Contract Terms I

Employer

The parties to the contract should be specified. The contract for employment should identify the employer.  This may be readily apparent in most cases.  However, where there is a group structure, it may not be immediately apparent which company is to be the employer.

A business may have a number of group companies, partnerships or other entities.  The actual employer company or entity should be a party.  There is commonly flexibility to enable the employer to require the employee to work for group companies, where they collectively, undertake single or related businesses.

There is no general presumption that an employee must work exclusively for the employer. In most cases, he may be required by the employer to work for another, while remaining the employer’s employee.


Commencement

The employment contract should specify a commencement date.  This is of practical importance in that many statutory rights require a period of qualification.  This includes, in particular, the Unfair Dismissals Act, which save for certain limited grounds for dismissal which are deemed automatically unfair, does not apply until one year after commencement of employment. The Redundancy Payments legislation has a qualification period of two years.

Fixed term contracts may provide for a start and end date.  The Unfair Dismissals legislation makes specific provision for fixed term employment contract.  If there is a specified purpose, it must be set out. It should be provided that the contract terminates on expiry of the term or on completion or cessation of the purpose, in order to avail of the relevant exemptions.

The employment contract may provide for a probationary period. This is commonly three or six months.  The purpose of probation is to ascertain the employee’s competence and suitability.  There may be provision for the extension of probation.  The fact that a person is kept “on probation” beyond 12 months does not affect his Unfair Dismissal Act rights. In effect, the unfair dismissals act largely limits probation to 12 months.


Follow Instructions / Obey

The employee is usually obliged to obey lawful and reasonable management Instructions: An employee is obliged to carry out the lawful and reasonable orders of his employer that are within the scope of the employment he has contracted to do. An employee is not required to do anything illegal. The employer will be liable to indemnify the employee if the employee is found to be liable to another party as a result of the unlawful act:

The job specification should define the duties required of the employee.  They may be set out in a schedule or appendix, to a standard form of contract.  It may provide that the role may change and evolve over time.  It may require a degree of flexibility in order to meet the reasonable requirements of the employer.


Job Specification

A description of the job is important in order to avoid disputes as to the nature of the role. Employers will often wish to frame the job or role as broadly as possible so that they can require the employee to undertake other types of job or roles within the business. This may give the employer greater flexibility in reallocating the employee or requiring him to do other work. There are disadvantages for the employer in the event of a later claim of redundancy.

The extent of the job specification is of practical importance to both employer and employee. It may allow the employer redeploy or vary the role.  It may be the benchmark of whether the position or role is redundant.  Changes in role and deployment are subject to the parties’ general obligations of trust and good faith.

It is generally implied that employees must adapt to change and technology in the workplace.  This may include new methods of undertaking the work. There is no implied right to undertake one type of defined of work in one type of matter, even if a change reduces job satisfaction.


Qualifications

There may be a provision linking the employment to holding the directorship of a particular company.  A person may be obliged to resign as a director if his employment is terminated or vice versa.  Issues of fair procedures apply, notwithstanding that the company has the power to remove a director summarily.  Summary dismissal may constitute a breach of contract. The requirement for fair procedure is usually implied, even if not required by the contract.

Where the position requires a particular qualification and or membership of a particular body, this should be provided for.  It is deemed a fair dismissal, to dismiss an employee who lacks a required qualification for the job.  This must be a genuine requirement for the particular role.

It may be a requirement that the employee has a licence or a licence without endorsement.


Place of Work

The contract may specify the place of employment.  This may be a single workplace or several places. In the absence of a contractual provision, disputes may arise when an employee is required to work at a different location. In more recent times, home working and other flexible forms of work, have become more common.

The employer may require the employee to travel within Ireland or abroad.  It may be provided that if the employee is to work or travel to a particular place, a certain amount of notice must be given and expenses must be paid.

The contract may provide for the right to transfer employees to alternative work for operational or efficiency reasons. It is generally implied that there must be reasonable and sufficient grounds for moving an employee. It should not be done arbitrarily, simply because it is permitted. The employer and employee must act reasonably in terms of geographical mobility.


Working Hours

The most basic element of the contract of employment is the obligation to work in good faith and to devote attention, time and skill to the job during working hours, in the business interests of the employer, in a proper and efficient manner.

Working hours and holiday entitlement should be defined. The working time, holidays and public holidays legislation define certain public holiday and provide minimum holidays and time off.

The employee may be required to work and /or be available between certain hours. There are special provisions in respect of shift working.  The requirement to work shifts must be specifically provided for.

There is legislation in relation to employment hours and holidays. In some sectors, there is specific regulation of working hours. Employment legislation requires working times, rest periods, breaks, weekly rest to be set out.

Employees may be prohibited from engaging in other work, without the consent of the employer to the extent that it would be inconsistent with the employment.  Employees may be expressly precluded from mis-using employer’s connection and custom for the employee’s private benefit. The implied obligations will usually have much the same effect.


Flexible Hours

Provision may be made for overtime.  This may be optional or mandatory.  If it is mandatory, it must be in accordance with the working hour legislation and be clearly provided for.  Overtime payments (if any) should be set out. The computation and calculation of overtime should be provided.

Flexibility in working times may be required, for example, in “high” season. Rostering arrangements may apply. Overtime provision may be available or may be a requirement at that time.  Prior notice may be required. The arrangements may apply by custom and practice or through collectively negotiated agreements.

Contracts of employment may provide for lay off or short time work, periodically.  In seasonal industries, there may be a layoff of employees at certain times of the year.  Short-time work is work less than 50% of normal working hours.  Prior notice should be given.  Redundancy Act considerations may arise in certain cases.


Pay and Benefits

The obligation to pay is basic.  It may be specified as an annual, weekly or monthly rate or total. The employment contract should define the remuneration including, basic salary, overtime, bonuses, benefits in kind and other benefits.

The date of payment should be specified.  The method of payment may be provided for.  See the other articles in relation to the Payment of Wages Act.  Deductions must be in accordance with that Act.

Provisions for benefits, commissions, payments towards pension schemes, permanent health, medical health insurance, etc. should be specified where applicable. If the employee is eligible for profit-sharing schemes, share options schemes and pension schemes, this should be set out.

There may be provision for reimbursement of expenses incurred.  If an employer has to travel in the course of work, a company car may be provided. Alternatively, provision may be made for the reimbursement of travelling and hotel expenses incurred.  The basis of expenses and the procedure for claiming them should be specified. Where travel expenses are permissible, the class of travel permitted should be specified.  A degree of authorisation and pre-approval may be required.

If there is to be a company car, there should be flexibility for the employer to vary the entitlement. Where the employee uses his employer’s cars, the employer may be vicariously liable for accidents. The position with respect to motor and other insurance needs to be carefully considered.


Sick Pay

There is no statutory right to sick pay in Ireland. Disability or injury benefit may be payable under social welfare legislation. There may be a right to “sick pay” in the particular employment.  It may arise from the employer’s custom and practice. A right to sick pay may be implied in certain industries.

There may be a sick pay scheme in the particular employment. The terms of the scheme may be provided for in a formal document.  It may be basic or comprehensive. It may be provided through an insurer.

Where there is a right to sick pay, its duration, amount and its relationship with social welfare payments should be clarified. An employer may pay insurance to cover payments in the event of illness. The sick pay scheme should be compatible with social welfare and insurance available.

There may be insurance cover, which provides for the preservation of income if certain risk arises. It may be linked to a pension scheme.  Provision for proving medical conditions may apply. Certification may be required in relation to injury and illnesses, which specify the likely return date.  If the employee is absent for a prolonged period, multiple or periodic certificates may be required.

In the case of prolonged absence, questions may arise as to the employee’s capacity to do the job.  If employment is to be terminated due to incapacity, fair procedures must be scrupulously applied. Otherwise, there is a significant risk that the dismissal may be characterised as unfair.


Pensions

Employment contracts may provide for the normal retirement age.  It need not be 65.  The normal age of retirement is proposed to be increased over the next 10 to 20 years.  Compulsory retirement on reaching retirement age was formerly generally permissible under unfair dismissals and anti-discrimination legislation. It must now be specifically provided for and justified under anti-discrimination legislation.

There is no obligation to provide access to a pension scheme. Many employments do not provide pensions.  There is an obligation to provide access to, at a minimum, a Personal Retirement Savings Account (PRSA).  If there is, in fact, a pension, the employer must give the copies of the pension rules to the employees.

If pension rights are defined in an employment contract, then they may crystallise the pension entitlement in such a way as to leave insufficient flexibility for the employer. It is common for employment contract to provide only for the entitlement to join the pension scheme (maybe after a period), on such conditions as may apply from time to time under the relevant pension scheme or trust

Pension schemes generally allow for the employer to change the terms of the scheme or even terminate it.  Past contributions are secured, but the employer may wish to suspend or stop future contributions. The employer may have obligations in a defined benefit scheme to meet minimum funding standards to match the pension promise. It may be impermissible discrimination to exclude an employee from a pension scheme.


References and Sources

Primary References

Employment Law  Meenan  2014

Employment Law Supplement            Meenan 2016

Employment Law Regan & Murphy 2009 (2nd Ed 2017)

Employment Law in Ireland Cox & Ryan 2009

Other Irish Books

Employment Law Forde & Byrne 2009

Principles of Irish Employment Law   Daly & Doherty           2010

Employment Law Contracts (Book & CD-ROM)       Beauchamp’s, Solicitors         2011

Periodicals and Reports

Employment Law Yearbook (annual) Arthur Cox

Employment Law Reports

Irish Employment Law Journal

Employment Law Review

Legislation

Dismissal & Redundancy Consolidated Legislation   Barrett, G        2007

Irish Employment legislation (Looseleaf)       Kerr     1999-

Employment Rights Legislation (IEL offprint) Kerr     2006

Shorter Guides

Employment Law Nutshell      Donovan, D     2016

Employees: Know Your Rights           Eardly  2008

Essentials of Irish Labour Law           Faulkner          2013

Websites

Workplace Relations Commission http://www.lrc.ie/en/

Irish Human Rights and Equality Commission https://www.ihrec.ie/

Health and Safety Authority http://www.hsa.ie/eng/

UK Texts

Textbook on Employment Law, Honeyball et al 13th Ed. 2014

Labour Law, Deakin and Morris 5th Ed. 2012

Employment Law, Smith and Wood 13th Ed 2017

Selwyn’s law of Employment Emir A 19 Ed. 2016

Employment law : the essentials. Lewis D Sargeant M and Schwab M 11 Ed.2011

Labour Law Collins H, Ewing K D and McColgan  2012

Industrial relations law reports. (IRLR): Law Section,

Employment law Benny R Jefferson M and Sargent  5th Ed.  2012

Pitt’s Employment Law 10th  Ed. Gwyneth Pitt 2016

CLP Legal Practice Guides: Employment Law 2016 Gillian Phillips, Karen Scott

Cases and Materials on Employment Law 10th  Ed. Richard Painter, Ann E. M. Holmes 2015

Blackstone’s Statutes on Employment Law 2015 – 2016 Richard Kidner

Drafting Employment Contracts 3rd  Ed. Gillian Howard 2017

The Contract of Employment Edited by: Mark Freedland, Alan Bogg, David Cabrelli, Hugh Collins, Nicola Countouris, A.C.L. Davies, Simon Deakin, Jeremias Prassl 2016

UK Practitioner Services

Tolley’s Employment Handbook 2017 Mrs Justice Slade 2017

Butterworths Employment Law Handbook 2017 Peter Wallington 2017

Blackstone’s Employment Law Practice 2017 Edited by: Gavin Mansfield, John Bowers, John Macmillan 2017

UK Periodicals and Reports

The Employment Law Review 8th  Ed.   Erika C. Collins 2017

Industrial Relations Law Reports

Employment Law in Context: Text and Materials 2nd  Ed. David Cabrelli 2016