Business and Employment Law

1. Lecture 4: WB 11th February 2019 Express and Implied Terms Business and Employment Law

2. Contract of Employment • Why it matters • Important strategic managerial tool- anticipate changes in demand/where work done/ need for flexible roles and draft contract accordingly. • Protect vital interests such as confidential information, length of notice, etc.

3. Drafting Once terms are agreed they are binding and cannot be altered (or "varied") unless :- (i) the employee agrees to the change; (ii) the contract allows the employer to impose the change without consent; (iii) the contract is terminated. In the case of (iii) the employee may be able to seek compensation (see below).

4. Formation of Contract of Employment A contract of employment can exist without being written: 230 (2) Employment Rights Act 1996 (ERA) But ‘written particulars’ of main terms required by ss1-8 ERA 1996 – must be given within 8 weeks of start of employment

5. Written particulars “…provides very strong prima facie evidence of what were the terms of the contracts between parties, but does not constitute a written contract between parties” Systems Floors v Daniel [1981] IRLR 475 Browne-Wilkinson J sitting as president EAT

6. Written particulars Breach of supplying particulars/particulars incomplete : S38 Employment Act 2002 • 2 - 4 weeks pay if employer loses a statutory claim against him and he has not given the statement of employment particulars

7. Formation of Contract of Employment Express terms- terms to which both parties have agreed Implied terms Other possible sources e.g. staff handbooks or collective agreements, letters of appointment, ‘policies’- e.g. harassment policy

8. Collective Bargains An agreement between a trade union and an employer benefitting employees Not itself a contract – s179 TULR(C) Act presumed not legally binding . Individual must argue the term is incorporated into his contract.

9. Implied terms are:- (i) - terms that are too obvious too mention (eg that the employee will not steal from the employer); (ii) - those necessary to make the contract workable (eg that an employee whose contractual duties require driving must have a current driving licence) (iii)- those that are the custom and practice of the industry-evidential hurdle very high; (iv) terms imposed by law (eg the right not to be discriminated against in pay terms)

10. Implied Terms • No requirement for the employer to act reasonably – contractual however.... • Courts will consider ‘reasonable man’ approach – the officious bystander • Mears v Safecar Security Ltd [1982] IRLR183

11. Implied terms Inferring agreement or ‘back-door’ regulation? Implications for laissez-faire model if courts use terms for ‘fairness’ rather than ‘agreement’

12. Modern view (i) term derived from presumed intention of parties (ii) term as a necessary incident of the relationship concerned, unless the parties have expressly excluded it- - See SocieteGenerale, London Branch v Geys[2012] UKSC 63

13. Modern view- regulatory Thus- “the existence and scope of standardised implied terms raise questions of reasonableness, fairness and the balancing of competing policy considerations.“- per Dyson LJ in Crossley v Faithful and Gould Holdings Ltd [2004] IRLR 377 at [36]

14. Orthodox view "In my judgment as a matter of law reliance on an express term cannot involve breach of an implied term.” -- Johnstone v. Bloomsbury Health Authority [1991] ICR 269 CA

15. Implied Duties of Employer • Pay • Provide Work • Skilled Employees – William Hill v Tucker [1999] ICR 291 • Garden Leave

16. Other Implied Duties • To reimburse the employee for all reasonable work related expenses • To take reasonable care of employee safety • Provide competent work colleagues • Provide adequate equipment • To provide a safe place to work • To provide a safe system of working • AND the most important implied term ……..

17. DUTY OF MUTUAL TRUST AND CONFIDENCE Employer and employee will not conduct themselves "without reasonable and proper cause in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee" • Woods v. W M Car Services (Peterborough) Ltd [1981] IRLR 347, • Lewis v. Motorworld Garages Ltd [1985] IRLR 465 • Imperial Group Pension Trust Ltd v. Imperial Tobacco Ltd [1991] IRLR 66

18. Significance of the Duty

19. Mutual Trust and Confidence • The most important of all implied terms – examples include • RESPECT – Lewis v Motorworld Garages Ltd [1985]; • Mobility Clauses – United Bank Ltd v. Akhtar [1989] IRLR 507 • Corrupt Business – Malik v BCCI [1997] UKHL 23, • Grievance procedures- McConnell v Goold [1995]

20. Stress at Work – can constitute a breach of MT&C • One man’s stress is another’s adrenaline • Employer entitled to believe that employee is able to cope with demands of job. • Are the indications that the employee is not coping ‘plain enough for a reasonable employer to realise that something is wrong?

21. Stress at Work • Sutherland v Hatton [2002] • Barber v Somerset Council [2004] • Sandwell MBC v Jones [2004]

22. Bullying at Work – another example of breach of MT&C • From name calling, singled out for less favourable treatment to physical violence • If situation becomes intolerable and no action is taken • Can lead to constructive dismissal

23. Implied Duties of the Employee • Obedience - Pepper v Webb [1969];Wilson v Racher[1974] • Dress Codes – Schmidt; Smith v Safeway • Co-operation – Cresswell • Reasonable Care – when working/of employer equipment

24. Implied Duties of Employee • Duty of Fidelity (faithful service) • Moonlighting for Competitors –Hivak Ltd v Park Royal (1946) • Trade Secrets • Current & former employees • Confidential Information • Current employees only – Faccenda Chicken v Fowler

25. Implied terms v express terms Where a written term and an implied term say different things the express normally prevails. But a widely drafted written (express) term can be “limited” by an implied term: United Bank Ltd v. Akhtar[1989] IRLR 507 Johnstone v Bloomsbury Health Authority [1991] ICR 269 CA