THE UNWRITTEN EMPLOYMENT CONTRACT

This article follows on from the article in HR Solutions Newsletter, September 2003 on implied terms in redundancy the issue of implied and expressed terms in contracts of employment continues to be a hot issue.

Recent Employment Tribunal decisions have made it clear that when someone is employed a Contract of Employment exists-whether it is in writing or not. 'Common Practice', 'normal behaviour' and 'obvious events' form part of an unwritten but binding verbal or written Contract of Employment.

There are four types of terms in an Employment Contract:

Expressed terms are arrangements agreed between the parties either verbally or in writing

Implied terms are arrangements that have not been spelt out but are regarded as being in place because they are:

		too obvious to be worth putting on record
		common practice in the industry concerned
		presumed to exist because of the way the parties have conducted themselves

Incorporated terms are drawn from collective agreements, union agreements, workplace rules or terms that apply to other employees doing similar work

Statutory terms are the requirements of employment law, whether the parties are aware of them or not.

It is also assumed that an implied degree of confidence and trust must exit between employer and employee. Breaching of this implied term would incline Courts and Tribunals to favour whoever has been disadvantaged as a result.

This subject also puts a psychological slant on the contract as employees now also have an expectation and a perception of their working environment and the factors of their employment whether or not they are expressed. For example, the expectation of training and career development.

Any breakdown in this 'psychological contract' will lead to demotivated and resentful employees.

Therefore, it is essential that this is managed effectively to reduce risks and maintain business efficiency.

From: HR Solutions Newsletter: September 2003

For further details see the article Company Values and Are You a 21 st Century Employer ?.

Overview of Employing Home Workers

If the employee works solely for one employer on a regular basis then they have employed status, if the employee works for other employers, a contract for services could be given.

All home workers employed on an employed basis must be given a contract of employment based on the standard in-house worker's contract with modifications where necessary and the issues that will require special attention will be:

Other Issues

Health & Safety - you will have a duty of care towards these employees and will have an obligation to make a risk assessment of the working environment and to ensure a safe system of working.

Due regard is to be given by the employee for their own health and safety that is likely to be affected by their activities and you must ensure that they are aware of such.

Insurance - you need to establish whether there is suitable insurance cover in existence for the employee personally, for the equipment used and for the property at which the work is carried out.

Restrictions - local authority planning restrictions, or conditions in an employee's mortgage arrangements may affect the sort of work that can be performed at home that may include affecting Council Tax.

Employment Rights - they have the same statutory employment rights on the same basis as your in-house employees

National Minimum Wage - ensure that you always pay the appropriate NMW or more if the work is not comparable to the job of an in-house worker