Contract of Employment
Introduction
Contract Index
Contract Terms
Contract Examples
External Links
The employment contract establishes the working relationship between the employer and the employee. Employees agree to sell their labour in return for certain rewards from the employer. Contracts are legally binding agreements. Employment contracts, like most other contracts, do not have to be made in any particular form But if no written contract exists the courts will interpret the contractual terms in the light of normal trade practice and what seems fair to both parties, the outcome of such legal intervention rarely satisfies either party.
It is then essential that a written contract is used for all employees and that that contract is established at the beginning of the employment relationship. Similarly any changes to the contract should be recorded in writing and a copy kept by both parties.
In any case employers must give employees a written statement of particulars within two months of the start of employment. For the sake of convenience most employers combine the written statement with the the contract of employment and issue it at the outset of employment.
Most employers also provide a staff handbook to employees. This differs from the contract in that it gives general statements on the way the employee is to behave at work but it is not meant every word will be literally read (as in the contract).
There is an ever growing list of contractual terms, some might say thought up by lawyers to make money. Organisations need to stand back and include only those issues they think are reasonable. It is the writers experience that it is very unlikely many of these matters will arise in the normal course of employment.
Finally employers should bear-in-mind that arbitrary or capricious exercise of a contractual power is likely to destroy the relationship of trust and confidence, causing a breach of contract. This in turn may allow the employee to claim constructive dismissal. Examples of such behaviour might be inconsistent bonus awards or insisting an employee carries out duties that are not part of their job.