The Employment relationship- unit 1
OUTCOMES
1. Identify the principal clauses required by s.1 Employment Right Act 1996 and
understand the potential remedy an employee or worker has if these requirements
are not met.
2. Identify statutory restrictions on freedom to contract in employment contracts.
3. Draft additional clauses to meet the s.1 Employment Rights Act 1996 requirements
and also the specific requirements of the employer.
4. Advise as to the enforceability of post-termination duties
Definition of employee and employment contracts- see folder for statute
s. 230(1) ERA 1996 an individual who works under a contract of employment- thus contract of employment is
fundamental.
• Employee has more important employment right than other workers
• There is no need for an employee to have a written contract of employment, but the
employee is ALWAYS entitled to a s.1 statement
s.230(2) a contract of employment is a ‘contract of service whether express or implied, whether
oral or in writing’
Identifying a contract of The “Multiple Factor” Test:
service o Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National
Insurance
[1968] 1 All ER 433:
§ Three conditions for a Contract of Service:
• v Servant agrees to provide work in consideration for a wage.
• v Servant agrees, expressly or impliedly, that he will be subject to the
master’s control in a sufficient degree.
o Does the employer have “the power of deciding the thing to be
done, the way... the means... the time... and the place?” –
McKenna J, Ready Mixed Concrete
v The other provisions of the contract are consistent with it being a
contract of service.
o E.g. ability to delegate may be indicative that there is NOT a contract of service.
o The Court will look at the true nature of the agreement, not just what is written down:
§ Autoclenz ltd v Belcher [2011] UKSC 41: Supreme Court held that car valets were
employees. Written terms in the agreement providing that the valets were required to
, notify whether or not they were turning up for work, and that they could send a
substitute in their place were not reflective of the true relationship between the parties.
Requirements of a
contracts Expressly of implied-
1. Offer
2. Acceptance
3. Consideration
4. Intention to create legal relations (Sharpe v Bishop of Worcester)
No written contract:
• No legal requirement that an employment contract needs to be in writing- court has the
discretion to imply an employment contract.
• Dacas v Brook Street Bureau held that an employment contract is still a contract even
if made orally as it is based upon the same principles as contract law.
s.1 requirements
Where there is no written contract of employment, the law requires the employer to provide a
written statement of terms to their employees, in the absence of a contract, the written
statement should set out some minimum details about the terms governing the employment
relationship. S.1(1)
s.1
Variation of contractual terms
Cannot be done unilaterally- and requires the consent of the employee and the employer
Wandsworth London Borough Council v D’Silva the court held that the employer needs to use
clear and unambiguous language in a contract to be able to rely upon a clause that allows
unilateral variation. If the contractual terms are varied, they cannot be oppressive to the
employee.
Where an employer impose a unilateral variation of contractual terms: the employee has 4
choices
1. Agree to the variation either expressly or continuing to work without protest
2. Resign and complain constructive dismissal and wrongful dismissal (breach of varying
terms without consent)
3. Refuse to work under the new contract and force the employer to take such steps as it
thinks appropriate
4. Stand and sue- continue to work under protest and seek damages for breach of contract
or unfair dismissal if the breach was so serious
Pg 60 more detail of variation
s.1 ERA 1996 Before the employee starts work, the employer must give the individual a written statement of
the terms and conditions. Provided within 2 months of employment
Relates to the following:
(a) Identity of the parties
(b) Date employment began
(c) Date continuous employment began
(d) Whether the contract is subject to a probationary period
(e) Scale or rate of remuneration and intervals of pay and any fringe benefits
(f) Hours of work
(g) Holidays and holiday pay
(h) Sickness and sick pay
(i) Pension and pension schemes
, (j) Details of any training that will be provided
(k) Length of notice required to determine the contract
(l) In the case of non-permanent employment, the period for which it is expected to
continue or if a fixed term, the date it will end
(m) Job title or brief description of the work
(n) Place or places of work
(o) Particulars of any collective agreements which directly affect the terms and conditions
of employment
(p) Where employees are required to work outside the UK for a period of more than one
month, the period of such work, currency in which the payment is made, benefits
provided and terms relating to the return to the UK
(q) Details of disciplinary and dismissal rules and grievance procedures (ERA 1996 s.3)- to
avoid the procedures becoming contractual in nature, the s.1 statement should make it
clear they are not.
(r) Whether a contracting out certificate is in force (under pensions schemes act 1993).
Although a statement must be given to the employee, it may refer him to a document that is
reasonably accessible and which contains full details of the terms relating to pension schemes
and dismissal and disciplinary procedures and grievance procedures (ERA 1996, ss2(2) and
3(1)(aa).
Any changes in the terms of employment must be notified by the employer within 1
month of the change and must be informed in writing under s.4
Stefanko v Maritime Hotel- the statement under s.1 must be given even if the employment ends
prior to the two month period of employment required by s.2(6) ERA 1996.
Exceptions to s.1 page • Written contracts- there is no need for separate s.1 statement if the written contract
34 contains all of the relevant terms under s.1- under s.7
Implied terms in a • Pay wages and provide work
contract page 35-40 • Indemnify employee for costs incurred in the course of their work- re Famatina
• Reasonable care of the employees safety and working conditions
• Duty of mutual trust and confidence- act in a manner that upholds the relationship of
mutual trust and confidence between the employee and employer
Duty of mutual trust and confidence:
Breach of this implied term is automatically repudiatory- Morrow v Safeway stores
o Unjustified imposition of a final written warning: Stanley Cole v Sheridan
o Serious breach of employer’s failure to make reasonable adjustment: Greenhof v
Barnsley Metropolitan BC
o Use of foul and abusive language
o Raising performance concerns when the employee was off sick due to mental
health issues- Private Medicine Intermediaries Ltd v Hodkinson
• Duty to notify on termination without notice (societie generale v geys) employer must
notify the employee in clear terms that the contract has ended
OUTCOMES
1. Identify the principal clauses required by s.1 Employment Right Act 1996 and
understand the potential remedy an employee or worker has if these requirements
are not met.
2. Identify statutory restrictions on freedom to contract in employment contracts.
3. Draft additional clauses to meet the s.1 Employment Rights Act 1996 requirements
and also the specific requirements of the employer.
4. Advise as to the enforceability of post-termination duties
Definition of employee and employment contracts- see folder for statute
s. 230(1) ERA 1996 an individual who works under a contract of employment- thus contract of employment is
fundamental.
• Employee has more important employment right than other workers
• There is no need for an employee to have a written contract of employment, but the
employee is ALWAYS entitled to a s.1 statement
s.230(2) a contract of employment is a ‘contract of service whether express or implied, whether
oral or in writing’
Identifying a contract of The “Multiple Factor” Test:
service o Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National
Insurance
[1968] 1 All ER 433:
§ Three conditions for a Contract of Service:
• v Servant agrees to provide work in consideration for a wage.
• v Servant agrees, expressly or impliedly, that he will be subject to the
master’s control in a sufficient degree.
o Does the employer have “the power of deciding the thing to be
done, the way... the means... the time... and the place?” –
McKenna J, Ready Mixed Concrete
v The other provisions of the contract are consistent with it being a
contract of service.
o E.g. ability to delegate may be indicative that there is NOT a contract of service.
o The Court will look at the true nature of the agreement, not just what is written down:
§ Autoclenz ltd v Belcher [2011] UKSC 41: Supreme Court held that car valets were
employees. Written terms in the agreement providing that the valets were required to
, notify whether or not they were turning up for work, and that they could send a
substitute in their place were not reflective of the true relationship between the parties.
Requirements of a
contracts Expressly of implied-
1. Offer
2. Acceptance
3. Consideration
4. Intention to create legal relations (Sharpe v Bishop of Worcester)
No written contract:
• No legal requirement that an employment contract needs to be in writing- court has the
discretion to imply an employment contract.
• Dacas v Brook Street Bureau held that an employment contract is still a contract even
if made orally as it is based upon the same principles as contract law.
s.1 requirements
Where there is no written contract of employment, the law requires the employer to provide a
written statement of terms to their employees, in the absence of a contract, the written
statement should set out some minimum details about the terms governing the employment
relationship. S.1(1)
s.1
Variation of contractual terms
Cannot be done unilaterally- and requires the consent of the employee and the employer
Wandsworth London Borough Council v D’Silva the court held that the employer needs to use
clear and unambiguous language in a contract to be able to rely upon a clause that allows
unilateral variation. If the contractual terms are varied, they cannot be oppressive to the
employee.
Where an employer impose a unilateral variation of contractual terms: the employee has 4
choices
1. Agree to the variation either expressly or continuing to work without protest
2. Resign and complain constructive dismissal and wrongful dismissal (breach of varying
terms without consent)
3. Refuse to work under the new contract and force the employer to take such steps as it
thinks appropriate
4. Stand and sue- continue to work under protest and seek damages for breach of contract
or unfair dismissal if the breach was so serious
Pg 60 more detail of variation
s.1 ERA 1996 Before the employee starts work, the employer must give the individual a written statement of
the terms and conditions. Provided within 2 months of employment
Relates to the following:
(a) Identity of the parties
(b) Date employment began
(c) Date continuous employment began
(d) Whether the contract is subject to a probationary period
(e) Scale or rate of remuneration and intervals of pay and any fringe benefits
(f) Hours of work
(g) Holidays and holiday pay
(h) Sickness and sick pay
(i) Pension and pension schemes
, (j) Details of any training that will be provided
(k) Length of notice required to determine the contract
(l) In the case of non-permanent employment, the period for which it is expected to
continue or if a fixed term, the date it will end
(m) Job title or brief description of the work
(n) Place or places of work
(o) Particulars of any collective agreements which directly affect the terms and conditions
of employment
(p) Where employees are required to work outside the UK for a period of more than one
month, the period of such work, currency in which the payment is made, benefits
provided and terms relating to the return to the UK
(q) Details of disciplinary and dismissal rules and grievance procedures (ERA 1996 s.3)- to
avoid the procedures becoming contractual in nature, the s.1 statement should make it
clear they are not.
(r) Whether a contracting out certificate is in force (under pensions schemes act 1993).
Although a statement must be given to the employee, it may refer him to a document that is
reasonably accessible and which contains full details of the terms relating to pension schemes
and dismissal and disciplinary procedures and grievance procedures (ERA 1996, ss2(2) and
3(1)(aa).
Any changes in the terms of employment must be notified by the employer within 1
month of the change and must be informed in writing under s.4
Stefanko v Maritime Hotel- the statement under s.1 must be given even if the employment ends
prior to the two month period of employment required by s.2(6) ERA 1996.
Exceptions to s.1 page • Written contracts- there is no need for separate s.1 statement if the written contract
34 contains all of the relevant terms under s.1- under s.7
Implied terms in a • Pay wages and provide work
contract page 35-40 • Indemnify employee for costs incurred in the course of their work- re Famatina
• Reasonable care of the employees safety and working conditions
• Duty of mutual trust and confidence- act in a manner that upholds the relationship of
mutual trust and confidence between the employee and employer
Duty of mutual trust and confidence:
Breach of this implied term is automatically repudiatory- Morrow v Safeway stores
o Unjustified imposition of a final written warning: Stanley Cole v Sheridan
o Serious breach of employer’s failure to make reasonable adjustment: Greenhof v
Barnsley Metropolitan BC
o Use of foul and abusive language
o Raising performance concerns when the employee was off sick due to mental
health issues- Private Medicine Intermediaries Ltd v Hodkinson
• Duty to notify on termination without notice (societie generale v geys) employer must
notify the employee in clear terms that the contract has ended
