22 Jan 2018
You’ve found your new team member and are ready to draft his or her contract – but this is employment law. Ed Newbould provides guidance on how best to avoid any legal fallout.
Image: Alexey Zarodov / Adobe Stock
That document you sent in the post to your new employee – the one talking about his or her start date, the place of work, the hours of work – you know the one. If I told you that document was an employment contract, most would not bat an eyelid. They would nod in agreement. They’d tell me I was spot on.
But this is employment law. And eyelids should be batted at all times.
Of course, that document you are sending is important – we wouldn’t bother with it if it wasn’t – so it is a good place to start when considering an employment contract and what you need to be aware of.
What is it? It’s the statutory statement; written evidence of the terms of the employer/employee relationship. It is a legal requirement. Certain bits of information must be included (see below).
What else goes in there? It is common to see mobility clauses, restrictive covenants, sick pay information and rules on additional employment in the statement.
The key would be to make sure nothing is vague or ambiguous – vague and ambiguous is a sure route to becoming unenforceable. Restrictive covenants are worth noting – these can only be enforced if they are deemed reasonable to protect a legitimate business interest. So, making them far-reaching is unwise.
The evidence required in statutory statement is:
This is your statutory statement. It is not the only part of the employment contract. The employment contract is made up of express terms and implied terms.
You will find the express terms in a number of places, the most obvious being that eyelid-batting document – the written statement.
But express terms of the employment contract are also found in job offers, interview notes, job adverts, job descriptions, discussions in interviews and oral agreements. Essentially, an employment contract is an agreement, and these components all form part of the agreement. It is not always down to a single statutory statement.
Here are two examples of where this might impact you:
The job offer letter is a common source of problems. At White Cross Vets, we list the benefits we offer in our offer letters – birthday cakes and an extra day off on your birthday, access to countless discounts across the UK through our Perkbox benefits scheme, eight per cent non-contributory pension, access to our SimplyHealth health care scheme, free preventive pet care for insured pets, and so on.
But you must be aware this document can form part of the employment contract as an express term. So, we state these benefits are non-contractual, and may vary as we adjust and improve the benefits package.
Another example is seen in the case of Hawker Siddeley Power Engineering versus Rump (1979) IRLR 425. Here, the employee was told during the interview his role would not involve travel. But his written statement stated he would need to travel. A few months down the line, and the employee was dismissed when he refused to travel on request.
The result: because the oral agreement was an express term in the contract of employment, the dismissal was unfair. The employer lost because it did not appreciate all the components making up the employment contract.
The employment contract also consists of a number of implied terms, which might not be written down, but an employer and employee abide by. These implied terms take effect as soon as an employment contract is formed, and they ensure a balance in the relationship.
The key thing to consider here is it is not uncommon for implied terms to take precedence over express terms in court.
Take, for example, the case of United Bank versus Akhtar (1989) IRLR 507 EAT, where the employer asked the employee to relocate without much notice, but seemingly within the terms agreed in the express statement (where there was a mobility clause).
The employee resigned and claimed unfair dismissal, despite the clause and the employee won the case. Why? The implied term of mutual trust and confidence was broken by the employer. It was being unreasonable and, therefore, the implied term took precedence.
The key here? Be aware. Just because the employee has signed a statement, other parts of the employment contract (be it other express terms or implied terms) can take precedence. Do not rely on the statement alone.
The final part of the employment contract to consider is terms that are implied by custom. If something has been happening that the employee and employer have known about for a long period of time, and nothing has been disputed, it can become implied as part of the employment contract, regardless of what the statement might state.
Bat an eyelid. Appreciate all the ingredients that combine to produce the employment contract. And make sure you don’t get tripped up down the line.
