Employment Contracts 1
Ryan Clement, barrister
Like with other contracts (such as, for example, commercial), a contract of employment consists of three key components in law: offer, acceptance and consideration. Basically, the offer of employment is made by the employer (I shall deal with the issue of counter-offers in a future snippet). This offer forms part of a binding contract when it is accepted by the employee. There are many considerations but two would be, for example, (1) the employee promises to undertake the work described in the contract and (2) the employer promises to pay the employee the agreed sum (wages, salary etc.) for the said work undertaken by the employee. Simple? Not quite!
Again, like with many contracts, a binding contract may be made orally or in writing. The former raises many problems because misunderstandings can arise and there are no records to support one party's view or the other's. However, that is not to say that a written contract is necessarily void of any problems, ambiguity or creating its own misunderstandings. One only as to see how a written term, stating that an employee 'may be required to do a reasonable amount of overtime as an when required having received reasonable notice' could be interpreted in a variety of differing ways by employer, employee and observer alike.
Added to the above are the implied terms in the contract that do not need to be written and or said. Under this heading are many terms, ranging from those that were so obvious they did not need to be stated to those that just happen due to custom and practice in the organisation or for the relevant industry to those imposed by law/statute, for example national minimum wage, minimum statutory notice etc.
It is important that parties seek to have as many terms of their agreement evidenced in writing as possible. It reduces the chances of a dispute over what a party intended, expected, anticipated etc. when they entered the contract, sometimes many years before and often with a person who no longer works for the organisation to verify or otherwise the initial intention or understanding.
It should, therefore, be apparent that when someone or an organisation says, 'I don't have a contract,' or, 'there is no contract,' what they truly mean is there is no "written" contract. There is, of course, a contract, otherwise on what basis did the employee undertake work Monday-Friday each week and on what basis did the employer pay for that work at the end of each month? In the next snippet I shall discuss the employer's obligation to confirm the main terms of the agreement in writing whether the employment contract is made orally or in writing.
Watch this space!
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