An employment contract is a legal agreement between you and your employee. It sets out both of your obligations towards each other and the rights and responsibilities in the employment relationship. Employment contracts are crucial for a successful employment relationship. Likewise, they serve as a reference tool for any confusion concerning your employee's work. Therefore, you should ensure that you draft your employment contracts carefully and correctly. This requires you to understand the main employment terms your contract should contain and those required by law. This article will explain express and implied terms of an employment contract. It will give examples of each and highlight some helpful information about them.
Express Terms of Employment Contracts
Express terms of an employment contract are the specific terms within it. They cover explicit rights and duties. For example, information like your employee's pay and working hours are all express terms. Indeed, express terms of an employment contract are those you and your employee agree to.
Express terms are agreed upon in writing or verbally at the interview with your employee. However, some express terms must be put in writing within a ' written statement of particulars'. Essentially, this will be a document containing the main conditions of your employee's employment with you. Likewise, you must give this to your employee before they start their job with you or on the day that they begin.
Additionally, some express terms are typical to find in writing within an employment agreement. These include:
- the job title;
- the pay rate;
- when you pay your employee;
- working hours;
- sick pay;
- notice pay;
- information about pensions, including any pensions schemes; and
- collective agreements. These are where you have an agreement with your employees' representatives to negotiate their terms and conditions.
Implied Terms of Employment Contracts
Implied terms of an employment contract are the terms that should be evident to both you and your employee. For example, the understanding that an employee should not steal from you or that they must be polite when dealing with clients. You can think of implied terms as the silent terms of an employment contract. Indeed, they exist the moment both parties enter into the contract.
Additionally, you may have implied terms in your employment contract:
- through custom and practice;
- through law; or
- to demonstrate what you both intended in the employment contract.
Despite implied terms of an employment contract being obvious and silent, they are still essential to ensure a good working relationship between you and your employee. Sometimes they are in place because they are needed, and there is no express term on this subject.
As implied terms of an employment contract are obvious terms, there is no need to write them. However, it is still good practice to clarify rights and obligations. For example, you may decide to write them in an employee's handbook.
Further, some implied terms should be present in every employment contract because they are protected by the law. Therefore, you have no choice as to whether or not to include them. Examples of these are implied terms relating to:
- equal pay;
- your duty of care;
- a safe working environment;
- mutual trust and confidence;
- acting in good faith;
- dealing with any grievances; and
- working in confidence, e.g. maintaining trade secrets.
Valuable Points to Consider
Your employment contract and working relationship with staff will give rise to numerous obligations. Sometimes, these obligations may not be clear to you, or there is a misunderstanding between your expectations and those of your staff.
First, it might be the case that an express term has more than one meaning. Generally, a court will use the meaning that least favours the person who wrote it.
Second, you cannot use an express term to exclude an implied term if it is one implied by law. You also cannot waiver some implied terms from an employment contract by using an express term unless you and your employee agree to this.
Third, you also cannot override express terms with an implied term.
Finally, if you leave an essential term out of your employment contract, a court can imply this into the agreement. A court will do this when it believes that when you and your employee entered into the employment contract, you both intended it to include it.
Key Takeaways
Employment contracts are crucial to your relationship with your employees, so it is essential to draft them correctly. To do so, you need to ensure that you understand what employment contracts should contain, such as express and implied terms. For example, your employment contracts will have express terms such as the pay rate and your employees' work hours. They will also contain implied terms reasonably obvious to you and your employee. Some of these terms are a legal requirement, so you must be aware of them. For example, your duty of care towards your employees is a legal requirement.
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