Employment Contract – must it be in writing?
Generally , an employee is given a written Employment Contract , even if it is no more than a letter of welcome. Indeed the Terms of Employment (Information) Act 1994 requires an Employer to give a written statement of the Employment terms ( an Employment Contract) within 2 months of the commencement date.
However, an Employment Contract can also be an oral one. In either case , the Law inserts certain types of clauses into the Contract , even if the Parties never even thought of them. These are called IMPLIED TERMS
Such IMPLIED clauses have been relied on by the Courts to allow them decide a dispute between an Employer and Employee, where there is no clear agreement between them as to what was in the Employment Contract.
What kinds of Terms can be implied in the Employment Contract?
- Duty of Care – the Employer must take reasonable care for the Employees’s safety which means having a safe place of work ; safe equipment; safe systems of work and competent co-employees.
- Duty to maintain trust and confidence- “the employer’s right to manage has to be balanced with the employee’s right not to be unfairly exploited by the employer” ( House of Lords in Malik v Bank of Credit and Commerce Intl SA- 1997).
- Duty of Good Faith and Loyalty – an employee should not reveal confidential information obtained during the employment contract unless authorised to do so. This includes trade secrets, client lists, prices, financial information, marketing methods or plans and future development plans.
- Mutual Duty of respect – both employer and employee should act in a way that does not bring either in undeserved disrepute
- Duty to provide a Reference – UK Case law suggests that in certain circumstances, an employee can require an employer to give a reference, usually at the request of a prospective employer. While there is yet no clear Irish decision on the topic, it is likely that the argument would find favour in our system. It is also clear that an employer owes a duty not to give a reference that is misleading or inaccurate.
- Obligations that are inserted because they are in our Law already – these include
- minimum Notice periods
- equality protections
- the right not to be unfairly dismissed
- the right to redundancy payments
- working time rights including the right to rest breaks, to holidays, maximum weekly hours
- Protective Leave – maternity rights, parental leave, Carer’s Leave
- Jury Leave
- The right to payment of wages
- Rights for fixed-term or part-time workers
- Health and Safety rights and obligations, inserted by many Regulations on the subject especially in certain more dangerous occupations
- Obligations arising under Codes of Practice – these Codes are not set out in legislation but are what Irish Courts and Tribunals consider to be best practice within an Employment Contract. One of the most important is the Code of Practice on Grievance and Disciplinary Procedures ( Declaration) Order, 2000. It sets out the principles of fair procedures for employers and employees generally including :
- that employee grievances are fairly examined and processed
- that details of any allegations or complaints are put to the employees concerned
- that such employee is given a chance to respond fully to any allegations/complaints
- that such employee is given a chance to be represented during the process
- that the employee has a right to fair and impartial assessment of the issues concerned, taking into account any representations made by the employee, plus any other relevant and appropriate evidence and circumstances
There are other Codes of Practice dealing with issues such as Bullying in the Workplace, Health and Safety matters, Equality problems or issues and suchlike.
8. Terms implied to the Employment Contract by Custom or Practice – any such term must be so well known and generally accepted, that if it is not in the written Contract, it can be taken to be one of the terms between employer and employee. So, not every custom can or should be implied.
Examples of these are rights to sick pay, the right of an employer to suspend and employee and the right in some employments to ex-gratia payments on termination, especially on redundancy.
For such a term to become part of the Contract, it must reflect a clear, recurring, uninterrupted practice that has been the norm for a number of years.
9. Collective Agreements – often, in the manufacturing or other labour-intensive industries, unions negotiate certain agreements that both employers and workers then agree should form part of their Employment Contract. In the past one of the largest such has been the National Wage Agreements negotiated by Government with certain Sectors.
10. Terms implied by the Constitution – certain rights are implied to the Employment Contract under the Constitution such as the right to earn a living and the right to associate. The most important is the right to Natural Justice which has been taken to mean the right to fair procedure.
This means that all aspects of disciplinary proceedings, up to and including dismissal, must be very carefully handled to ensure there is no breach of the employee’s rights here. It is a powerful tool and one the Courts and Tribunals are very prepared to use.
It is clear that the Courts have not been slow to expand the range and detail of the rights that are seen to accrue to both sides in the employment relationship and to insert them into the Employment Contract, whether that is a written document or not.
For both Employers and Employees , it is vital to understand the issues and obligations in this area- early and expert legal advice is worth the investment.
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“By Neil Butler”