supervision
- Trained and efficient personnel
There is a duty by the employer to provide safe tools, plants and materials for employees. This extends to goods, vehicles, machinery etc.
If the employee is injured by the practical joke of another, the employer is liable if it knew that the person was responsible was prone to such horseplay.
An employer’s duty of care can extend to physical and mental health.
There is normally no implied term that an employer must provide a reference. However, if a reference is provided, it must be given with reasonable care Spring v Guardian Assurance Plc (1994).
There is an implied term in all contracts of employment that employees’ grievances will be dealt with promptly and properly.
There is an implied duty on an employer to inform an employee about an employee’s contractual rights to pension benefits. But this is a limited duty and will only arise in very specific circumstances.
There is normally no implied term that an employer must provide a reference. However, if a reference is provided, it must be given with reasonable care.
THOMPSON V SMITHS.
There is a duty by the employer to provide a safe system of work for all its employees.
The employer was held liable for failing to provide ear protectors to guard against deafness.
BRADFORD V ROBINSON
There is a duty by the employer to provide safe tools, plants and materials for employees. This extends to goods, vehicles, machinery etc.
He suffered frostbite after driving 500 miles in freezing temperatures in a van with no hearing and a leaky radiator.
. His employer was held liable. Merely providing equipment is not enough; it must be periodically checked and maintained.
HUDSON v RIDGE MANUFACTURING Co
If the employee is injured by the practical joke of another, the employer is liable if it knew that the person was responsible was prone to such horseplay.
WALKER V NORTHUMBERLAND CC (1995)
An employer’s duty of care can extend to physical and mental health.
The case of WALKER V NORTHUMBERLAND CC (1995) shows how this duty of care needs to be adhered to where the employer is aware that the employee has been suffering from work-related stress.
BARBER V SOMERSET COUNTY COUNCIL (2004)
In BARBER V SOMERSET COUNTY COUNCIL (2004), the House of Lords confirmed that an employer can be liable for work-induced mental illness, but only where this was reasonably foreseeable, which normally required actual knowledge, not only of the stressful working conditions, but also that the employee was suffering from stress.
Spring v Guardian Assurance Plc (1994).
There is normally no implied term that an employer must provide a reference. However, if a reference is provided, it must be given with reasonable care
SCALLY V SOUTHERN HEALTH AND SOCIAL SERVICES BOARD [1991]
There is an implied duty on an employer to inform an employee about an employee’s contractual rights to pension benefits. But this is a limited duty and will only arise in very specific circumstances.
What are the implied terms imposed on Employees?
An employee has an implied duty to obey reasonable orders. Reasonable here relates to what an employee is being asked to do given his existing terms and conditions. If he was asked to do something totally outside of his normal scope of employment, it is more likely to be seen as being unreasonable and therefore refusal will not amount to a breach.
An employee has an implied duty to exercise reasonable care. If an employee acts negligently, the employer may have the right to dismiss the employee and also claim an indemnity if the employer is found liable in damages as a result of negligence. Lister v Romford
An employee has an implied duty to act in good faith/fidelity. Common examples are, not to disrupt the employer’s business interests and carry out industrial action (strikes)
If there is no express term as to the notice period, section 86 Employment Rights Act 1996 provides statutory notice period to employees.
