These types of implied terms can be automatically implied either by statute or by operation of common law and are discussed in more detail below. Implied by operation of law – where the parties did not necessarily intend for such a term to be included, or even knew about it, but it still arises as a legal incident from the nature of the employment relationship.This could include, for example, payment of an annual bonus upon hitting a certain sales target. Implied by custom or usage – where there is clear evidence that a set practice operates within a particular trade or industry, or even a particular firm, although this practice must be so well recognised and reasonable that the parties must be said to have had it in their minds when they entered into the employment contract.
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This could include, for example, the contractual requirement for an HGV driver to hold a valid licence. The test here is either whether the officious bystander would consider the term to be so obvious as to be assumed, or it is otherwise necessary to give business efficacy to the contract. Implied by fact – where the parties must have intended to include this term, even though it has not been expressly stated.
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In contrast, to express terms, implied terms are not necessarily agreed between the parties but, nonetheless, are still contractually binding on both parties, often to reflect the intention of the parties at the time the contract was made or because the contract does not make commercial sense without that term.Ī term will usually be implied into an employment contract in one of three ways: These are known as flexibility clauses and are often used by an employer to make changes to either the employee’s hours or place of work, the latter more commonly referred to as a mobility clause. The contract may also contain a clause specifically permitting an employer to make certain, albeit reasonable, contractual changes to the employee’s working conditions. A confidentiality clause, on the other hand, will prevent an employee from disclosing sensitive and confidential information to a third party. In particular, a restrictive covenant can be used to prevent an employee from working for a competitor, either during the currency of the employment contract or even post-termination, albeit only for a specified period of time. The employment contract will also often include express provision to protect an employer’s legitimate business interests by way of restrictive covenants and confidentiality clauses. In other words, in addition to those terms that have been expressly agreed between the parties, either verbally or in writing, other terms will arise by implication in the context of the employment relationship.Įxpress & implied terms in employment contractsĮxpress terms are those explicitly agreed between the parties, and typically relate to core contractual matters including salary, sickness, working hours, holiday entitlement and notice periods for terminating the contract. Moreover, contractual terms can be express or implied. The contract can be either written, verbal or even both. That said, although the contract of employment will usually be set out in writing, or at least in part documented by way of a written statement of employment particulars, to be legally binding the contractual terms do not need to be written down.
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In this way, the employment contract helps to clarify the nature and extent of the obligations on either party, providing clearly defined rights, with potential legal redress where those rights are breached.
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This makes it important for both the employer and employee parties to understand the nature of the employment contract and their respective obligations under it, not least their legal rights, remedies and claims in the context of different kinds of breach.Ī contract of employment is a legally binding agreement between the employer and employee, setting out the terms and conditions governing the working relationship between the parties, including their rights and responsibilities. Breach of an employment contract can include anything from relatively minor breaches, such as an employer’s failure to pay an employee’s expenses on the correct date, to fundamental breaches of contract arising from, for example, gross misconduct on the part of the employee.īreach of contract can give rise to remedies for the other party, such as suing for damages. If an employer or employee breaks or fails to meet terms under the employment contract, they may be in breach of the employment contract.