Law of the work Place - Unfair dismissal

 In the case Hall v Lorimor the court listed ten factors that were relevant when deducting whether a person was self employed or an employee. They were; the degree of control exercised over the person doing the work, equipment provided and nature of equipment when doing work, whether the person doing the work hires staff to help him, the degree of financial risk the person takes, the degree of responsibility in management, how far the person providing the services has an opportunity to profit from sound management in the performance of the task, the understanding of the intention of the parties, whether the person performing the services has set up a business like of his own, how many engagements he performs and whether they are performed for one person or a number of different people and whether the person performing the service is accessory to the business or is part and parcel of the organisation.

As stated earlier, there need be no particular formalities for a contract of employment, as it can be spoken or written. The general rule is that parties can enter into a contract of employment any way they choose, be it oral, written or by implication through the actions of the two parties. However as of August 1995, contracts for employment for a fixed period of more than one year are required to be in either probative or improbative writing followed by rei intervertus.

 When looking at the terms of a contract, there are two sources; express terms and implied terms. These care for collective agreements between the parties who have entered into a contract of employment.

 To put it basically, express terms are written and implied terms are not. Although these terms are equal in their validity, express terms will override implied terms, however implied terms can supplement the express terms.

 When the courts look at express terms, they interpret them so that they are consistent with the practice of employment. If express terms happen to be incomplete the courts will look into a wide scope of evidence so as to ascertain the best interpretation of the term.

 There are two methods where terms may be implied into a contract of employment. There are terms which arise because there are statutory provisions already in place for the purpose of all contracts of employment. These are said to be ‘implied by statute’. An example is the right not to be unfairly dismissed which is implied by the Employment Rights Act 1996, and also the equality clause which relates to equal pay which is also implied in all contracts by the Equal Pay Act 1970.

 The second method is where a term may be so obvious to the parties involved in the contract, which common law allows it to be read in as if the parties had discussed and agreed.

 The level of implication implied terms have in a contract under common law will vary, for example the health and safety of an employee is paramount and is taken to the highest levels by the employer. The level of confidentiality owed by the employee to the employer will depend on the nature of the employment involved.

 Some implied terms owe duties from one party to another where as others impose “two way” duties to an employer and employee accordingly. The most well developed “two way” term is the duty of both employee and employer to show ‘mutual trust and confidence’.

“Employers must take care not to damage their employee’s future employment prospects by harsh and oppressive behaviour or by any other form of conduct which is unacceptable today as falling below the standards set by the implied trust and confidence term”.

The previous quote by Lord Nichol shows the implied term of trust and confidence working toward the way of the employee. To show that it is a two way term the reader will look at the case of Hilton v Shiner Ltd, where the court held that if the employer had reasonable and proper cause to act in the manner he did, then even though there are adverse consequences to the employee, there is no breach of the implied duty of trust and confidence.

 To put it in a more simple term there is an obligation to both parties from one another not to act in a way that will destroy or seriously damage the trust and confidence on which the party’s employment relationship is based. To generalise, if an employer breaches his duty of trust and confidence by operating his business in a dishonest and corrupt way, an employee who was unable to secure employment in the future as a result of having worked for such an employer is entitled to damages for that loss.

Case law relating to the implied term of trust and confidence relates largely to that of the employer, and it has been included under the duties of an employer. The employers implied duties to the employee are to pay wages at the minimum wage regularly (this is usually an n expressed term) with the exception where there is no work available or where the employee is not able to work, or where the employee is not able to work. In these cases the employer is not expected to pay, unless there is an express term in the contract of employment that states otherwise.

 There is an implied duty to provide work, but this is only where the employment is based on a piecemeal or commission basis or where failure to provide work would result in a loss of earnings or reputation. If it did result in a loss of reputation, the courts will imply a duty on the part of the employer. This applies especially to those in the public eye, such as in the case of Clayton and Waller v Oliver.

 It is an employer’s duty, which is supported by statutory provision, to deal effectively with grievances. To deal properly and promptly with grievances is an implied term in a contract that the employer will afford to employees in order to obtain redress for any grievance they may have.

 To exercise care in writing references is another implied duty of the employer. It is a specific duty applied primarily for references for existing or ex-employees. If any reference given contains false or misleading information and if subsequently, this leads to any losses to the employee, the employer will be liable.

The implied duties of the employee are considerably different to that of the implied duties of the employer in contracts of employment, although statutory provisions do also exist.

 The most simple and obvious implied duty is that of work to be performed in return for remuneration.

 To obey reasonable and lawful orders is a further implied duty and refusal may result in dismissal without notice. In case law a refusal on the part of the employee to honour an express term of the contract of employment can result in a breach, the court will however examine the term so to ascertain whether it complies with the requirement of “reasonableness” in context with the facts of the case.

 If, in the work place, new methods, technology or procedures are introduced they will be viewed, if not complied with, as a breach of the implied duty of obeying reasonable and lawful orders. It is also expected that the employee will adapt new working methods as long as the necessary training or retraining is provided.

 If an employee is found to be negligent or incompetent under the implied duty to exercise reasonable care and skill in his duties, he may be in breach of contract and therefore will be liable.

 The implied duty of exercising good faith and fidelity is the most widely interpreted this practise is similar to the duty of mutual trust and confidence which requires loyalty for the employee. The employee should never disrupt the employees business, be dishonest, work for a competitor or disclose confidential information. The courts, however, do not recognise a difference between confidential information and employee know-how. Only the disclosure of confidential information amounts to breach of contract.

 In the case of Liverpool Council V Irvine, the courts used implied terms when dealing with the delict this case brought up. As implied terms don’t depend on the existence of a written source, they said, in the case of each party, that they will reflect the presumed intention of the parties and then try and fill in the gaps intentionally using two tests; business efficacy and officious bystander.

 By the courts using Business efficacy, they will use implied terms to override or influence other terms in the contract, thus the court will do its best to make it work.

 To best explain the officious bystander test, the reader will see that Luke v Essex is the case that best portrays the court using this test in full effect. This case involved a part time teacher sought to argue she had worked a sufficient number of hours to claim unfair dismissal. At the time she was contracted to work 21 hours, when in fact she only worked 19 hours. Her argument was, although she only worked 19 hours, the time that it took her to prepare should be taken into account. The employment tribunal did not agree, however the employment appeal tribunal (EAT), using the officious bystander test did agree.

 When building up a contract of employment, it can be easy to overlook the part that implied terms play in the contract itself. It would make employees and, especially the employer’s life a lot easier if all terms were written in to the contract expressly; however this would, unfortunately, be impossible. The reason for this is that it is impossible to predict every situation that may arise.

 As shown in this essay, the contribution that implied terms have on a contract, to both employee and employer are extensive. It has also been shown the degree by which implied terms are used by the courts, when interpreting certain points which cannot be agreed upon, are very flexible and powerful.

 

2,423 Words

Bibliography

• Ashton C, Fundamentals of Scots Law, 2003, Thompson/W.Green
• Selwyn NM, Law of employment, 12th Edition, Butterworth’s
• Pitt G, Employment Law, 5th Edition, Sweet/Maxwell
• Painter, Holmes & Migdal, Cases and materials on Employment Law, 2000, 3rd Edition, Blackstone Press

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• Faccenda Chicken Ltd v Fowler [1986] IRLR 691
• Hilton v shiner Ltd
• Malik v BCCI SA [1997] IRLR 462
• Hivac v Park Royal Scientific Instruments Ltd
• Bents Brewery v Hogan [1945] 2 All ER 570
• Liverpool City Council v Irvine 1970
• Lotus cars Ltd v Sutcliffe and Straiton [1982] IRLR 381 CA
• Browning v Crumlin Valley Collieries [1926] 1KB 522
• Miles v Wakefield Metropolitan District Council [1987] AC 539
• Clayton and Waller v Oliver [1930] AC 209
• WA Goold (Pearmark) Ltd v McConnell [1995 IRLR 516
• Laws v London Chronicle [1959] 1 WLR 698
• Cresswell and others v Board of Inland Revenue [1984] IRLR 190
• Janata Bank v Ahmed [1981] ICR 791
• Nelson v BBC (no.2) [1980] ICR 158
• Johnson v Lyndsay
• Stephan v Thurso Police 1876
• Stevenson, Jordan and Harrison v MacDonald And Evans 1952 ITLR 101
• Montreal v Montreal Locomotive Work 1947
• Hall v Lorimer [1994] IRLR 171

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