The complexity of the employment contract

Although the employment relationship is essentially an informal and constant process that happens whenever an employer has dealings with an employee and vice versa, initially this relationship is founded on a legal contract.

The complexity of the employment relationship is reflected in the complexity of what forms the employment contract – it is important to be aware that not everything is written down and even the elements that are might not always be in the same place.

Express terms

In any contract there will be terms that are in writing or are clearly agreed between the two parties to the contract – in this case the employer and the employee. The Employment Rights Act 1996 imposes a statutory duty on an employer to provide a written statement of particulars (see article 49) or a written contract containing the required information. The express terms might not all be in one document and policies or staff handbooks may contain elements of the terms of the contract. It is also possible for employment contracts to contain various restrictions to protect the employer; examples include: intellectual property rights, working for another employer or confidentiality.

Implied terms

There are often unwritten provisions that can be implied as being part of the contract of employment. These may arise:

• through the employee’s and/or the employer’s conduct

• through custom and practice

• when a particular employer normally has a particular provision in place

• through common law duties – e.g. to comply with equal pay legislation

• if they are necessary to make the contract workable – e.g. a driver will be required to hold a driving licence.

The result is that it is not always easy to be clear what the terms of the ! contract of employment are – certainly the written terms are just part of the overall contract. The employer can decide to vary the terms of contract either through consultation and agreement, or by giving notice if there is clear wording somewhere in the contract allowing such changes.

It is also possible for an employer to change the terms of contract without consultation or notice – a unilateral variation of contract – but if this is done, employees have four rights:

• to accept the change, or

• to resign and claim constructive dismissal, or

• to refuse to work under the new terms and force the employer to take what steps it thinks are appropriate, or

• to work under protest and seek damages (also called ‘stand and sue’).

What the employee cannot do is combine any of these rights – they have to make a choice.