Contracts of Employment - Terms & Conditions

A contract of employment requires the same fundamental points as other types of contacts within business. The contract is an agreement that is entered into either verbally, in writing, or by conduct. Whilst many people may state that ‘a verbal contract is not worth the paper it is written on’, this is not actually a true statement. If no contact exists prior to employment one will come into existence as soon as an employee starts work. This is because the employee has demonstrated acceptance of the job on the terms and conditions offered by actually starting work. However, a written statement is actual proof that a contract exists and provides greater clarity for the parties involved.

The basic contract requires-

An offer
Acceptance
Intention to be legally bound
Consideration

It must also be free from vitiating factors, i.e. mistakes, misrepresentation and illegality

Terms and Conditions

A contract of employment consists of terms and conditions. Terms are bilateral. They are an agreement between the employer and the employee. Conditions are unilateral. They are instructions laid down by the employer. The following example helps to demonstrate the difference.

A term – You are entitled to 4 weeks holiday per annum
A condition – You must take 4 weeks holiday per annum

Terms can be expressed, implied or statutory. They should be clear, not ambiguous and should be reasonable within the industry.

Expressed Terms

These can be written or verbal and are part of the employment contract. The following are examples of expressed terms-

You are entitled to 4 weeks holiday per annum

Implied terms

These were not expressed in the contract. However in court it may be deemed that a term was implied. This means that the term was so obvious that it should been there or that it has to be implied to make the contract effective. The following are examples of implied terms from the employee and the employer-

Employer implied terms
To pay the employees wages – this is not a duty to provide work. It does not apply to commission paid work
To indemnify the employee – to protect them legally
To take reasonable care
To show good faith or mutual trust
To provide accurate references

Employee implied terms
To obey lawful orders – respond to reasonable requests
To take reasonable care – look after employer’s property, be competent at job and work with due diligence
To show good faith - loyalty, fidelity

Statutory terms

These terms exist through legislation. Therefore an employer cannot provide a contract with terms that contradict statutory terms. If statutory terms are not stated within the contract then they will exist as if they were in the contract. The following are examples of statutory rights when prevailing legislation applies

To statutory minimum notice periods
Not to have unauthorised deductions from wages
Not to be discriminated against on the grounds of sex, race, marital status or disability

The different types of terms and conditions detailed above are examples only and should not be deemed exhaustive.

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