Other documents may provide evidence of the contract - for example, the job description, correspondence, collective agreements or company policies if they are in the nature of contractual terms. It is advisable to make clear what is and is not considered to be of contractual status.
Custom and practice in your company can become part of the contract. For example, if employees come to have 'reasonable' expectations of receiving a benefit, an Employment Tribunal or court is likely to interpret it as a contractual entitlement.
All contracts also include implied terms, whether written or not. Examples are:
- your obligation to provide a secure, safe and healthy working environment;
- mutual obligations not to do anything that might undermine the relationship of mutual 'trust and confidence' between you and the employee;
- the employee's obligation to serve you honestly and faithfully, obey your reasonable instructions and work with due diligence, skill and care;
- the employee's obligation not to undermine your business.
The High Court has recently opened the way for creation of a new implied term, by allowing a case to go forward under which an employee is claiming that his former employers were in breach of a specific (though implied) duty of co-operation, as well as a general (though implied) duty to maintain trust and confidence, by dismissing him shortly before he became entitled to a substantial bonus.
In another case the Scottish Court of Session (equivalent to the Court of Appeal) has refused to allow an employer to rely on an 'implied term' permitting them to give payment in lieu of notice to an employee who was in line for a substantial bonus if he stayed long enough. Any employer who wants to be able to offer pay in lieu, the Court said, must spell it out in the contract. As a general rule the courts have been reluctant to penalise employers for refusing to pay bonuses when employees are dismissed, so these cases potentially mark a significant change.
Employees also have statutory rights, such as the right to a minimum period of notice, protection against discrimination, the right to be (or not to be) a member of a trades union, and rights under working time and minimum wage legislation. The employment contract cannot usually override these statutory rights.
