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The Employment Contract

2 Common Myths About Employment Contracts

Employment Contract

These are easy mistakes to make, you know.

But I regularly come across two very common misunderstandings about contracts of employment.

  1. “I don’t have a contract”

One of the first questions I ask anyone who seeks my advice is, “send me a copy of your contract”. And often the reply is along the lines of: “I have been working there for 5/10/15 years but don’t have one”.

What this person means is that they don’t have a written contract or written statement of their terms of employment.

This does not mean, of course, that they don’t have a contract. Because they most certainly do.

They have shown up at the workplace, carried out a role or tasks requested by the employer, abided by the rules and regulations in the workplace, followed reasonable directions, showed up when rostered, and got paid by the employer.

That course of conduct between the parties-employer and employee-over a number of years is the contract of employment.

Simply because the terms and conditions of employment have not been committed to writing does not mean there is none in existence.

There is, but just not in written format.

When you buy a bus or train ticket you almost certainly will not have a written contract, but a contract does come into existence, nevertheless.

  1. “I never signed the contract my employer gave me so I’m not bound by its terms”

Just because an employee does not sign a written contract or statement of terms and conditions of employment does not mean that they are not bound by the terms and conditions contained in it.

Many perfectly valid, enforceable contracts are made without the need for a signed, written agreement.

Unless the employee has made known his objection to a particular term(s), notwithstanding the fact that the does not sign the written contract, he is almost certainly bound by the terms and conditions.

Because he has performed the contract over a period of time, and not raised any objections, it can be reasonably assumed that there is a valid, binding contract in place.

So, if that contract provides, for example, for a notice period on termination of 1 month from the employee, and the employee has performed all other terms and conditions of the contract over a period of time, then it is a term of the contract that the employee provide one month’s notice of his intention to leave.

Not doing so will leave him open to being sued by the employer for damages for breach of contract.

In these circumstances there is nothing preventing the parties from agreeing to a lesser period, that is the parties can agree to change it.

But one party on his own cannot change it unilaterally.

Takeaways

If you are an employer you are obliged to give a written statement of certain terms and conditions to the employee within 2 months of starting. You cannot force him to sign this statement, however, and it’s not absolutely necessary as he will be bound by it provided he performs it without objection.

If you are an employee the mere fact that you don’t have a written statement of terms of employment doesn’t mean you don’t have a contract; you do.