Employee’s Employment Contract Essay

Introduction

Employees get into a contract when hired by an employee, and both the employer and employee are expected to observe the terms of the contract. For instance, statutory rights and the contractual rights are essential in guiding how employee and employer relate. Statutory rights are some of the rights that are based on the laws that are passed by the Parliament to offer employees a legal right when dealing with the employer [1]. On the other hand, contractual rights are known as those rights that are provided by the formation of a valid contract. As it happens in any other form of contract, termination of the contract between must, always be done within the laws guiding employment. Termination of employment is ending the contract between the employer and employee through either mutual agreement or dismissal based on different grounds. Even though there are several instances where the employer can terminate an employee’s employment contract, the dismissal must always be in line with the statutory right and the contractual right that guide the contract.

Contract of Employment

Contract of employment is known as the agreement that is always made between employee and employer. The contract can always be entered into formally or informally, and it can be orally or in writing. Unlike in other contracts where there is only a single transaction, employment contract involves a continuing relationship, and the parties are expected to live and work together for a longer period. The term of employment is known as bilateral, as it is an agreement made by employee and employer, however, conditions of employment are usually unilateral instructions that are given by the employer. Consequently, a change regarding employment must be in line with the express or implied agreement, but it is possible for the employer to improve conditions unilaterally as it was in the case of Cadoux v Central Regional Council concerning reasonable notice. In that case, contractual rights derived from a valid are used as a guide to the employment contract. Contractual rights are only applicable when the contract is valid, and the violation is legally enforceable. On the contrary, verbal commitments made informally by the employer like in Judge v Crown Leisure Ltd, where the employer promised claimant in a party that the employee would be put on roughly similar remuneration as those of other managers. The case was held as not legally enforceable as the words were vague and could not be categorized as a contractual commitment.

Besides the contractual rights that guide employment agreement, there are the statutory rights, which are the laws made by the Parliament defining some of the rights employees have in the employment contract. Statutory terms cover all contracts of employment, and there are other created legislative provisions on statutory ‘rights' that guide employment [2]. Statutory apparatus is in most cases concerned with the law of unfair dismissal and the law of tort more than a contract of employment [3]. An employee can only obtain certain statutory rights when such an employee has been employed for certain length of time based on the right in question. Continuous employment is clearly defined in the ss 210-219 which is part of the Employment Rights Act 1996 in the Wood v York City Council. Continuity of employment is to be a statutory concept that is used for two statutory reasons, which includes taking into the account the period the employee has been employed to qualify as a statutory right [4]. Secondly, it focuses on the determination of the length employee has been in employment to be able to determine particular financial benefits. Besides, some statutory rights do not require continuous employment and most of these statutory rights include a minimum period for the termination notice, statement on the reason for dismissal, protection from any unfair dismissal among many rights.

Dismissal in Employment Contract

The general definition of dismissal is the sacking or firing of an employee by the employer against the will of the employee. In most cases, dismissal is the act of employer to terminate the employment contract without the consent of the employee. Employees who are usually dismissed have two crucial claims, which is to apply for a breach of the contract in the dismissal or the dismissal being a breach of statutory rights. When dismissal breaches statutory rights, it will require complaint of unfair dismissal or what is known as statutory redundancy payment. However, when there is a breach of contract in the dismissal, it is usually referred to as ‘wrongful dismissal [5].’ Employee have been given the right by statutes and contractual rights to a fair dismissal and therefore it is important for any claim for dismissal must be proved in the first place before looking at whether it is fair or unfair. However, the definition of dismissal varies from statutory, and the common law and therefore the distinction between ‘unfair’ and ‘wrongful’ dismissal is based on the limitations of the law of contract. The common law will allow for a claim of dismissal when there was no notice, which employee is entitled to under the contract. However, when the notice of dismissal was issued, the common law cannot take up the matter, as there is no breach of contract. On the other hand, the statutory claim will be focused on whether the dismissal decision has gone against the statutory rights of the employee, which deals with whether it was fair or unfair. Consequently, an employee can be dismissed based on the contract but in a way that breaches the statutory rights, and when the employee raises the claim for wrongful dismissal it will fail.

Multiple lawsuits concerning wrongful or unfair dismissal are always not very healthy for any organization as it taints the reputation of the business, which may hurt its competitive advantage. In that case, having proper understanding consequences of dismissal provides employers with the better opportunity to come up with more informed decisions that will not attract a negative impact to the organization. In that case, the employer is capable of taking the rightful procedure when confronted with issues such as redundancy that allow for fair and rightful dismissal. On the other hand, employees with more information concerning wrongful and unfair dismissal are more likely to remain vigilant and seek for justice when such occurs. Consequently, dismissal is one of the most important of the employment contract that both employee and employer need to understand.

Non-dismissal types of Termination

In most cases, people use the term ‘dismissal' and ‘termination' to mean the same thing when in the strict speaking the two has a different meaning. While dismissal is always an act of ending employment contract by the employer with the agreement of the employee, termination is largely a broader concept, which covers the ending of the contract by the employer, employee, and many other events. Multiple situations can result in different forms of termination, and some of the most common termination includes termination out of the agreement, the death of the employer, voluntary resignation by the employee, and frustration at work. When there is no any form of interference from the employer, the four methods of termination are referred to as non-dismissal types of termination.

Termination due to Frustration

One of the non-dismissal types of termination is frustration, which takes place when both employee and employer are not in control of a given situation that makes it impossible to go through their contract as was signed by the two parties. Frustrations can come in different ways, for instance, when an employee is sick for a longer period and is not capable of performing the contractual duty. The other instance is where the employee got into illegal actions and jailed for a considerably longer period, which inconveniences the employer. In such cases, the contract automatically terminates, and the frustrating event cannot be considered dismissal for any form of dismissal claim, whether under the statute or the common law. In fact, the law is capable of recognizing that one of the parties cannot be able to perform the contractual obligation due to sickness or being jailed. The principal of frustration is not automatic for hardship, inconvenience or the loss of material but there should be a change in the importance of the obligation.

This is illustrated in the case of FC Shepherd & Co Ltd v Jerrom 1986 [6] where an apprentice was a convict and detained after participating in a motorcycle gang war. The ruling was held that the imprisonment would easily frustrate the employment contract and the employee who was alleging frustration was not responsible for the impossibility of the employee to perform the contractual duty. It became difficult for the employee to count on the misconduct to prevent the contract from being terminated.

Termination through the Death of the Employer

The other non-dismissal type of termination is when an employer dies. Even though the same would happen when the employee dies, it can be best classified under frustration type of termination. In most cases, this case applies to private businesses that are run by sole proprietors and that the death of an employer automatically leads to the end of the firm. In that case, the employee cannot claim dismissal as it results from the unfortunate incident of death.

Termination through Resignation

Through resignation, an employee will not be considered to have been dismissed except for the case of constructive dismissal. For resignation to be considered effective in the termination of the contract, the employee must provide an ascertainable date for which it will be affected, which can be express or implied. Employers are not expected to make it difficult for employees to leave the firm when they are willing to leave. The case of Morton Sundour Fabrics Ltd v Shaw (1967) involves an employee who was told the employer that his employment would end in future when his department is closed down. An employee who later looked for another job and resigned with a duly notice went ahead to sue the employer for being dismissed. The court held that he was not dismissed, as there was any written date specifying when his work would be terminated.

Termination through Mutual Agreement

There is no dismissal when the two parties in employment contract unconditionally agree to end the contract. No single statutory right can be used to assert that it is a dismissal following the fact that those who are capable of getting into a contractual agreement can also be capable of reaching an agreement to terminate their contract and that cannot be referred to as dismissal. An excellent case that illustrates this termination is that of Birch & Humber v The University of Liverpool (1985) [7]. In the case, the university circulated to lecturing staffs asking them to volunteer and go for an early retirement scheme and promised to give those who volunteer a package, and the dates were agreed upon. Two lecturers agreed to volunteer but later on argued that they were dismissed because the university never replaced them. The decision reached was that there was a mutual agreement between them and the university, which makes it a termination and not dismissal as they claim. The other case is that of Logam Saltone v Durham County Council (1989) where an employee was under disciplinary proceedings, and it was obvious that he was going to be dismissed. However, the trade union came in on his behalf and negotiated a deal for him with the organization, and they both signed an agreement. The employee, later on, claimed for being put under duress, but it was held that he entered into a new contract with the union for which he signed willingly and as such, there was no duress, and there was no dismissal.

Dismissal Type of Termination

Constructive Dismissal

Constructive dismissal happens when an employer coerces an employee to resignation with lucrative offers or threats. Resignation should be a decision by the employee and should not be influenced by an employee either through some form of sabotage, disrespect or any other ways that may make it difficult for the employee to continue working. In the case of Hilton International Hotels (UK) Ltd v Protopapa (1990), [8] the claimant claimed frustration by her immediate superior who would reprimand her excessively before junior officers something that would undermine her position. Consequently, she reassigned and claimed for a constructive dismissal, which the court held that it was a breach of implied term and a constructive dismissal.

Dismissal without Notice

Common law requires employers to provide their employees reasonable notice. The employee can choose to retain the employee for the period stated in the notice should the employee agree. Should the employee fail to work during this period, such employee will not get salary subject to s 88 for not willing to work. When the employee agrees to work during the notice period, all the contractual benefit will be accessible to the staff [9]. According to the case of Evening Standard Co Ltd v Henderson, the employer can restrain an employee from working with the competitor within the notice period if that will result in some serious harm.

Wrongful Dismissal

This is one of the wrongful dismissals where an employer decides to dismiss the employee before the expiry of the fixed contractual term. It is only for the employer to dismiss employee to allow for the expiry of the contractual time, dismissing employee before then is a wrongful dismissal.

There is also the wrongful dismissal where employment contracted stipulated specific conditions upon which the employee can be dismissed, but the employer decided to dismiss an employee for other reasons other than the one that was stipulated in the contract. In the case McClelland v Northern Ireland General Health Service (1957) [10], the claimant who was a senior clerk for about six years was dismissed with a six-month notice when the rule was introduced forcing female employees to resign when they get married. The employee argued that it was a wrongful dismissal as the only reason for dismissal was stated as misconduct and inefficiency. While health service claimed that it was not wrongful dismissal as there was also a reasonable notice, the House of Lords held that it was a wrongful dismissal as the contracted was very specific on the possible reasons for termination and that implied reasons such as giving reasonable notice would not be justifiable.

Conclusion

Employment laws are essential to both employees and employers as they help identify pertinent issues on the employment contract. Statutory and contractual rights guide employment contract, which helps employees have a guided relationship. Statutory rights are those employee rights that are formulated by parliament whereas contractual rights are the rights that come from the validity of employment contract. One of the most controversial issues in an employment contract is on the dismissal issues, which is clearly explained in various by statutory rights or contractual rights. There are non-dismissal terminations and dismissal terminations that employees and employers need to properly understand. Information on dismissal and non-dismissal terminations help employers avoid unnecessary lawsuits that come because of wrongful and unfair dismissals and terminations. 

References

1. Selwyn, NM, and Emir, A, 2014, Selwyn's law of employment, Oxford University Press, USA.
2. Taylor, S., and Emir, A, 2015, Employment law: an introduction, Oxford University Press, USA.
3. Turner, C, 2013, Unlocking Employment Law, Routledge.
4. Upex, RV, Benny, R, & Hardy, ST, 2009, Employment law. Oxford, Oxford University Press.

Works Cited

1. Selwyn, NM, and Emir, A, 2014, Selwyn's law of employment, (Oxford University Press, USA). 361.
2. Selwyn, NM, and Emir, A, 2014, Selwyn's law of employment, Oxford University Press, USA. 362.
3. Taylor, S. and Emir, A, 2015, Employment law: an introduction. (Oxford University Press, USA). 99.
4. Selwyn, NM, and Emir, A, 2014, Selwyn's law of employment, (Oxford University Press, USA). 361.
5. Upex, RV, Benny, R, & Hardy, ST, 2009, Employment law. (Oxford, Oxford University Press). 295.
6. Turner, C, 2013, Unlocking Employment Law, (Routledge). 526.
7. Turner, C, 2013, Unlocking Employment Law, (Routledge). 531.
8. Turner, C, 2013, Unlocking Employment Law, (Routledge). 515.
9. Upex, RV, Benny, R, & Hardy, ST, 2009, Employment law. (Oxford, Oxford University Press). 293.
10. Turner, C, 2013, Unlocking Employment Law, (Routledge). 540.