Contract

Job offer and acceptance

    Withdrawing a job offer

Children and young persons

    Children and working hours

    Children and working time

    Young persons and health and safety

Workers who must receive a written agreement

    Traditional apprenticeship

    Modern apprenticeship

    Other workers

Terms and conditions of employment

    Contractual rights

    Duty to pay wages

    Duty to exercise reasonable care

    Duty to provide a grievance procedure

    Duty of mutual trust and confidence

    Your implied duties

    Duty of obedience

    Duty to adapt

    Duty to exercise care

    Duty of fidelity or good faith

    Duty to co-operate

    Work rules

Collective bargaining

Illegality and the contract

Statutory rights

    Written statement of employment particulars

    Statement of changes

 

Job offer and acceptance

Generally a job is offered verbally, or in writing. If you accept the offer, you enter into a legally binding agreement with your employer. This is the essence of a contract, even if there is nothing in writing.

The offer and your acceptance are the main ways to establish if an agreement was reached. The essential elements of this agreement are:

Offer

  • The terms are established when the offer is made. 

  • The person who makes the offer must have the authority to do so. 

  • The offer must be unambiguous with the key terms clearly identifiable.

  • The offer can be made conditionally.

  • If the offer is conditional, the condition should be met. 

  • There must be a time limit to accept the offer.

Acceptance

  • A positive act is required.

  • Your acceptance must be within a reasonable time. 

  • Your acceptance must be unconditional.

Consideration

  • Both you and your employer must get something from the agreement. 

  • You promise to carry out the work, and your employer promises to pay you.

  • Any promises made before you start work are legally binding.

Intention

  • You and your employer must intend to create legal relations.

  • You will not be able to enforce the contract unless there are legal relations.

There is no legal requirement for you to accept the offer formally, but you must receive a written statement of employment particulars within two months of starting work. The statement itself is not a contract, it is the 'particulars' of your employment, for example, your place of work, hours of work etc.

Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256 CA - There must be an offer, consideration, acceptance and an intention to create legal relations.

O'Laoire v Jackel International Ltd (No 2) [1991] IRLR 170 CA and Puntis v Governing Body of Isambard Brunel Junior School EAT/1001/95 - An assurance that a job will be offered is too vague to form a contract and is not a job offer.  

R v Lord Chancellor's Department ex p Nangle [1992] 1 All ER 897 HC - There must be an intention to create legal relations.

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Withdrawing a job offer

An unconditional offer may be binding, even if you have not started work. If an offer is withdrawn, this may be a breach that could allow a claim for damages which could be for any losses incurred and notice pay.

If a conditional offer is withdrawn before you start work because one or more of those conditions were not met, it is unlikely that you will be able to claim any damages. However, you may be able to claim damages if the offer is withdrawn after you have started work.

If the contract was for a certain period of time this is likely to be viewed as a "collateral" contract. In this case you may be able to claim damages on the basis of the collateral contract for wages that would have been earned during the period.

Gill & Others v Cape Contracts [1985] IRLR 499 HC - Damages can be claimed if a collateral contract is withdrawn. 

Wishart v National Association of Citizens Advice Bureaux [1990] IRLR 393 CA - An offer of employment can be conditional and subject to receiving a satisfactory reference.

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Children and young persons

A child is someone under school leaving age, and a young person or worker, or a minor is someone between 16 to 17 years old.

The following legislation deals with the employment of children and young persons:

Children and Young Persons Act 1993 Sec 18  
Children and Young Persons Act 1933 (as amended)  
Children and Young Persons (Scotland) Act 1937
Children (Protection at Work) Regulations 1998
Note: This is not the only legislation.

The hours and types of work that a child can carry out are restricted. An employer must have a permit from the local Education Authority to employ a child. An Education Authority can impose regulations and bye-laws. The Education Authority can also ask for information regarding the child's employment, it can impose restrictions and even prohibit employment. With one exception, a child under 14 cannot be employed. In particular, a child of any age cannot work in an industrial undertaking. A child's work should not involve carrying, lifting, or moving anything that is heavy and will harm or injure the child.

The exception is when a child is 13 years old, and occasionally carries out light agricultural or horticultural work, provided the child is employed by a parent or guardian. This work must not be detrimental to the child's health and safety or development and it must not affect the child's attendance at school, or participation in any approved work experience.

Approved work experience is authorised by the Education Authority. A child can take part in work experience as part of the child's education in the last year of compulsory schooling.

A child may take part in a public performance if the employer has a license from the Education Authority. A license is also required from the Education Authority before a child can take part in any sport or work as a model.  

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Children and working hours

The hours that a child can work are restricted as follows:

  • During school hours on any day when the child should be at school.

  • Any day before 7.00 am and after 7.00 pm.

  • No more than two hours on any school day, or more than one hour before school. 

  • No more than two hours on any Sunday.

  • On non-school days, except on a Sunday, a child from 13 to 14 years old may work for up to five hours. The total hours worked cannot exceed 25 hours in any week. 

  • On non-school days, except on a Sunday, a child from 15 to 16 years old who is under school leaving age, may work for up to eight hours. The total hours worked cannot exceed 35 hours in any week.

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Children and working time

A child is not classed as a worker under the Working Time Regulations 1998. Therefore there is no entitlement to annual leave under those Regulations. However, a child must have at least two consecutive weeks without employment during school holidays under the Children and Young Persons Act 1933 (as amended).

A young person cannot work more than eight hours per day, and no more than 40 hours per week. This applies, even if the young person is employed by more than one employer. Unlike adult workers, there are no provisions for averaging working hours over several weeks. A young person cannot opt out of these provisions in the same way that an adult can.

There are limited exceptions in special circumstances, for example; where work needs to be done to maintain continuity of production or service, or to respond to an upsurge in demand. However, those exceptions will only apply when there is not an adult worker who could carry out the work and the young person's education and training is not adversely affected.

A young person cannot work at night between 10.00 pm and 6.00 am, or if specified in the young person's contract, between 11.00 pm and 7.00 am.

Some employers are exempt from night working restrictions, for example; in agriculture, catering, bakeries, fisheries, hospitals, hotels, newspapers, postal services and retail trading. In these cases, a young person cannot work between midnight and 4.00 am. If a young person is asked to work at night, the young person must be supervised by an adult worker if this is necessary for the young person's protection.

A young person is also entitled to:

  • Two rest days per week.

  • A daily rest break of 12 consecutive hours, for example; the hours between finishing work one day and starting work the next day.

  • A rest break of at least 30 minutes if the working day lasts longer than four and a half hours.

  • A free health assessment before any night work is carried out, and free health checks at regular intervals thereafter.

Ashby v Addison & Another (T/a Brayton News) [2003] All ER [D] 98 [Jan] EAT - A minor is not a "worker" under the provisions of the Working Time Regulations 1998. 

Chaplin v Leslie Frewin [Publishers] Ltd [1966] 2 WLR 40 CA and Clements v London & North Western Railway Co [1894] 2 QB 482 HL  - A minor will be bound to a contract for education, employment or training if the contract is substantially for the minor's benefit.  

De Francesco v Barnum [1890] 45 Ch D 430 CA - A minor will not be bound by a contract that is not in the minor's best interests. 

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Young persons and health and safety

An employer must carry out risk assessments for young persons. There are restrictions on the employment of young persons in certain types of work, and for exposure to hazardous situations at work.

The Health and Safety Executive have published guidance for the employment of young persons, click here for a copy of the guidance.

With some exceptions, young persons have the same employment rights as adult workers. The exceptions include minimum rates of pay under the National Minimum Wage Act 1998. However, discrimination legislation applies equally to young workers, and the right to make a discrimination claim is available without any age restrictions.

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Workers who must receive a written agreement

Traditional apprenticeship

A traditional or common law apprentice is entitled to receive a written agreement or deed. In practice, you agree to learn a trade, and your employer agrees to train you for the duration of your apprenticeship. When you have been trained, the agreement ends. You are not redundant because the agreement has ended, and your employer is free to discharge you or to keep you on.

If you are a minor, the agreement can be signed by a parent or guardian. However, on becoming an adult you can reject or terminate the agreement.

The agreement can be with your employer, or an individual within your employer's organisation. If this individual leaves the organisation, this will be a breach. In practice, you will normally be placed with another individual. If the business transfers to another employer and your training ends, this will be a breach.

The essential elements of the agreement are the payment of wages for the duration of the apprenticeship, the training and trade skills that you learn, and your status when the training is completed which provides you with a good start in the job market. If there is a breach, it is likely that you will be entitled to wages and any other benefits up to the date when the agreement would have ended. It is also likely that damages will extend beyond this period for a failure to train and loss of future work prospects.

It is very difficult to dismiss an apprentice in the same way that an ordinary employee may be dismissed, for example: insubordination or poor conduct. This is because of the agreement to train. This does not mean that you cannot be dismissed. This could happen if there are grounds for grave misconduct or negligence, or a refusal or failure to train or learn the trade.

In addition, you cannot normally be made redundant, this could also be a breach under the agreement. Although you could be made redundant if the business ceases trading or closes, or if there is a significant change in the nature of the business.

Dunk v George Waller & Son [1970] All ER 630 CA - If an apprenticeship is terminated early there will be grounds for damages for loss of future work prospects and loss of earnings for the remaining period of the apprenticeship.

Wallace v C A Roofing Services Ltd [1996] IRLR 435 HC - It might be possible for an apprentice to be made redundant, provided there is a closure, or a fundamental change in the character of an organisation.

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Modern apprenticeship

A modern apprenticeship is a tripartite agreement between you, your employer, and a training provider. Training is normally based on government sponsorship. Your employer undertakes to train you for the duration of the apprenticeship, and you should benefit from work experience and off-site training which is usually provided by various Skills Councils.

This type of agreement is a contract of apprenticeship because the essential elements of a traditional apprenticeship are present. This means that you will have the same rights as a traditional apprentice.

Flett v Matheson [2006] IRLR 277 CA - The essential elements of an apprenticeship need to be identified before a contract of apprenticeship is established as in Dunk v George Waller & Son above. 

Whiteley v Marton Electrical Ltd [2003] IRLR 197 EAT - Damages for "traditional" and "modern" apprenticeships are similar. 

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Other workers

There are other types of workers who must legally receive a written agreement. These are merchant shipping workers and some fixed-term workers who are covered under the following legislation:

Merchant Shipping Act 1995 Sec 25

Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 Reg 9
In addition, an employer can write to an employee on maternity leave and ask for her written agreement to state whether or not she intends to return work after her maternity leave.

Maternity and Parental Leave etc. Regulations 1999 Reg 12

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Terms and conditions of employment

There are two primary sources which make up your terms and conditions of employment. These are:

  • Contractual: Terms and conditions which are agreed between you and your employer, or your trade union or employee representatives.

  • Statutory: Legal rights enacted by parliament which are implied into your contract.

Contractual terms and conditions cannot normally be changed without your consent. If your terms and conditions are changed or varied without your consent, this is likely to be a breach. You may have grounds for a breach of contract claim or constructive dismissal if the breach is fundamental. If you are considering a constructive dismissal claim you should bear in mind that you will not only need to prove that you were constructively dismissed, you will also need to prove that the dismissal was unfair.

Startutory conditions that have been implied into your contract, for example national minimium wage or working time are mimimum rights. You may agree to vary those rights, but only if this variation results in improved rights and does not reduce or restrict those rights.

Gibbons v Associated British Ports [1985] IRLR 376 HC - An employer cannot unilaterally vary a contract.

Hooper v British Railways Board [1988] IRLR 517 CA - A breach of contract does not necessarily mean a dismissal is unfair. 

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Contractual rights

A contract can based on:

  • Verbal agreement: This is anything which has been verbally agreed and can cover your duties and responsibilities, holiday entitlement, hours, overtime, pay etc. 

  • Implied terms: Generally, this is anything that is needed to make the contract workable, such as implied duties to ensure your health and safety, maintaining trust and confidence etc.

  • You also have implied duties to your employer such as the duty to co-operate. 

  • Conduct: This covers anything that you are normally expected to do as part of your job which is implied into your contract as common practice. 

  • Written terms: This is anything that has been written down. For example; an advert if the job was advertised in a newspaper or at the Job Centre, a job offer letter, a written contract, or a collective agreement which was negotiated by a trade union or employee representatives. It can also include an employee handbook or any other documents which you may be referred to and which are easily accessible. 

  • Statutory provisions, rights and protection: Terms can be implied into your contract by law or statute. This could be anti-discrimination laws, the right to receive a redundancy payment, national minimum wage, working time etc.

Contractual terms and conditions are usually better than statutory rights. Statutory rights are minimal rights, for example; your terms and conditions may allow you to be paid more than the national minimum wage, or you may be entitled to company sick pay rather than statutory sick pay.

Therefore, your contract may consist of a number of terms which are included through verbal agreement, or implied by statute, or conduct through common practice, as well as express or written terms.

The Unfair Contract Terms Act 1977 can apply to contracts of employment.

Johnstone v Bloomsbury Health Authority [1992] QB 333 - Almost any term can become express if it is agreed by the parties.

Sagar v H Ridehalgh & son Ltd [1931] 1 Ch 310 - For a term to be incorporated by custom and practice, it must be "notorious, certain and reasonable".

Tayside Regional Council v McIntosh [1982] IRLR 272 EAT - A job advert can be used to interpret express terms.  

You are entitled to benefit from an implied term even although the term is not in writing. Your employer cannot withdraw the benefit, or argue that you are not entitled to benefit from the term because there is nothing in writing.

Scally v Southern Board [1991] ICR 77 - The House of Lords ruled that employees are entitled to derive a benefit even when they are only informed of the benefit.
The following are implied terms or duties which are due to you from your employer:

  • Duty to pay wages.

  • Duty to exercise reasonable care. 

  • Duty to provide a grievance procedure.

  • Duty of mutual trust and confidence.

  • Duty to pay wages

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Duty to pay wages

With limited exceptions, there is no obligation on your employer to provide you with work as long as your wages are paid. The exceptions are when your are paid commission or piecework, and you need to work to maintain your level of income, or if you are a skilled worker, and you need to continue working to maintain or develop your skills; entertainers and performers can also expect reasonable public exposure to ensure the continuity of their employment.

Unless you have expressly agreed in writing, your wages cannot be paid in kind, you must receive money. Although your wages can be paid in cash, there is no implied right for you to be paid cash. Your wages can also be paid by cheque, by credit transfer to your bank account etc.

You are protected from any unauthorised deductions from your wages. However, your employer can make deductions if:

  • There is a statutory authority to do so, for example, tax, national insurance contributions, or when the deduction is ordered by a Court.

  • There is a provision in your contract to make the deduction, for example; pension contributions, savings, trade union dues etc.

  • You have expressly agreed in writing for the deduction to be made. 

  • The deduction has been made due to an overpayment of wages.

  • There are special rules that apply to retail workers for cash shortages or stock deficiencies (see below).

If you have expressly agreed to a deduction, the agreement must be in writing and you must have signed and dated it before the need for a deduction arises. This means that your employer cannot ask you to sign an agreement after the need for a deduction has arisen, for example; staff breakages, damage to property etc. Neither can you be placed under pressure to sign such an agreement after the need has arisen.

Employment Rights Act 1996 Sec 13

Any overpayment of wages can only be deducted if there was an error or mistake in the calculation of your wages. The error has to be a mistake of fact, rather than a mistake of law. Even if the mistake was an error, your employer may not be permitted to make the deduction if you were led to believe that you were entitled to the overpayment and you acted on that believe (for example. you have spent the money).

A deduction may be made from your wages if you have taken part in industrial action or a strike. You must be willing and able to carry out your work. If you are not, then your employer may deduct wages for hours that you have not worked.

Special rules apply that allow your employer to make deductions for cash shortages or stock deficiencies if you are a retail worker. However, certain conditions have to be met before the deductions can be made:

  • There must be a contractual agreement in place before the cash shortage or stock deficiency occurred. This is because you are protected from being placed under pressure to agree to deductions after the cash shortage or stock deficiency occurred.

  • The deductions, or the demand cannot be more than 10% of your gross weekly or monthly wages. If the amount demanded is greater than 10% of your gross wages, then deductions, which cannot be more than 10%, may be made until the overall amount has been paid.

  • If your employment comes to an end, the full amount may be deducted. 

  • Generally, the deductions or the demand cannot be made if the cash shortage or stock deficiency occurred more than 12 months previously, and any deductions from your wages cannot continue for any more than 12 months after the cash shortage or stock deficiency occurred.

  • If your employer could reasonably have discovered the shortage or stock deficiency earlier, the 12 month period will run from when this should have been discovered.

Avon County Council v Howlett [1983] IRLR 171 CA  - An overpayment of wages cannot be reclaimed if the employee has been led to believe that the wages were his, and the employee acts on that belief and spends the wages.

Collier v Sunday Referee Publishing Co Ltd [1940] 2 KB 728 - As long as wages are paid, generally an employer does not need to provide work. The exceptions can be:

Breach v Epsylon Industries Ltd [1976] ICR 316 - When the employee needs to work to maintain or develop a level of skill; or

Devonald v Rosser & sons Ltd [1906] 2 KB 728 - If pay is based on commission or piecework; or

Turner v Sawdon & Co [1901] 2 KB 653 - If exposure of publicity is taken to be a consideration for the employee. 

Delaney v Staples (T/a De Montfort Recruitment) [1992] 1 AC 687 HL - A failure to pay wages is a deduction for the purposes of the Employment Rights Act 1996. 

Discount Tobacco & Confectionery v Williamson [1993] IRLR 327 EAT - An employer cannot make a deduction from wages unless the employee has expressly agreed to this before the need for the deduction arises. 

EMI Group Electronics Ltd v Coldicott [1999] IRLR 630 HC - Non-payment of pay in lieu of notice is damages for wrongful dismissal and not a deduction of wages. 

Mears v Safecar Security Ltd [1960] QB 54 - If there is no express term on the issue of sick pay there is no presumption of a right to sick pay.

Miles v Wakefield Metropolitan District Council [1987] IRLR 193 HL and Wiluszynski v Tower Hamlets London Borough Council [1989] ICR 493 CA - A deduction can be made on account of taking part in industrial action.

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Duty to exercise reasonable care

Your employer is under a duty to take reasonable care of your health and safety, and should provide safe plant and premises, a safe system of work and reasonably competent fellow employees. The standard of care is "the care which an ordinary prudent employer would take in all the circumstances". The duty is owed to all employees as individuals, which means that a higher standard of care may be due to some employees more than others.

James v Hepworth & Grandage Ltd [1968] 1 QB 94 - A higher duty of care may be due to some employees more than others.

Paris v Stepney Borough Council [1951] 1 All ER 42 - The standard of care is "the care which an ordinary prudent employer would take".

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Duty to provide a grievance procedure

Your employer is obliged to provide, and effectively operate a grievance procedure. The ACAS Code of Practice on Disciplinary and Grievance Procedures has guidance on how grievances should be handled, click here to see the Code of Practice. Your written statement of employment particulars should include a note to specify whom, and in what manner you can raise a grievance. A failure to provide and effectively operate a grievance procedure can amount to a breach of an implied term of the contract of employment, which if sufficiently serious, can justify a claim for constructive dismissal.

Bracebridge Engineering Ltd v Darby [1990] IRLR 3 EAT and W A Goold (Pearmak) Ltd v McConnell [1995] IRLR 516 EAT - There is a duty to provide and effectively operate a grievance procedure. 

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Duty of mutual trust and confidence

Your employer is under an obligation not to undermine your trust and confidence. In effect you employer should not without reasonable cause, act in a manner that is calculated or likely to destroy, or to seriously damage, the relationship of trust and confidence. However, the breach has to be fundamental. Your employer's conduct must clearly show that there is no longer any intention to be bound by one or more of the essential terms in your contract.

Although a breach has to be significant, a series of minor breaches, when taken together may amount a "last straw" situation and enable a constructive dismissal claim. Similarly, there may be a constructive dismissal if a term has been invoked in an unreasonable manner, particularly if this means that you are unable to comply with the term.

It should be noted that conduct which may be acceptable in one particular type of situation, may not be acceptable in another. For example; language used on a building site may not be appropriate in an office environment.

Post Office v Roberts [1980] IRLR 347 EAT and Woods v W M Car Services (Peterborough) Ltd [1982] ICR 69 EAT - An employer should not destroy or seriously undermine the implied term of trust and confidence. 

Hamill v Strong & Co Ltd EAT/1179/99 - A series of one-off incidents can give rise to a constructive dismissal.

Malik v BCCI [1997] IRLR 462 - Dishonest conduct by an employer may be a breach.

Rigby v Ferodo [1988] ICR 29 CA - Continuing to work is not necessarily an affirmation of a breach. 

Western Excavating (ECC) Ltd v Sharp [1978] QB 761 CA - The test for constructive dismissal is not a test of "reasonableness". In order to claim constructive dismissal, an employee will have to show that there was a breach, that this breach was fundamental and went to the root of the contract, and that the employee resigned because of the breach. 

White v Reflecting Road Studs [1991] IRLR 331 EAT - It unlikely to amount to a breach of contract if an employer is not reasonable when enforcing a term in the contract.   

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Your implied duties

Your implied duties are:

Duty of obedience.

  • Duty to adapt.

  • Duty to exercise care.

  • Duty of fidelity or good faith.

  • Duty to co-operate.

  • Duty of obedience

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Duty of obedience

You have a duty to obey all reasonable and lawful instructions. However, your employer cannot instruct you to carry out an illegal act, or to do anything which may place you or anyone else in danger.

Morrish v Henlys (Folkestone) Ltd [1973] ICR 482 - An employer cannot order an employee to carry out an illegal act.

Ottoman Bank v Chakarian [1930] AC 277 PC - An employee is under a duty to obey reasonable and lawful instructions.

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Duty to adapt

You have a duty to adapt to new methods and techniques. In these cases, appropriate training or retraining should be provided. In addition, consideration should be given to possible redundancy if the new methods or techniques are more than a change to the way the job is done.

Cresswell v Board of Inland Revenue [1984] IRLR 190 HC and North Riding Garages Ltd v Butterwick [1967] 2 QB 56 - An employee is under a duty to adapt to new methods of work.

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Duty to exercise care

You have a general duty to exercise reasonable care whilst working. The importance of failing to exercise reasonable care can arise in legal claims where an employee has acted negligently and caused damage or injury to a third party. In these cases, the employer is usually held vicariously liable for the injury. However, the employee may also be held liable, either by the employer, or in some cases, the employee may be named as co-respondent, particularly in a discrimination claim.

Lister v Romford Ice & Cold Storage Ltd [1957] AC 555 - An employer is vicariously liable for an employees actions. However, an employer may be able to sue an employee for indemnity.  

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Duty of fidelity or good faith

Any act that is inconsistent with the contract that could, or may be detrimental to an employer's business is likely to amount to a breach of the duty of fidelity or good faith.

The duty can be as follows::

  • You should not secretly profit in from your employment.

  • You should not compete with your employer or divulge trade secrets.

  • Ex-employees may be restricted from competing or divulging secrets.

Boston Deep Sea Fishing & Ice Co v Ansell [1888] 39 Ch D 339 - There is a duty to account for secret profits.

Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169 - There is a duty not to go into competition against an employer.

Secretary of State for Employment v ASLEF (No 2) [1972] 2 QB 455 CA and Ticehurst & Thompson v British Telecommunications [1992] IRLR 219 CA - The contract can include the implied term of fidelity and good faith, consequently an employee cannot disrupt an employer's business, even if this is by taking industrial action.

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Duty to co-operate

An employee cannot disrupt the employer's business. This may amount to a breach of contract, even if this is no more than a work to rule.

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Work rules

You may also be bound by work rules. These may be in an employee handbook or other documentation. These rules must be specifically referred to in the written statement of employment particulars for you to be bound by them. Unless the rules are individually specified in the written statement of employment particulars, it is unlikely that they can be imposed on you.

However, if there is a legitimate purpose, your employer may be able to impose new rules. There will usually be a term or condition that you will be expected to obey "rules" in the disciplinary procedure (usually under the gross misconduct headings). As you have an implied duty of obedience, this may mean that your employer can "instruct" you to obey certain rules.

If a particular rule cannot be imposed on you because it does not have contractual force, any breach of this rule is unlikely to amount to a breach of contract on your part. However, there still remains your duty to obey lawful instructions or orders. This could be a potentially fair reason to take disciplinary action against you or to dismissal.

Dryden v Greater Glasgow Health Board [1992] IRLR 469 EAT - An employer is entitled to introduce rules for the conduct of employees.

Secretary of State for Employment v ASLEF (No 2) [1972] 2 QB 455 CA - Unless individually stated in the contract, not every rule will have contractual force. 

Prestwick Circuits v McAndrew [1990] IRLR 191 CS and United Bank v Akhtar [1989] IRLR 507 EAT - An employee must be able to comply with the rules.

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Collective bargaining

Generally, there three ways in which collective bargaining may affect your contract:

  • Express incorporation: Any terms which are agreed by the parties to a collective agreement are expressly incorporated into your contract.

  • Conduct: In effect this is what has been agreed to through common practice. 

  • Agency: Your contract may also be affected by way of agency. In effect, your trade union could be looked on as an agent acting on your behalf. There may be scope for this legally, but it is unlikely that a trade union, or indeed any of its members would agree to be tied to agency law in this way.

Burton Group v Smith [1977] IRLR 351 EAT - A trade union does not necessarily act as an "agent" for its members.

Gibbons v Associated British Ports [1985] IRLR 376 HC - Collective agreements are not always suitable for express incorporation into a contract.

Lee v GEC Plessey [1993] IRLR - An employer cannot withdraw a term. In this case an enhanced redundancy pay scheme, the High Court held that the contracts included the benefits of the enhanced the redundancy pay.

Marley v Forward Trust [1986] IRLR 369 CA - Terms that are expressly incorporated into a contract are enforceable.

Miller v Hamworthy Engineering [1986] IRLR 461 CA - A non-trade union member, or a member of a different trade union can be bound by the express incorporation of a collective agreement. 

Robertson v British Gas Corporation [1983] IRLR 302 CA - An agreement that has been expressly incorporated cannot be varied unilaterally, but after the agreement has been incorporated there is no need for further agreement. 

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Illegality and the contract

Any act which is contrary to public policy or statue is very likely to make your contract illegal. This is very likely to affect your ability to make any claim that is related to your contract, for example; your rights to claim unfair dismissal or a redundancy payment. An example of this could be agreeing that you employer will not deduct tax and national insurance contributions from your wages.

You may be able to enforce a claim under your contract if you were not aware that your employer was committing an illegal act, or if you did not make any gain from the act. It is your knowledge of the illegality and any benefit that you personally gain from it that can determine whether or not you can enforce the contract. In very limited circumstances an illegal contract may become legal.

If your claim does not depend on the contract, for example a discrimination claim, you should be able to make a discrimination claim. Discrimination legislation protects employees from discrimination. Employment is defined as employment under a contract of service, or a contract to personally or execute work or labour. An employee should not be barred from bringing a discrimination claim through any illegality in the contract. Consideration has to be given to whether the individual was "employed" in determining whether an employee is entitled to protection against discrimination.

Annandale Engineering v Samson [1994] IRLR 59 EAT - Occasional cash payments which are not taxed will not necessarily make the contract illegal. But see Cole v Fred Stacey below.

Cole v Fred Stacey [1974] IRLR 73 - Accepting payments that are not taxed can make the contract illegal.

Corby v Morrison [1980] IRLR 218 EAT - Even when there is no intention to defraud, the contract can be illegal. 

Hewcastle Catering v Ahmed [1992] ICR 626 CA - If an employee does not gain from the illegality, the contract may be enforceable. 

Hyland v J H Barker [1985] IRLR 403 EAT - Agreeing to any illegality, even for a short time could make the contract illegal. 

Leighton v Michael [1996] IRLR 67 EAT - An illegal contract will not bar a discrimination claim. 

Rastegarnia v Richmond Design COIT 764/38 - A worker must be entitled to work in the UK. 

Salvesen v Simons [1994] IRLR 52 EAT - The contract will be unenforceable, even when the parties genuinely do not believe that they are involved in an illegal act.

Tomlinson v Dick Evans "U" Drive Ltd [1978] IRLR 77 EAT - A knowledge of illegality can determine if rights are unenforceable.

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Statutory rights

Some statutory rights come into force immediately when you start your job. Other statutory rights depend on various factors such as your age, employment status, industry sector, length of service and how much you are paid. If your employer has been taken over by another employer, your continuity of employment will be maintained under the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 2006.

Transfer of Undertakings (Protection of Employment) Regulations 2006 Reg 4

There are perhaps three ways in which statute could impact on your contractual terms:

  • Direct imposition: Statute can directly impose a term into your contract. For example; an equality clause to ensure equal pay.

  • Restriction: Statute can restrict a negative a term. For example; the Sex Discrimination Act 1975 will null and void any term which restricts equal opportunities. 

  • Implied: A breach by your employer of a statutory right may allow you to make a claim if it amounts to a breach of the duty of mutual trust and confidence.

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Written statement of employment particulars

After you have started work you are entitled to receive a written statement of employment particulars. Your employer may give you the statement in instalments, but you should receive all the particulars in the statement no later than two months after starting work.

Employment Rights Act 1992 Sec 1

If you have not received a written statement, you can request one. If your employer still refuses or fails to give you a statement or, alternatively if you have received a statement and it does not comply with the provisions of the Employment Rights Act 1996, or you do not agree with it, you can make a claim to an Employment Tribunal. The Employment Tribunal has the authority to decide what should be contained in the statement. 

Employment Rights Act 1996 Sec 11

If you have made a separate claim to an Employment Tribunal, for example constructive dismissal, unfair dismissal etc., and you include a claim in respect of a failure to provide a written statement, you can be awarded a statutory maximum of two weeks pay or a maximum of four weeks pay.

Employment Act 2002 Sec 38

If you are dismissed for requesting a statement, you can make a claim for unfair dismissal to an Employment Tribunal for "asserting a statutory right" even if you have less than one year's service.

Employment Rights Act 1996 Sec 104

The statement by itself is not a contract, it contains the main particulars (not the terms) of your employment. The statement can refer you to other documents, for example; disciplinary and grievance procedures, employee handbook, pension scheme etc. Any terms included in this documentation are included in your contract.

The main particulars required by the Act are:

Basic information

  • Names of both the employer and employee.

  • Date of commencement of employment.

  • Date of commencement of continuous employment.

Information to be given at a specified date no more than seven days before the statement is given.

  • The scale of remuneration and method of calculating pay and pay period.

  • Terms concerning hours of work.

  • Holiday entitlement, including public holidays and holiday pay.

  • Provisions for sickness and sick pay.

  • Pension rights and pension schemes.

  • Period of notice on both sides.

  • Job title.

  • Period of employment if it is not permanent.

  • Place or places of work.

  • Details of collective agreements which affect terms.

  • Specific details for working outside of the United Kingdom.

Other factors

  • If no particulars are entered under these headings, then this fact should be stated.

  • The statement may refer the employee to other documents which provide more detailed information, but only if the employee has adequate access to those documents.

  • The statement must be given even if the employment is terminated within two months.

Additional information

  • Details of disciplinary rules.

  • Details of grievance rules.

Gascol Conversions Ltd v Mercer [1974] ICR 420 CA - The written statement of employment particulars can be strong evidence of what is contained in the contract, but

Robertson v British Gas Corporation [1983] IRLR 302 CA - The written statement of employment particulars is not the contract.

System Floors (UK) Ltd v Daniel [1982] ICR 54  - An Employment Tribunal can draw prima facie evidence on the contents of the contract.

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Statement of changes

Your employer can only change your contract with your agreement. If you agree to the change, your employer must give you a written statement of this no later than one month after the change took place.

Employment Rights Act 1996 Sec 4

Alternatively, your contract can be changed with the agreement of your trade union or employee representatives. In such cases it is unlikely that your consent will be required.

If your contract is changed by your employer and you do not agree to this, then the this could be a breach of contract. If the breach is fundamental, (for example; a cut in pay, hours, holiday entitlement, or a change to your job etc) you may have grounds for a constructive dismissal claim. However, it is unlikely that you will be able to do very much about any change if this was agreed by your trade union or employee representatives.

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