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4 Employment Contract

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21 views

4 Employment Contract

dt

Uploaded by

Dejene Tsegaye
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Employment Contract

and
Employment Relationship
The Employment Contract
• Taylor (2010) explains employment contract:
– Need not be a written document/can be oral
– Contract begins when employment offer accepted
– Written agreement helps prove contract exists if contract is
challenged
• 4 Legal Questions to Establish if Contract Exists:
– Has offer of employment been made?
– Has this offer been accepted?
– Has employee agreed to perform job/employer agreed to pay
wages accordingly + acceptance of implied moral
obligations/duties therein?
– Is there an intention to create a legal relationship?
Legal Aspects of Employment Contract

• Can contain implied terms/duties enforceable at law


• Employees are also entitled to some statutory protection
– E.g. Dismissal law (largely relating to those employees with
more than 1 year’s continuous service)
– E.g. Right to statutory sick pay, maternity leave and minimum
notice periods automatic from first day of agreed employment
• Implied terms complex as terms/duties can vary from one
organization to another
– E.g. Where implied working hours (say 38.5 rather than 40) to
exist through custom and practice over time
Common Law Implied Terms (Arise Out of
Employment Contract)
• Employer obliged to: • Employee obliged to:
– Pay wages – Be willing to work
– Treat employees – Be honest
courteously – Co-operate with an
– Provide support to employer’s reasonable
aid employee do their instructions
job – Be loyal
– Reimburse expenses – Take care in doing their
incurred in doing job job/duties (i.e. not to be
– Provide safe working careless with
environment employer’s property)
Types of Written Documents to Help
Establish if Contract Exists
• Recall, a written agreement useful to prove
employment contract exists if this is challenged
• Written document(s) not the actual contract; can
be used as evidence of the contract/agreement
• 3 Types of Common Written Documents
– Offer letter and acceptance
– Written details of the terms and conditions
– Other documents explicitly incorporated into
the contract e.g. collective agreements
1. Written Offer of Employment
• Taylor (2010) explains that offer letters/documentation
vary from organization to organization and job to job
– E.g. whether terms and conditions set out in longer
detailed letter/shorter letter with standard attachments
• Written offer should at least include the following:
– Job title
– Start date
– Starting salary
– Pay date (i.e. weekly or monthly)
– Hours of work
– Any probationary or fixed-term arrangements
2. (A) Written Particulars of Employment
• Employees should be given following written information in a single
document on their main terms and conditions of employment within with
in 15 days from the conclusion of the contract (
Proclamation No. 1156/2019 article 4(7)):
– Names of employer/employee who have agreed employment
– Date the employment commenced
– Job title or brief description of the work it involves
– Amount of pay
– Dates on which pay will be paid
– Hours of work
– Holiday and holiday pay entitlements
– Place of work
• If an employee moves internally to another employer/but stays in same
parent organization, their continuity of employment is not affected i.e.
retain their full employment rights
– Written statement above should be amended to declare that such an
internal move has occurred
2. (B) Written Particulars of Employment
• Employer should also provide additional written
documentation (which can be included in the main statement
above or can be issued separately):
– Sick pay arrangements/other terms related to illness
– Notice periods for both employer and employee
– Details of any occupational pension
– Expected duration of the contract/whether temporary
– Details of any collective agreements governing terms and
conditions of employment
– Relevant disciplinary and grievance arrangements And,
– If employee to work abroad, duration of employment
abroad/payment currency/ additional allowances and
benefits
3. Incorporated Written Documents
• In addition to the main written particulars above,
employers often explicitly incorporate other
documents into their employment contracts:
– Job descriptions
– Collective agreements
– Staff handbooks
• Could also include the following:
– Disciplinary procedure
– Health and safety rules
• Documents should set out clearly/unambiguously
what is expected of the employer and employee
Specific Contractual Terms

• Fixed-term clauses
– End date must be stated for fixed-term contracts

– Employment Act 2002 limits the duration of successive fixed term


contracts to four years (unless employer can justify/explain this)
• Probationary clauses
– Where probationary period set, duration/review procedure must be
clear/be agreed by employee
• Restraint of trade clauses
– Can be an express term that employees cannot work for a
competitor business or leak business information to a competitor
business
Specific Contractual Terms
• Restrictive covenants
– Can be an express term that employees cannot take up
employment with a competitor business for a set period
after they leave their post
• Flexibility clauses
– Organizations need to be flexible to changing business
circumstances/hence may need to amend present terms and
conditions in future
– Employer could be sued for breach of contract if
employees feel imposed changes mean they are losing out
(i.e. from changes they have not agreed to) Consider also
the effect on the employment relationship
• e.g. loss of mutual trust and confidence in the
relationship?
The Employment Relationship
• The employment contract means there is an implied
relationship/duties and obligations between the
employing organization and its employees
• But, are there just two parties involved?
• Or are there sometimes others in the relationship?
– Owners and their agents (Whitley, 1992)
– Employees and their representatives (Whitley,
1992)
– What about influence/intervention of government?
– Other stakeholders?
• Who are the stakeholders in the organization you
work for/have worked for in the past?
The Employment Relationship
• Beer et al. (1984) argue that management expect from
the relationship:
– Reliable employee performance at set standards
– Employees to follow the workplace rules
– But, management often expect much more…
• Initiative, self-supervision, self-development and,
responsiveness to change
– Fair pay
– Safe working conditions
– Fair treatment
– But, that employees also expect more Security,
status, involvement, challenge, power and
responsibility

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