Contracts of Employment

What you should have

Every employee works under a contract of employment. Often the question arises "What exactly does the contract contain?" The answer is important because once the exact provision in the contract has been clarified, a legal right has been established. So employees must have contracts, and organisations, however small, must provide contracts to their employees.

Often there is misunderstanding because an employer has failed to provide a document setting out in writing the terms of the contract. A contract still exists: the problem is that there may be difficulty in establishing its terms because of the lack of documentary proof. Equally, there is something confusion because the written document does not describe the actual arrangements. Written contracts may have been overtaken by changes, for example a pay increase.

For these reasons, it is correct to describe most written "contracts" as written particulars of the contract of employment. Every organisation should have a standard document of written particulars, and there is a legal obligation to provide each employee working for eight hours or more each week, with such written particulars within two months of starting work.

Existing employees are entitled to such a written statement on request or if there are changes to the existing conditions.

New employees must be given the following information in writing in one document by the end of the second month of employment:

1) names of employer and employee;

2) date when employment began;

3) scale and rate of remuneration or method of calculation;

4) intervals at which remuneration is paid;

5) terms and conditions relating to hours of work (including normal working hours);

6) holiday entitlements including any entitlement to accrued holiday pay;

7) length of notice by employee and employer;

8) job title or brief job description;

9) where employment is not permanent, the period for which it is to continue;

10) place of work;

11) any collective agreements which directly affect terms and conditions.

The following information may be provided in instalments, again by the end of the second month:

* terms relating to sickness, injury and sick pay;

* pensions and pension schemes;

* period of notice each party must give to terminate the contract;

* where the employment is temporary how long it is likely to last or termination date;

* collective agreements which can be incorporated;

* details of any arrangements, pay, special benefits and terms of return for employees working abroad should be given before they leave;

* disciplinary and grievance procedures.

NB The written statement of terms of conditions is not in itself a contract, though it will be good evidence of a contractual arrangements in the event of a dispute.

Contracts may include terms that are expressed or implied.

An express term is one that is expressed in the contract either orally or in writing.

Examples of expressed terms could include:

* pay etc;

* holidays;

* benefits, eg, company car, loan;

* mobility;

* confidentiality;

* other work and business interests.

Implied terms are those which always exist even if they are never specifically referred to.

Employers have implied duties to:

* take reasonable care e,g, to safeguard an employee's health;

* pay wages;

* provide a safe system of work;

* inform employees of important entitlements;

* maintain a relationship of mutual trust.

Employees have an implied duty to:

* show fidelity and good faith;

* obey lawful orders and instructions;

* exercise reasonable care and skill;

* maintain a relationship of mutual trust and confidence.

A special form of implied term is a provision in a contract which arises because quite simply it has been accepted as "custom and practice". Custom and practice items are not implied in the sense of being in the nature of the employment relationship, but because they are part of a regular pattern in a given employment relationship. To count as being contractually binding through custom and practice, the arrangement has to be:

* reasonable;

* notorious - ie, well known;

* certain (well established).

Changing employment contracts

Contracts of employment can be changed or varied by any of the following means:

* the employer and employee individually agree to a variation;

* where Amicus is recognised for collective bargaining, agreement is reached and that agreement is automatically incorporated into the contracts of individual employees. (Written particulars should refer to recognition and collective bargaining arrangements to remove any doubt about incorporation of terms into individual contracts);

* over a period of time new arrangements evolve and then become established awithout explicit agreement but through "custom and practice";

* the law alters, changing statutory rights;

* the employer gives notice of a change, in keeping with the notice terms of the contract, and the employee acquiesces to the new arrangements either explicitly, or by working on beyond the date of change without clearly registering dissent;

* the employer imposes a change arbitrarily with less than the contractual notice period, but the employee acquiesces to the variation;

In circumstances where a change is being imposed without agreement, it is

important to obtain more detailed advice from Amicus. In some circumstances

legal action will be required to protect members from the imposition of

arbitrary changes.

Generally speaking however, such extreme steps are not needed, and it will be quite normal for alterations in employees contracts to be reached through the normal processes of collective bargaining. Where an individual employee is involved in proposed changes in job content, any agreement will almost certainly be at the level of the individual and the employer. Amicus may become involved at the wish of the member if the proposed variation appears unacceptable, in which case the various procedures for negotiation/avoidance of disputes may be used. The "status quo" should be observed while the procedures are being used. Normally a compromise solution can be found through these means, though this is by no means always the case. Failure to agree a change by recourse to these mechanisms of negotiation does not undermine the legal rights of either party.

If a change in job content is being proposed it is important for both parties to adopt a "reasonable" approach. If the employee unreasonably refuses a change in his/her job, and if the new job is "suitable" alternative employment, the employee could face dismissal or redundancy. This is the "worst case scenario".

On the other hand, if the employer is unreasonable, and there is no good reason for the intended change, or if the procedure adopted is flawed, or if the change would represent an unsuitable job or reduced conditions, the employee will have a claim against the employer.

These legal technicalities are usually unnecessary. Providing change is the subject of negotiation between all parties, and providing reasonableness prevails, the law is a peripheral consideration. Collective bargaining is generally about practical aspects of the day to day social economic relationships, and these trends tend to be the most important.

It is also worth remembering that a proposed alteration to an employment contract which could lead to the dismissal of an employee will count as "redundancy" for the purposes of the consultation obligations which the law places on the employer. If other words, the legal obligation to consult with Amicus if recognised and affected is a further reason why any employer should think very hard before attempting to improve changes in conditions without agreement.

Attempts to impose changes on employees often represent some of the more difficult situations likely to face Amicus members. In the event that they are encountered, however, further advice from Amicus should be obtained.

What to do if your employer tries to change your contract

If management try to bring in a practice that appears new you should

try to find out:

1) who has been informed of the new practice;

2) when they were informed;

3) what management said when imposing the new term;

4) what the written contracts/particulars of employment say. (Gather information on whether there has been a change because it may be important later on to establish that there has been no acceptance or 'acquiescence' to the change. See further on).

5) whether there is a collective agreement to protect you;

6) get in touch with you Amicus Regional Officer;

7) if there is a change every member must send a letter stating that they do not accept the change and will only continue working under protest.

Be wary

Management can try to bring in new practices by:

a) telling you it is not new and has been used previously;

b) telling you that they are legally entitled to;

c) introducing the change as quietly as possible. If employees work under the change for a few weeks without protest they will be deemed to have accepted the change in contracts. This is called "acquiescence". If there is evidence to show that employees have received new contracts of employment or new statements of terms and conditions and they have not objected to a change or the removal of an important term, this can scupper a contractual claim. Representatives should be particularly vigilant in checking all written communications from management to employees which refer to terms and conditions of employment.

What Amicus can do

If the evidence shows that there has been a variation and that members have not accepted the change members may:

2) receive compensation for their notice period; (or possibly longer)

3) make a claim under the Employment Rights Act 1996 which incorporates what was formerly the Wages Act.

4) make a claim for unfair dismissal.

References

An employer is under no legal obligation to give a reference unless he has agreed to do so in the contract of employment or as part of a termination agreement, or is required to do so by statute, such as under the rules of a regulatory body.

An employee has the right to see (and to be provided with a copy of) any reference received by their present employer from previous employers. But they do not have the right to see references provided by their own employer.

Inaccuracy

An employer who is obliged or chooses to give a reference must not give an inaccurate reference which can damage the person concerned's reputation and may constitute defamation. Malice But the employer is protected by qualified privilege unless the person concerned can prove the writer acted out of personal spite or malice or another improper motive. Malice is a technical legal concept which is notoriously difficult to establish. The only defence to a defamation action is justification.

Mis-statement

A former employee can claim the writer of the reference had made a negligent misstatement. But this does not mean an employer is under an absolute obligation to get the facts in the reference right. The obligation is to take reasonable care in writing a reference.

A former employee can also claim the employer made false statements to the new employer who was deceived into doing something which resulted in a loss to the employee. As with defamation the employee must show the referee acted maliciously. And must show the statement amounted to an attack on their reputation

Contract Terms Act 1977

It is not unusual for an employer to include in a letter of reference a disclaimer of liability. The legal status and enforceability of such a disclaimer is unclear. It may be caught under section two of the Unfair Contract Terms Act 1977.

Rehabilitation of Offenders Act 1984

Generally, an employer can make any true statement subject to the law regarding spent convictions. This is set out in the Rehabilitation of Offenders Act 1984. It excludes from legal liability anyone who fails to acknowledge or disclose a spent conviction. If the employer does refer to a spent conviction, the former employee may claim defamation. For the qualified privilege defence to apply, both the writer and employer receiving the reference must have an interest in making or receiving the statement.

In these circumstances the defence cannot be applied because a spent conviction is not a proper ground on which a prospective employer can refuse to employ someone.

Confidentiality

If an employer discloses information given to him in confidence, without the employee's consent and this results in loss to the employee, there is a potential claim for breach of confidence.

Data Protection Act 1998

An employee who is given an inaccurate reference may be entitled to bring an action under the Data Protection Act 1984. This would be for compensation for any loss suffered as a result. It should also be possible to have the data corrected or if necessary erased.

Defamation Act 1952

Provides that material published which is libellous, defamatory and causes damage can be brought before the County or High Courts. The defamation of character must

Servants Character Act 1792

Finally, the Servants Character Act 1792 remains in force. Under the Act it is a criminal offence for an employer to provide a false reference.

UPDATE: Employment Act 2002 - the new disciplinary and grievance procedures

The Employment Act has now received Royal Assent, but its provisions are not yet in force, as further regulations have to be passed (probably mid-2003). The Act contains a variety of new rights, including measures on dispute resolution, equal pay questionnaires, maternity/paternity and adoption leave, fixed-term working and Union Learning Representatives. See here for more information.