Business Law

Contract of Employment

Employees are legally entitled to a written statement of Particulars of Employment, and if you have dismissed an employee who makes a claim to the Employment Tribunal, the Tribunal can award 2 – 4 weeks’ pay (capped at £464 a week) for the failure to provide a written statement.  However, aside from that incentive to provide a written statement, it is also important that both you and your employee clearly understand the obligations placed on each of you.  This is always better done in written form rather than relying on verbal agreements.

Most terms in a contract are “express” terms, which means they are agreed between you and the employee, either verbally or in writing.  However, some terms are “implied” into the contract even if they have never been agreed between you and the employee.  Basic statutory rights such as 28 days’ paid holiday or the right to equal pay are implied into every contract of employment. 

Some terms are fundamental to the employer/employee relationship.  One of the most important is the implied term of mutual trust and confidence.  This is an obligation placed upon the employer to act reasonably and fairly towards the employees.  There is a wealth of case law about mutual trust and confidence, but examples of employers breaches include verbal abuse of an employee, undermining an employee in front of his subordinates, unreasonable accusations of theft and failing to support an employee.

Employees are also subject to certain implied terms.  An employee must carry out the work he is contracted to do, and cannot delegate that work to others.  They must take reasonable care when performing their duties and must carry out their employer’s reasonable lawful instructions. 

Even if you do not give your employees a written statement, if they work for you and you pay them, a contract will be inferred based on conduct e.g. how much you pay the employee, the hours the employee usually works etc.  If an employer does not comply with these contract terms as established by practice, an employee can still bring a claim for breach of contract in the County Court, High Court or in the Employment Tribunal. 

If you are considering issuing written contracts for the first time; taking on employees for the first time or thinking about updating your Employment Contracts, we would be happy to help you. 

For further information and for advice on employment law issues in London and Nationally, please contact:

Marina Vincent on 020 8422 5678