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Contract of employment

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					Employment law
CONTRACT OF EMPLOYMENT
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
s. 230 of the ERA 1996 (limited
guidance in the legislation)
   (1) in this Act “employee’ means an individual who
    has entered into or works under (or where the
    employment has ceased, worked under) a contract
    of employment.

   (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
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) p 427, Business Law;
   Wickens in Montgomery v Johnson
    Underwood Ltd (2001) p. 428, Business Law
Legislation is extended to
protect part time employees
   Section 23 of ERA 1999 – broadening of the scope
    of legislative provisions;
   Working time regulations 1998;
   National minimum wage;
   Part-Time Workers (Prevention of Less Favourable
    Treatment) regulations 2000- a part time employee
    is defined as ‘one who is not identifiable as a full
    time employee’;
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;
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
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
Industrial disputes

   Any week in which an employee takes
    part in a strike does not count towards
    continuity (s.212 , ERA 1996), but
    does not brake it

   Absence due to lock-outs is treated in
    the same way
Formation of the contract of
employment

   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 – 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)
   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;

				
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posted:9/27/2012
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