The Contract of Employment (L4)

Question 1

What does it mean to say that the contract of employment is a voluntary, consensual relationship?

Answer 1

Freedom of contract, free agreement between the parties.
Almost complete flexibility for employer in terms of hiring.
But content and termination are subject to regulation.

Question 2

What is the dual function of the contract of employment?

Answer 2

Pre-condition for access to labour rights and protections for workers.
Underpinning employer’s managerial authority.

Question 3

Is hiring workers to perform work just like any other market transaction?

Answer 3

Differences in the bargaining powers of the parties, power to control hiring process and to determine form and terms of employment. Unlimited power to terminate and its disciplinary function.

Is status, broadly conceived, still relevant today? Employment is not only contractual but also a social relationship. Relevance of public policy concerns and need to override private ordering.

Question 4

What is the nature of a contract of employment?

Answer 4

A personal contract. The person themself is hired. No substitution.
Bilateral relationship. Mutuality – the wage/work bargain.
Employment contract is indefinite and incomplete.
- Managerial prerogative and subordination adds orders and individual jobs to do.
Imbalance of power. Unequal bargaining positions.
There may be a risk of abuse by the employer due to this imbalance.
Gap between express terms and implicit expectations.

Question 5

What is the case of MacInnes v Gross [2017] EWHC 46 (QB) an example of, in terms of the contract of employment?

Answer 5

General common law provisions that apply to any assessment of whether a binding and legally enforceable contract exists apply equally to the contract of employment.

Question 6

What is the case of Wood v Capita Insurance Services Ltd [2017] UKSC 24 an example of, in terms of the contract of employment?

Answer 6

Generally, courts adopt an objective approach to interpreting contracts to assess the objective meaning — including the language and commercial implications.
Textual analysis more likely where it is professionally drafted.
Greater emphasis on the factual matrix where no professional involvement or inequality of bargaining power.

Question 7

What are written statements?

Answer 7

No requirement for the contract to be written, but employer obliged to provide written statement.
ERA 1996, s1.
S4 statement of changes.
S8 pay slips.
New EU Directive 2019/1152 on transparent and predictable working conditions.
Workers (Predictable Terms and Conditions) Act 2023 is expected to come into force next year.
Provides statutory right to workers to request predictable work patterns.

Question 8

Who is entitled to a written statement?

Answer 8

Personal scope.
Used to apply only to employees, but legislation has been amended to include workers.
Excluded categories: relationships last for less than a month (ERA s198).
Time frame ERA s1(2): from first day of employment (wider statement within 8 weeks).
Subsequent changes.

Question 9

What particulars are included in the written statement?

Answer 9

Particulars relating to:
Names of employer and employee. Date when employment began. Date when period of continuous employment began. Rate of pay or method of calculation. Pay intervals. Notice. Job title/description. Period/term if not permanent. Place(s) of work and address. Any applicable collective agreements. Details of work outside UK if applicable. Disciplinary rules and procedures. Contracting out certificate.

Question 10

What terms may be included in the written statement?

Answer 10

Terms, if any, relating to:
Hours of work. Holidays and holiday pay. Incapacity for work and sick pay. Pensions and pension schemes.

Question 11

What does ERA 1996 s3 set out for disciplinary procedures?

Answer 11

Person to whom the employee can appeal in respect of disciplinary decision or decision to dismiss.
Person to whom the employee can apply to seek redress of any grievance and details of the application process.
Any further appropriate steps.

Question 12

What does ERA s11(1) provide for enforcement?

Answer 12

“…the employee may require a reference to be made to an employment tribunal to determine what particulars ought to have been included or referred to in a statement.”

Question 13

What does the case of Eagland v BT plc [1993] ICR 644 tell us about missing or inaccurate terms?

Answer 13

“The wording of the section makes it perfectly plain … that there may be no such terms and there is nothing in any section of the Act which empowers or requires the tribunal to impose upon the parties terms which have not been agreed when the statute recognises that it may be the case that no such terms have been agreed.”

Question 14

What does the case of Southern Cross Healthcare Ltd v Perkins [2011] ICR 285 tell us about missing or inaccurate terms?

Answer 14

“The reference in section 11(1) of the 1996 Act to a determination of what particulars ‘ought to have been included’ is not an invitation to judicial creativity.”

Question 15

What does the Employment Act 2002 s38 say about the provision of sanctions for an employer failing to provide a written statement of employment?

Answer 15

No general monetary sanction.

In the context of another claim e.g. unfair dismissal, redundancy, discrimination.
Compensation of at least two weeks’ pay.
Up to 4 weeks’ pay where ‘just and equitable’.

Question 16

What does System Floors UK Ltd v Daniel [1982] ICR 54 (EAT) tell us about the nature of the written statement?

Answer 16

“Very strong prima facie evidence of what were the terms of the contract between the parties but does not constitute a written contract between the parties.” (p55D).

But, a burden on the employer to show that the terms are different from those set out in the written particulars.

Question 17

What are implied terms?

Answer 17

Why implied terms?
The ‘psychological’ contract.
Often expressed as duties: of the employer, the employee or mutual.
Breach of an implied term can be considered breach of contract.
Important implied terms: mutual trust and confidence (+ related expression).

Question 18

What is the implied term of mutual trust and confidence?

Answer 18

Minimum standard for the employer (mainly).
Very important in the context of constructive dismissal.
Unreasonable behaviour by the employer could be considered breach of the contract (Western v Sharp [1978]).

Question 19

What is a breach of mutual trust and confidence?

Answer 19

Damage to the employee’s reputation due to employer’s business contract.
Balance between employer’s interest in managing the business and employee’s interest to be treated fairly (Mahmud v BCCI (Malik) [1997]).
Motive not important, what matters is the effect on the employee.

Question 20

Are heated arguments in the workplace a breach of mutual trust and confidence?

Answer 20

Whether duty is broken depends on whether employer holds the view (e.g. Courtaulds Northern Textiles v Andrew).

Question 21

What are the employee’s duties?

Answer 21

Duty to co-operate/perform in good faith.
To adapt.
Duty of loyalty or fidelity.
Confidence (confidential information).

Question 22

When can employees refuse to obey their duties?

Answer 22

Unlawful orders, health and safety risks.
Dismissal for non-compliance would be unfair.