Specifying Terms

Contract Law

The terms of the employment relationship, including the mutual rights and obligations of employees and employers, depend in large measure on the terms of the particular employment contract. The basic principles of contract law apply to employment contracts. See the sections on contract law.

To a large extent employer and employee are free to ‘agree ‘ the terms of employment. Many aspects of the employer and employee relationships will turn on what the terms of the contract are.In practice, there may be very little element of free agreement in that the employee may have to take and accept the employer’s standard terms and conditions.

Contract terms are as supplemented by a substantial amount of employment legislation. Employment legislation provides for mandatory rules in relation to many aspects of the employment relationship. These rules usually override any contract of employment varying them or granting lesser rights. They are said to create a “floor” minimum rights for employees. Typically under employment legislation, the employer and employees can agree more generous, more favourable terms to be employees but not less generous terms.


Written Terms

There is no general requirement that an employment contract should be in writing. There are some exceptions, such as by statute in relation to certain apprenticeships.

Generally, an employment contract need not be in writing. Even if an employment contract is in writing, the contract may not be complete.  There may be terms which are implied in the particular circumstances at common law.

Mandatory employment legislation may inform enhance or overrule the terms of the contract in some respects. The actual rights and obligations may depend on a combination of the contract of employment, implied terms and the minimum legal or statutory rights which the law prescribes.

There is a requirement that a statement of the terms of employment must be given to an employee within a certain period after commencement of employment. These terms may form part or a substantial part of the contract or the whole contract.

The notification of terms of employment is made after employment commence. Under contract law, the terms of the contract of employment will be fixed at the commencement of employment, although they may be varied afterwards.Where there is a change in the terms of employment, a further notice must be given.


Formality of Contracts

Some employees, particularly more senior employees, may have formal employment contracts. The contracts of senior employees may be negotiated between legal or other advisers. If there is a written employment which appears to cover all matters then the normal contract presumption will apply, that it comprises the entire agreement.

More commonly, employees are given a letter of appointment or standard employment contract on its standard terms and conditions, without the possibility for negotiation of the terms. In other cases, there may be no written employment contract, but the terms of employment as notified under statute confirm the key terms of the contract.

In some cases, some or many contract terms may be found in a Staff Handbook.It may include or be supplemented by policies on a range of issues. Some may be subject to change from time to time.


Variations

Is it is very common for the terms of the contract to change over time. Contract law requires the consent (at least notionally) of the parties to all terms and conditions. Any variation of the terms and conditions, also require the consent of both parties.

The purported unilateral change in terms may be a breach of contract and may amount to constructive dismissal. However, the employee should not resign without going through appropriate consultations and discussion as the courts and tribunals rarely uphold constructive dismissal claims where one party takes preemptive action.

New work practices or proposals may emerge and effectively be accepted by employer and employees, by being acted on and implemented without objection. The original written or other contract is varied by additional or substituted terms that are effected verbally or by conduct.

Some contract terms may refer to another document, such as a particular policy or the terms of a pension or other benefits scheme as it exists or is varied from time to time, perhaps at the discretion of the employer or another. The employee may avail of the scheme or terms as they exist from time to time but have no right to object to changes. The employee may be able to require in some cases that the employer’s discretion is exercised fairly and in good faith in accordance with the implied general duty of mutual good faith.


Statutory Implied Terms

 

There are a number of types of implied employment contract terms. One type of implied terms are those implied by employment protection legislation. They are dealt with in the other chapters in this guide. They include rights not to be unfairly dismissed, freedom from discrimination, rights on redundancy, minimum notice, etc..

Health Safety and Welfare legislation and common law duties of employers liability imply terms into a contract of employment. These cover not only the employer’s duty but also an employee’s duty to conduct himself with reasonable care and attention.


Common Law Implied Terms

An implied term can arise based on the presumed intention of the parties.Terms may be implied into employment contracts by custom or practice. Many industries or workplaces have particular customs or practices which may be incorporated into the employment.

Some terms may be incorporated of necessity. In order to be incorporated, the term must be reasonable and necessary so that the contract would be ineffective without it. It must be obvious and goes without saying and must not contradict the express terms of the contract.It may be a necessary legal incident of the contract.

Where an employee alleged in an Irish case that there was an implied obligation on directors of a then liquidated company to obtain employer’s liability insurance, it was held that the implication of such a term was not an absolutely necessary requirement and the argument was rejected.


Implied from Collective Agreement

In unionised employment, there are commonly collective agreements, which deal with matters that may become terms and conditions. New employees should be given a copy these agreements in so far as they are affected by them.

Where collective agreements are varied, the varied collective agreement may be incorporated into the contract. However, it cannot generally be incorporated, if the employee objects.

Separately, there are provisions under Industrial Relations legislation by which certain terms and conditions can be lawfully made part of an employment contract automatically. See our chapter in relation to Joint Labour Committees and Joint Industrial Councils. There are some other cases in the public or semi-state sector where legislation in the particular sector may bear directly on employment contracts.


Duty of Loyalty and Good Faith

Employees have a duty of fidelity and loyalty in employment. There is a requirement to maintain the necessary trust and confidence that must underpin an employment relationship. An employee who receives a secret payment from a customer would breach the duty of fidelity. The employee would generally be made repay such sums.

The copying of key information such as client lists and confidential information prior to leaving employment may constitute a breach of the duty. The duty of fidelity may imply a duty to maintain information confidential after cessation of employment.  For example, a butler who sold secrets and personal information about his employers to a national paper was found to be in breach of the duty.

The duty of fidelity is often referred to as a duty of trust and confidence. Both employer and employee have a mutual duty. Breach by either party of the duty may entitle him to terminate employment and to claim damages.


Notifying the Terms of Employment

There is an obligation on an employer to deliver particulars of the terms of employment. It applies to employees employed more than eight hours a week.  This statement must be provided in writing not less than two months after commencement of employment. It must contain the following details

Reference may be made to a collective agreement, which may be relevant to the terms and conditions of employment. If an employee is required to work outside the State for a minimum period of one month, certain further information must be given, including the period of employment outside the state, currency of payment and of benefits in kind and the repatriation terms and conditions.

Employers must notify employees of changes in the terms and conditions as soon as possible, but the later than one month after they occur.

Complaints in relation to rights under the legislation may be referred the Workplace Relations Commission. Compensation of up to four weeks’ remuneration may be ordered.


Statutory Information to be Notified

The information required to be notified to the employee is as follows

  • the full names of the employer and the employee;
  • the address of the employer in the State or, where appropriate, the address of the principal place of the relevant business of the employer in the State or the registered office (within the meaning of the Companies Act);
  • the place of work or, where there is no fixed or main place of work, a statement  specifying that the employee is required or permitted to work at various places;
  • the title of the job or nature of the work for which the employee is employed;
  • the date of commencement of the employee’s contract of employment;
  • in the case of a temporary contract of employment, the expected duration thereof or, if the contract of employment is for a fixed term, the date on which the contract expires,
  • a reference to any registered employment agreement or employment regulation order which applies to the employee and confirmation of where the employee may obtain a copy of such agreement or order;
  • the rate or method of calculation of the employee’s remuneration and the pay reference period for the purposes of the National Minimum Wage Act;
  • that the employee may, under the National Minimum Wage Act request from the employer a written statement of the employee’s average hourly rate of pay for any pay reference period;
  • the length of the intervals between the times at which remuneration is paid, whether a week, a month or any other interval;
  • any terms or conditions relating to hours of work (including overtime);
  • any terms or conditions relating to paid leave (other than paid sick leave);
  • any terms or conditions relating to incapacity for work due to sickness or injury and paid sick leave, and pensions and pension schemes;
  • the period of notice which the employee is required to give and entitled to receive (whether by or under statute or under the terms of the employee’s contract of employment)to determine the employee’s contract of employment or, where this cannot be indicated when the information is given, the method for determining such periods of notice;
  • a reference to any collective agreements which directly affect the terms and conditions of the employee’s employment including, where the employer is not a party to such agreements, particulars of the bodies or institutions by whom they were made.

The statement furnished by an employer shall be signed and dated by or on behalf of the employer.


Duties on Change in Employment Terms

Whenever a change is made or occurs in any of the particulars of the statement furnished by an employer, the employer shall notify the employee in writing of the nature and date of the change as soon as may be thereafter. This may be not later than—

  • 1 month after the change takes effect, or
  • where the change is consequent on the employee being required to work outside the State for a period of more than 1 month, the time of the employee’s departure.

This obligation does not apply in relation to a change occurring in provisions of

  • statutes or instruments made under a statute other than a registered employment
  • agreement or employment regulation order, or of any other laws or of any administrative
  • provisions or collective agreements referred to in the statement.

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)       Beauchamps, 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