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.

Employment References-What You Should Know

employment-references

Are you confused about employment references?

And your obligations as an employer, or rights as an employee?

We all know the value of a good work reference.

Because what you say about yourself is one thing; however, what your former employer says may well be more influential in you obtaining a new position.

Some common questions surrounding work related references are:

  • Is the employer obliged to give one?
  • Is he obliged to give a good one, or at least be less than complete in his assessment of your performance and abilities?
  • Does the employer owe a legally enforceable obligation to anyone in relation to the reference?
  • What is the status of the commonly used “statement of employment”?

Generally, it was widely accepted that an employer was not under an obligation to provide a reference. That position is no longer as black and white as it once was due to some decisions in case law in the UK in this area.

UK case law appears to now hold that there may be circumstances where there is an implied term in the contract of employment to provide a reference on leaving at the request of a future employer. This is not universally applicable but may apply in a situation where it is standard practice in a particular industry or in hiring a certain class of employee.

Once an employer does give a reference he has a duty of care to take care in compiling the reference and if the employer fails to do so and the employee suffers economically as a result the employee may have a case in negligence.

The leading case in this area is the UK House of Lords case, Spring v Guardian Insurance [1995].

This case involved the insurance industry and there is a regulatory body in the UK, LAUTRO, which had a rule that required the provision of a reference to a prospective employer in respect of employees who wished to sell insurance products.

Even though there may not be a regulatory body in Ireland which prescriptively sets down rules that references are essential in its particular industry it is easy enough to see industries where the provision of references have become custom and practice. In this situation a term may be implied into the contract of employment that one will be provided to a prospective employer.

Duty of care

In a later UK case Bartholomew v Hackney London Borough and another [1999] the duty of care to the employee was to provide a reference that was true, fair and accurate. However, it does not have to be full and comprehensive.

An employer also has a duty of care to future employers in respect of the reference provided, as it is clearly foreseeable that a future employer will rely on what is in the reference and is entitled to do so as the previous employer should know his departing employee sufficiently well.

Remedies for the employee

An employee may have a number of remedies open to him in respect of the provision of a reference. These may include:

  • Breach of contract
  • Negligence
  • Defamation
  • European convention on human rights, 2003
  • Discrimination
  • Constitutional right to earn a living

Conclusion

There is no absolute obligation to give a reference.

Nor is there an obligation, where one is given, that it be full and comprehensive.

But what is provided must be accurate and fair, and must not mislead.

And the provider of the reference has a duty of care to the employee and the prospective employer who will rely on it.

Employers: Here’s the 1 Thing You Need to Get Right for Your Employees

small-employer-employment-contract

Are you an employer?

If you are there are many ways you can fall foul of employment legislation in Ireland.

Because there is a huge body of law covering the employment relationship, including common law, statute/legislation, regulations/directives emanating from Europe.

If I was asked what was the one thing you should do to protect yourself as an employer, my advice would be: give your employees a sound, well drafted, legally compliant contract of employment.

Let me explain: the employment relationship is based on contract.

Sure-there is plenty of legislation stipulating the minimum entitlements for employment related issues such as rest periods, holidays, payment of wages, all types of leave such as maternity leave, notice periods, part time employees’ rights, and so on.

But at the end of the day if your contract of employment is sound and drafted for your particular employment, your particular circumstances, you will avoid a lot of stress and heartache.

And most importantly you will greatly reduce the chances of success of a claim against you.

Don’t cut corners here, don’t just do a Google search and copy and paste what you find and use it in your workplace.

You could easily incorporate terms and conditions which would be completely inappropriate for your workplace.

There are a number of reasons for vital importance of your contract of employment.

The most important reason is that the more clarity there is between you and your employee the less chance of misunderstanding and bad feeling, and ultimately less chance of an employment related claim or dispute.

One of the 1st things the parties should inspect closely in the event of a dispute between employee and employer is the contract: what does it say, if anything, about the issue at hand, eg the right to a bonus or annual leave, the obligation to transfer locations, the right of the employer to alter the contract, the right to be paid for overtime, etc.

It is then too late to discover that your contract does not reflect what you intended.

Written statement of certain terms of employment

Another great reason to ensure your employees are given contracts is because it is a legal obligation on the employer.

Failure to do so within two months of the start of employment will leave you open to a claim under the Terms of Employment (Information) Act, 1994.

This claim is an easy one for employees to win because it is simply a fact that you either gave a contract to the employee or not.
If you haven’t you have no defence to such a claim and you are at the mercy of the Rights Commissioner as to what he awards in compensation to the employee, which can be up to 4 weeks remuneration.

What to do now

In addition to the employment contract I would also strongly recommend that you have three policy documents drafted and distributed to your employees:

  1. A disciplinary policy/procedure
  2. A grievance policy/procedure
  3. A dignity at work policy, which deals with harassment, bullying, sexual harassment, and discrimination.

These policies, provided they are implemented in the workplace, combined with the contract of employment will ensure you are in a strong position to defend yourself against employment related claims.

But if you are to do only one thing sort out a contract of employment for your staff.

Are you an employer?

Need a quote for a contract of employment? Contact me.

We can supply you with

  1. a template contract which you will complete yourself for each employee. This would involve things like commencement date, job description/role, rate of pay, and any other specific details for the individual employee and/or
  2. individual contracts for each employee-we get all the necessary details from you for each employee and draft the contracts for you.

How Safe is Your Business From This Simple Mistake?

small-business-mistake

Imagine this.

You’ve worked hard to build up a solid base of clients in your hairdressing or beauty salon business.

It hasn’t been easy, but you began to see the fruits of your hard work, long hours, and commitment pay off around 12 months ago.

In fact, it got so busy that you had to take on another hairdresser and, after fielding applications and interviews, you took on Nigel 9 months ago.

Nigel seemed to be the perfect person for the job; he was originally from the area and had spent the last 5 years in Dublin working in one of the country’s top salons gaining valuable experience.

You agreed the main parts of his employment contract-his salary and working hours-and things have gone surprisingly smoothly. You didn’t give him a written contract because you were both happy enough and the real meat of the agreement was how much he would be paid and how many hours per week he would work, and you were agreed on this.

You noticed that he got on great with all your clients and they really liked him.

Last weekend, though, you heard some disturbing news: you were told Nigel was going to set up his own salon on the Main Street in your town. You didn’t believe it at first, but couldn’t help worrying about it because there was a nagging concern in the back of your head.

If it was true, it would not be hard to imagine pulling a lot of your clients with him.

Then you notice a friend of his wishing him well on his new venture on his Facebook page.  You can’t wait any longer and you confront Nigel and put the disturbing rumours to him.

Nigel confirms your worst fears and gives you a month’s notice.

You ring a solicitor with your questions:

  1. Can you dismiss him immediately?
  2. Do you have to give him notice? If so, how much?
  3. Will he have a case for unfair dismissal?
  4. Do you have to pay him if you terminate his employment today?
  5. Can he bring your clients with him?

You’re told that you can dismiss him and, while he is entitled to one week’s notice, he does not have the required 12 months’ service to bring a claim for unfair dismissal.

But you now quickly realise that the most serious aspect of this whole affair is Nigel setting up his new competing business on Main Street, and the danger of you losing a lot of your clients-clients you had spent years acquiring.

And the most stomach churning part of the whole affair?

You now know that if you had a written contract in place from the start of Nigel’s employment you could have protected yourself and your business with a non-compete clause.

This non-compete covenant may have only lasted for 12 months after Nigel left, and it may only apply to a limited geographical area, for example your town or County, but it would have been a huge help, wouldn’t it?

Because if Nigel had to click his heels and wait for 12 months before starting on Main Street maybe he would thought twice about quitting now; and if he couldn’t set up in your town maybe he would have started his business far enough away from you that it would have no impact on your existing clients.

The sad thing is you will never know now because there is no non-compete clause, because there is no contract.

There are plenty of risks involved in running your own business-some avoidable, some unavoidable.

Putting a written contract in place for all your employees is not expensive, and a well drafted one specifically for your needs might even help save your business.

Learn more about drafting an employment contract including a restrictive covenant here.

Are you an employer?

Need a quote for a contract of employment? Contact me.

We can supply you with

  1. a template contract which you will complete yourself for each employee. This would involve things like commencement date, job description/role, rate of pay, and any other specific details for the individual employee and/or
  2. individual contracts for each employee-we get all the necessary details from you for each employee and draft the contracts for you.

The Remarkable Difference Between Fixed Term Contacts and Teachers’ Fixed Term Contracts

If I was working on a fixed term contract, and I wasn’t a teacher, I would be really incensed.

teachers-contracts
Teachers’ fixed term contracts are different

Let me explain.

In order for a worker on a fixed term contract to be entitled to a contract of indefinite duration-similar to a permanent contract-the law states that 2 conditions must be met.

Firstly, that I have been employed on at least 2 fixed term contracts.

And secondly, that I have at least 4 years continuous employment in the position. (Source: Protection of Employees (Fixed-Term Work) Act 2003).

But that’s not the case for teachers.

Because since December, 2013 teachers only required 3 years’ continuous service to qualify for a CID (Source: Circular letter 64/2013) .

And things are about to get better.

Expert Group Recommends Big Improvement for Teachers

Because this week a report by an “expert group”, chaired by Senior Counsel Peter Ward, established under the Haddington Road agreement to look at public sector pay and productivity promised to make life even better for teachers.

One of its recommendations is that teachers become entitled to a CID after only 2 years continuous service.

So an ordinary worker who isn’t a teacher needs 4 years continuous service to qualify for a CID. A teacher currently only needs 3 years and will only need 2 years from the beginning of the 2015 school year.

And it gets better for teachers.

Because one of the ways that an employer can prevent an employee from being entitled to a CID is if he can objectively justify the non awarding of a CID. One way this objective justification could arise is if the employee was covering or filling in for someone on a career break or secondment.

But thanks to the “expert group” this barrier won’t stand in the way of teachers.

Because they recommend:

“With regard to teachers covering for others on a career break or secondment, the report recommends that these individuals should not be disqualified from entitlement to a contract of indefinite duration on that ground.”

The law surrounding the entitlement to a contract of indefinite duration has been set out in Statute since 2003 with the Protection of Employees (Fixed Term Work) Act 2003. Remarkably this law hasn’t applied to teachers since December 2013.

Is this fair?

Is it moral?

Do teachers endure such ghastly working conditions compared to other workers that this non application of the law is justified?

It would be hard to make that argument for 3 reasons:

  1. A job for life
  2. A good pension
  3. Incredible holidays.

The Minister for Education (and former teacher), Jan O’Sullivan, has agreed to implement the recommendations of the expert group.

She will hardly meet with any resistance at the cabinet table from the Taoiseach or Minister for Finance who are both former teachers.

What do you think?