An employment contract is the agreement made between an employer and employee when a job offer is accepted. It lays out the rights, employment conditions, responsibilities and duties of the employee. Such a contract is legally binding, and although it does not have to be written down, its terms do have to be agreed between the two parties.
One of the fundamental characteristics of employment contracts are its terms. If something is not detailed in this section, then under law, the employee does not have to carry out this task. Accordingly, many employment contracts will state that the individual is required to carry out ‘any reasonable activity’. Most things covered in the terms of a contract are elementary issues like wages, start date, finish date, duties, responsibilities and misconduct regulations.
Contract terms may be:
- in a written contract;
- in an employee handbook or on a company notice board;
- in an employee’s offer letter;
- required by law (eg, the need to pay at least the National Minimum Wage);
- in collective agreements (negotiated agreements between employers and trade unions or staff associations);
- implied – automatically part of a contract even if they’re not written down (eg, an employer’s duty to provide a safe environment or the need for a driver to have a valid licence).
Breach of contract
If one of the parties breaches the terms of the employment contract, this could lead to legal action being taken against the employer or to the employee being dismissed.
An employer can breach an employment contract in a number of ways. These include: threatening the employee with dismissal if the decline to work longer than the hours set out in the contract; asking them to perform duties not laid out in the contract; bullying; lateness of pay, or failing to consult the employee about contract changes.
If a breach occurs, an employee you should try and resolve the matter with the employer. They should pursue the company’s grievance procedure or, if all else fails, begin legal action.
Employees can also be found in breach of contract if they fail to adhere to their contract terms and conditions. This could involve minor issue such as lateness, absenteeism, or misconduct, and could result in a formal warning or a disciplinary proceedings being launched. For more serious breaches, eg, theft from the employer or assault of a colleague, they could be summarily dismissed for gross misconduct.
Any changes to an employment contract that alter working terms or conditions must be agreed to by both the parties.
The employer may want to make changes to a contract for a host of reasons. For example, an upturn or downturn in the business may require a change to the employee’s pay or weekly hours, or, as is sometimes required by chains which have several outlets in one country, the employee’s may be requested to relocate their place of work.
Employees can also request a change in employment contracts, stating their reasons to their immediate superior. It could be a request for an improved salary, a longer working week, or a reduction to part-time hours.