Terms of the contract of employment

Question 1

How was the relationship between employer and labourer analysed by lawyers?

Answer 1

As a contract for the hire of services.

Question 2

What is the consideration under an employment contract?

Answer 2

Employer’s promise of a wage or other remuneration in exchange for a promise by the employee to personally perform work under the employer’s control and discretion.

Question 3

What is a major implication of the common law’s respect for freedom?

Answer 3

That nearly all mandatory restrictions upon types of working relations arise from legislation rather than from the common law.

Question 4

How is uncertainty in job specifications resolved? What kind of relation does this create?

Answer 4

That the employer has an implied power to direct labour, and an employee is under a correlative obligation to comply.
A power relation that imposes a heavy duty of compliance on the worker.

Question 5

Name some implied obligations in the contracts of employment from the employer’s side.

Answer 5

Employer:
Take reasonable care of health and safety.

Not, without reasonable cause, to act in a manner likely to destroy mutual trust and confidence

Give reasonable notice of termination of the contract.

Question 6

Name some implied obligations in the contracts of employment from the employee’s side.

Answer 6

Employee:
Obey lawful orders.
Act loyally towards the interests of the employer.
Serve the employer faithfully within the requirements of the contract.

Question 7

Does the idea of an employment relation freely entered into match the reality?

Answer 7

Sometimes, no. An employer may be in a stronger bargaining position, and an employee may undertake work reluctantly out of necessity rather than real choice to secure an income.

Question 8

What dichotomy lies at the heart of the structural uncertainty of employment contracts?

Answer 8

Exchange transactions v relational contracts.

Question 9

How does Macneil explain a contract of employment?

Answer 9

A relational, as opposed to a discrete contract, due to the implicit expectations of cooperation, fair dealing and long-term commitment: the ‘psychological contract.

Question 10

Is a contract of employment required to be in writing? If not, what right does an employee have here?

Answer 10

No. But statutory provisions give employees the right to written information. ERA 1996, s 1: the employee has a right to a statement of the principal terms and conditions of employment within two months of the commitment of employment.

Question 11

Are written documents required to be provided in advance of the commencement of employment?

Answer 11

No, hence arguably the legislation fails to allow prospective employees to make an informed choice over whether or not to accept an appointment.

Question 12

What does ERA 1996, s 3 require? Are these binding terms of the contract?

Answer 12

That the employer provide information about any applicable disciplinary and grievance procedures?

They are not binding. Johnson v Unisys (2011): statutory duty to supply this information was not intended to turn those procedures into contractual terms.

Question 13

What two constraints does legislation place on employers when attempting to satisfy the duty to supply information by merely referring to such documents?

Answer 13

1) If reference is made, then the employee must have a reasonable opportunity of reading the documents.
2) The employer should provide the main written particulars in one document.

Question 14

How binding are the written particulars?

Answer 14

They are not the contract itself, nor are they conclusive evidence of the terms of contract, nor do they bind the employer in some other way.

Question 15

How can UCTA 1977 help employees?

Answer 15

Usually under the normal principles of the law of contract, the small print of terms will be binding on the employee.

The Act invalidates exclusion clauses that purport to limit or exclude liability for negligently caused personal injuries (in employment context: health and safety).

But employees fall through the gap. In the absence of such protection, the small print, no matter how unreasonable, is likely to bind employees.

Question 16

What is the staff hand book?

Answer 16

A document containing instructions and information; a visible aspect to the construction of rules of the organisation and authority.

Question 17

How can the rule book be binding on employees?

Answer 17

First, some or all of the rules can be incorporated into the employee’s contract through express terms.

Secondly, its content may be indirectly binding by virtue of implied terms.

Question 18

How, in the absence of express incorporation, can the rule book determine contractual entitlements?

Answer 18

1) Collateral contract
2) Implied term of custom and practice in the workplace.
3) An aid to the construction of express terms.

The implied term that requires employees to conform to the instructions of management has the effect that an employee may be in breach of an implied duty of obedience for failing to comply with the rules.

Question 19

Dichotomy in using the handbook?

Answer 19

Protection of express contractual rights for employees vs need for management to preserve its discretionary powers to direct the workforce.

Question 20

How do the courts typically view employer hand books?

Answer 20

They more usually classify rule books as an exercise of managerial discretion that does not confer contractual rights.

Question 21

Is a collective agreement likely to be a legally enforceable contract itself?

Answer 21

No.

TULRCA 1992, s 179: collective agreement presumed not to be legally binding unless this is stated in writing.

Question 22

How can you incorporate a collective agreement into a contract of employment?

Answer 22

Express incorporation

In the absence of explicit statements: court draws inferences from conduct in order to determine whether there was implied incorporation, either a) through custom; b) course of dealing between the parties.

Question 23

What did Kaurv MG Rover Group (2004) show?

Answer 23

That courts have not readily accepted that collective agreements can confer individual contractual rights regarding dismissals for redundancy.

Question 24

What is the consequence of incorporating a term from the collective agreement if it seriously hinders discretion to determining staffing levels and deployment?

Answer 24

Malone v British Airways 2010: some terms were not apt for incorporation because they might be disastrous consequences for the employment if this term were enforceable. May have adverse consequences on their profitability.

Question 25

What was said in James v London Borough of Greenwich (2008) about the starting point of the employment contract?

Answer 25

‘[The parties] have, in essence, the freedom to contract in these respects within the ordinary principles of law.’

The question is to be determined by the application of ordinary principles of law.

Question 26

What was said in System Floors (UK) Ltd V Daniel (1981) about the written statements of employment particulars?

Answer 26

They provide strong prima facie evidence of what were the terms of the contract between the parties, but does not constitute a written contract between the parties.’