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lindagray

Contract of employment

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Once a person's work contract is categorised, the courts have specific rules to decide, beyond the statutory minimum charter of rights, what are its terms and conditions. Just like ordinary contract law there are rules on incorporation, implied terms and unjust factors. However, in Gisda Cyf v Barratt, Lord Kerr emphasised that if it affects statutory rights, the way courts construe a contract must be "intellectually segregated" from the general law of contract, because of the employee's relation of dependency. In this case, Ms Barratt was told her employment was terminated in a letter that she opened 3 days after its arrival. She claimed her dismissal was unfair within three months (the time limit to bring claims in Tribunals) after reading the letter, but the employer argued it was barred because in commercial contract cases, one is bound by a notice as soon as it arrives in business hours. The Supreme Court held that Ms Barratt could claim: she was only bound by the notice when she actually read it. The purpose of employment law to protect the employee, and so the rules must be construed to uphold employees' rights.

Everything an employee is promised or agrees to becomes a term of the contract, so long as this does not contradict statutory labour rights. In addition, terms can be incorporated by reasonable notice, for instance by referring to a staff handbook in a written employment agreement, or even in a document in a filing cabinet next to the staff handbook. While without express wording they are presumed not binding between the union and employer, a collective agreement may give rise to individual rights. The test applied by the courts is to ask loosely whether its terms are 'apt' for incorporation, and not statements of 'policy' or 'aspiration'. Where the collective agreement's words are clear, a "last in, first out" rule was held in one case to potentially qualify, but in another case a clause purporting to censure compulsory redundancies was held to be binding 'in honour' only.

As well as statutory rights, expressly agreed terms, and incorporated terms, the employment relation contains standardised implied terms, on top of the individualised implied terms that courts always construe to reflect the reasonable expectations of the parties. First, the courts have long held that employees are owed additional and beneficial obligations, such as a safe system of work, and payment of wages even when the employer has no work to offer. The House of Lords held employers have a duty to inform their employees of their workplace pension rights, although a lower court stopped short of requiring employers to give advice on qualifying for workplace disability benefits. The key implied term is the duty of good faith, or "mutual trust and confidence". This is applied in many circumstances. Examples include requiring that employers do not act in an authoritarian manner, do not call employees names behind their back, do not treat workers unequally when upgrading pay, do not run the company as a front for international crime, or do not exercise discretion to award a bonus capriciously. There has been disagreement among judges about the extent to which the core implied term of mutual trust and confidence can be 'contracted out of', with the House of Lords having held that the parties may when they are "free" to do so, while others approach the question as a matter of construction of the agreement which is within exclusive judicial competence to define.

The second, and older, hallmark of the employment contract is that employees are bound to follow their employers' instructions while at work, so long as that does not contravene statute or agreed terms. Employments relation give the employer discretion in limited fields. This used to be called the 'master–servant' relationship. The employer has some ability to vary the way work is done in accordance with business needs, so long as it does not contradict a contract's express terms, which always require an employee's consent, or a collective agreement. The status of 'flexibility clauses', purporting to allow employers the discretion to vary any contract term, has been contested, as it will often enable abuse of power that the common law controls. The limits of the courts' tolerance for such practices are evident if they touch procedures for accessing justice, or potentially if they would contravene the duty of mutual trust and confidence.

wikipedia.org

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