Contract and Employment law CONTRACT OF EMPLOYMENT

What is the contract of employment The importance of the employment contract The distinction b/n an employee and an independent contractor; Tests used by the courts/tribunals to interpreter this distinction; The status of special categories of worker Contents of the employment contract – express and implied terms, terms implied by statute;

What is the contract of employment The right to a written statement – s 1 of the ERA 1996; Restraint of trade clauses; Qualifying for employment rights – continuity; Changing terms of employment Flexible working arrangements;

Contract of employment Contract of employment and contract of self-employment – fundamental importance Only employees qualify for employment rights – unfair dismissal, redundancy payments, minimum notice on termination etc. Employees – contract of employment or contract of service Self-employed persons (independent contractors )– contract for services

Types of contract Full - time contract Part-time contract Fixed-term contracts Regulations (Prevention of Less Favourable Treatment) 2000 and 2002 under the ERA 2002 to prevent employees

The distinction b/n an employee and an independent contractor Courts and tribunals may have to decide; Tests applied; control test integration/organisation test multiple test

Who is an employee? - statutes Section 296 of the Trade Union & Labour Relations (Consolidation) Act 1992 – ‘an individual who works or seeks to work …under a contract of employment’… or under ‘ any other contract whereby he undertakes to do or perform personally any work or service for another party…’ Section 295(1) of the 1992 Act and s 230(1) of the ERA 1996 (limited guidance in the legislation) – ‘an individual who has entered into or works under a contract of employment’ Section 230(2) in this Act ’contract of employment’ means a contract of service or apprenticeship, where express or implied, and (if it is express) whether oral or in writing.

Tests developed through case law for determining the employee’s status Control test – does the person who is to be regarded as the employer control the employee or servant? Control extends to not just what the employee does, but how it is done If the answer is in the affirmative – there is employer/employee relationship Independent contractor – might be told what to do, but not how to do the work One problem – interpreted strictly it results in skilled and professional people

Integration test- counters the deficiencies of the control test The question to be asked is – how far is the servant/employee integrated into the employer’s business Fully integrated into the employer’s business- Whittaker v Minister of Pensions and National Insurance (1967) Employer could avoid tax and national insurance provisions, liability for accidents

Multiple test-much wider The servant agrees that, in consideration of a wage or other remuneration, he or she will provide his or her own work and skill in the performance of services; He or she agrees expressly or impliedly, that in the performance of that services, he or she will be subject to the other’s control in a sufficient degree by the employer; The other provisions of the contract are consistent with its being a contract of service;

Multiple test – wide application Proved to be most adaptable; Control is always to be considered, but not as a sole determining factor; Market Investigations Ltd v Minister of Social Security (1969); Continuous to be flexible to the changes in the labour environment (casual or seasonal workers); “Mutuality of obligation” – O’Kelly v Trusthouse Forte plc (1983) Wickens in Montgomery v Johnson Underwood Ltd (2001)

Multiple test – all facts to be considered The degree of control by the employer; Wear company uniforms; Obey orders; Pay all running costs; The degree to which the worker is integrated into the business; Examples; Market Investigation v Minister of Social security (1969) etc.

Atypical workers- application of the multiple test Work from home- home workers; Casual basis work – casual workers; Agency workers;

Loaning or hiring of employees The courts are reluctant to find that there has been a transfer of employment where employees are loaned or hired out , unless there is consent on the part of the employee or there is an agreement which clearly states the position in the event of liability; CASE LAW – Sime v Sutcliff Catering (1990)-exception where the court declared the employee has become an employee of the ‘second ‘employer

The impact of EU law R v Secretary of State for employment ex p Seymour-Smith (1999), ECJ; Employment Relations Act 1999 – qualifying period for unfair dismissal was reduced to one year;

Continuity: periods away from work In order to acquire employment protection rights, there should be continuity of employment Important to consider the impact of weeks away from work; Section 212 of the ERA 1996 – main legislative provision Pregnancy, childbirth, sickness or injury, temporary cessation of work or custom or practice will generally count in computing the period of employment

Formation of the contract of employment – types of terms Written statement of terms - Pt 1 of ERA 1996 – names, rate of pay, hours of work etc. The Trade Union Reform and Employment Rights Act 1993 – non-permanent employment, collective agreements etc. Specimen statement of terms of employment

Terms of the employment contract Express terms – written into the contract and agreed upon by the employer and the employee; Breach of an express term of the contract may result in the dismissal of the employee, while breach on behalf of the employer , may enable the employee to resign and bring an action for constructive dismissal;

Implied terms – the purpose is to make the contract more effective (trust and respect) Are not written into the contract; May arise out of the custom and practice of a particular industry; Have to be read subject to any express terms Standard implied terms – duties imposed on the respective parties; Breach by the employee may result in disciplinary action or even dismissal; Brach by the employer may result in legal proceedings before a tribunal;

Duties of the employer-implied terms To Pay the employee; To provide work; Treat the employee with mutual trust and confidence; Take reasonable care for the safety of the employee; Deal promptly with grievances; Reimburse the employee for any expenses properly incurred while at work; Write references;

Duties of the employee-implied terms Be ready and willing to work; Use reasonable care and skill at work; Obey reasonable and lawful orders; Take care of their employer’s property; Act in good faith – mutual respect;

Statutory terms The ‘equality clause ’equal pay’ – s 1 Equal Pay Act 1970; The right not to be unfairly dismissed – s 94 ERA 1996; The right to be given a copy of disciplinary and grievances procedures implied by s 30 of the ERA 2002; Various provisions – s 203 of ERA 1996;