Employment contracts

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As employment lawyers in Scotland, we have experience in all kinds of employment contract matters and work on behalf of employees nationwide.

From understanding contract terminology to reviewing HR policies and procedures, not to mention how to handle contract disputes effectively, our employment law experts have helped countless employees with their employment contracts and can do the same for you.

What is an employment contract?

An employment contract is a legally binding agreement between an employee and their employer. It should lay out the conditions of employment and include everything you need to know, from salary to working hours, benefits, job title, holiday entitlement and so on.

Employment contracts are based on the general principles of contract law, and some are more detailed than others. Some don’t rely on documentation at all, and instead, are inferred from sources like letters, emails, company handbooks, and oral exchanges.

That said, it’s now a legal requirement for employers to provide a written statement of particulars of employment to the employee on their first day, outlining the major terms upon which they are employed.

Can changes be made to an employment contract?

Changes can only be made to your employment contract if:

  • There’s a flexibility clause in the contract allowing changes to be made (there are limits to how far an employer can make changes relying on a flexibility clause).
  • You agree to the change with your employer (this agreement could be express or implied).
  • Your representatives, such as trade unions or staff associations, agree to it (if your contract allows for collectively negotiated terms to be incorporated into the contract).

If your employer tries to force a new contract onto you or change your contractual terms for no apparent reason, this could be a cause for legal action.

Terms your employment contract may include

The legal elements of an employment contract are known as “terms”.

Here are the categories of terms found in employment contracts:

Express terms

Express terms outline the intended legal arrangement between employer and employee. Precise wording, particularly for subjects like holiday and sick pay entitlements, is crucial to avoid contract disputes further down the line.

Oral terms have equal legal standing with written terms but can be challenging for employees to rely on in court. One of the difficulties is proving them in cases of conflict, so oral agreements tend to be risky, and documentation is important.

Incorporated terms

Incorporated terms form part of the employment contract, but they may be found in other documents, or be incorporated by statute.

For another document such as a policy, collective agreement, or handbook to be incorporated into contractual terms, it must be expressly set out in the contract of employment.

Although helpful for establishing the norm, these documents are not often expressly incorporated and can be difficult to enforce in a court of law.

An example of a term incorporated by statute is the inclusion in employment contracts of a "sex equality clause” by virtue of the Equality Act 2010. Another example is the right to a minimum notice period.

Implied terms

Implied terms aren’t explicitly included in a contract, but they’re expected from both employer and employee.

Examples of implied terms are:

  • The obligation not to, without reasonable and proper cause, act in a way that is designed (or likely to) seriously damage or destroy the relationship of trust and confidence the employee and employer have in one another.
  • The duty of fidelity.
  • The duty to pay.
  • The duty of an employer to provide a safe and secure working environment.

Implied terms don’t have a single legal principle, but one principle is the “officious bystander test”. This is if a term is deemed to be so obvious that it would have been included if it had been discussed when the contract was formed.

If an implied term is essential for the effectiveness of the contract, that term may be implied on the grounds of “business efficacy”.

Sometimes, a term can be implied if it is deemed part of the “custom and practice” of the employment relationship. To be implied by custom and practice, the term must be reasonable, notorious, and certain. Disputes involving this implied term can arise in relation to claims for enhanced redundancy payments.

If you have an issue regarding an implied term, it’s best to seek legal advice. We can help establish whether or not a term is implied and help you consider your next move, so get in touch to find out more.

Collective agreements and your employment contract

Collective agreements are arrangements between employers and employees’ representatives, such as staff associations or trade unions.

While a collective agreement typically doesn’t create a legally binding contract of itself, it can result in an individual’s contract of employment being varied in a legally binding way. Terms of such agreements may include how collective negotiations will be organised, who will represent employees, and other terms and conditions such as working hours or pay.

The company handbook and your employment contract

Company handbooks are useful human resources tools, but more often than not, they are not expressly incorporated into the contract of employment.

How we can help

As you might expect, employment contracts can get complicated, and the above is not an exhaustive list of terms, clauses, and legal considerations. There are also different rules depending on your employment status.

At Allan McDougall Solicitors, our team of approachable, expert employment lawyers can help you understand, negotiate and review your employment contract and resolve any employment contract issues and disputes.

Whether you're facing challenges related to breaches of terms and conditions, termination clauses, or any other contractual matter, we've got you covered.

If you’re unsure about your current employment contract, are in dispute with your employer, or have questions you need answers to, don’t hesitate to get in touch.

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