Contracts of Employment

The relationship between employer and employee is governed at common law by a contract of employment. This is so even if nothing has been put into writing - an employment contract may simply be an oral agreement. Statute, in the form of the mass of employment legislation enacted since the Contracts of Employment Act 1963, has conferred a number of non-contractual rights and obligations on employees and employers.

Many statutory rights, while not contractual in themselves, are nonetheless dependent on the existence of a contract of employment. For example, the right to claim unfair dismissal or a redundancy payment only applies to employees, that is, workers employed under a contract of employment. Similarly, the right not to suffer a detriment is, on the whole, only available to employees. An understanding of the law relating to contracts is therefore crucial to an understanding of employment law as a whole.

This Handbook aims to provide a clear and practical guide to the basic legal principles that govern the formation, existence and termination of employment contracts. It is set out as follows:

• Chapter 1 deals with the basic requirements for forming an employment contract - offer, acceptance, an intention to create legal relations and consideration. It also considers the thorny question of who is an employee and looks at special categories of workers such as casual workers, homeworkers and company directors
• Chapter 2 is concerned with the actual terms of employment contracts. Some terms may be express, some may be implied and some may be incorporated from other sources such as collective agreements
• Chapter 3 sets out the statutory requirement for written particulars of employment, otherwise known as S.1 statements
• Chapter 4 describes the circumstances in which a contractual term will be void and unenforceable. It also considers the situations in which the whole contract will be illegal, thereby depriving the parties of any rights under it
• Chapter 5 looks at a special type of contractual term - restrictive covenants; and
  
  Chapter 6 deals with the crucially important subject of variation of contract
• Chapters 7, 8, 9 and 10 explain the various ways in which employment contracts can come to an end. These include: termination by dismissal; breach of contract claims and in particular wrongful dismissal; termination by resignation, agreement or performance; and termination by operation of law.
• Chapter 11 deals with the problems that can arise in pinpointing the date of termination of a contract.

This Handbook was published in August 2001.