Employment Contract Advice:

Express duties are the terms and conditions that are explicitly stated in the document, or documents that form the employment contract. Sometimes the employment contract can be one convenient document, but it is not unusual for there to sometimes be other documents that are cross-referenced or referred to (such as employment polices of various forms and/or descriptions) and thus bring other obligations, responsibilities and duties into the relationship between the employer and the employee.

Express terms should be clear and unambiguous. Nevertheless, confusion about the meaning of some terms can lead to disputes between the employer and the employee. In situations such as these, extrinsic material can assist in the correct interpretation of vague terms, but the operation of an “entire agreement clause” can hamper this process. In this case, the law can intervene to imply terms into the contract.

The Courts have held that all contracts have general implied terms such as the duty of care, the duty to follow reasonable instructions, the duty to act in good faith, the duty to co-operate and the duty not to act in such a way as to make the other party’s discharge of their obligations impossible. In employment contracts, the law may imply terms that relate to the payment of wages, leave entitlements or notice requirements. The extent of these duties, and their specific meaning, will be assessed in the context of each individual case.

For example, some types of contracts may have a heavier duty to co-operate than others. These situations will mean that if one party has an obligation to do something under the terms of the contract and doing that thing requires some form of co-operation with the other party, that other party may have an obligation to facilitate the first party’s actions. This means that if there is no co-operation and one party fails to discharge its duty as a result, the party that should have co-operated but failed to do so may not be able to claim that the other party was in breach of the contract. This will affect termination rights.

The duty to act in good faith, similarly, will be assessed in accordance with the circumstances with each individual case. Courts have considered what good faith can be in different situations. This body of law is constantly evolving as new cases are brought to the Courts’ attention. Generally speaking, good faith can be described as acting fairly, not unconscionably or harshly, but these terms are also defined at law and their meaning depends on the particulars of each case. Clearly, this can be a very complex area to litigate in.

Furthermore, there may be specific implied duties that parties evidently had in mind when contracting, but were not expressly entered into the contract. Establishing them is a heavily evidence based exercise and it is important that an experienced legal professional, who is familiar with recent legal developments, assists in this process.

An employment contract may make reference to various policies that govern the practice of the company an employee may seek to work at. These policies may also contain important provisions that add to the rights, responsibilities and duties of employees. Generally, a policy document may not be included as part of the contract itself, however it may be publically available on the company website or at its registered office. In some cases, a policy document will form part of the employment contract.  It is important not to agree to anything without first having regard to its provisions, and if there is any uncertainty, obtaining detailed legal advice on the terms of the policy and how it may affect your rights as an employee may be essential to secure your rights.

A contract of employment may contain provisions relating to variation. These can address the method of variation, the time when variation is open to an employer, and any employee involvement in the variation procedure. If no such provision exists, the employer may not have a right to vary. Any attempt on his part to change the scope of the employment contract may constitute an act of repudiation giving rise to a liability. However, the employer and the employee do have the right to modify, change or amend any terms, conditions or warranties by mutual consent.

Termination can take various forms. Justified and unjustified termination will obviously give rise to different rights and liabilities between the employer and the employee. An unjustified termination is a termination based on a reason that is illegitimate, which means that the reason offered as the basis of termination does not actually permit the termination of employment. In this situation, the innocent party may be able to rescind the contract and prosecute its rights at law. Some of these rights may include claiming compensation, damages or reinstatement.

Ordinarily, a justified termination can be based on the expiry of the term of the contract of employment, completion of the tasks to be performed, dismissal or resignation, abandonment or mutual termination where the employer and the employee agree that the employment has come to an end.

If either party to an employment contract commits a serious or fundamental breach of a term of the contract of employment, the innocent party will likely have the right to terminate. However, what is in fact a fundamental or serious breach can be a matter in dispute all on its own. A determination on this point can only be made after the alleged breach is analysed in detail and in conjunction with the nature of the work to be performed. Laws exist that assist in this assessment, and an experienced employment solicitor will have to bear recent updates into consideration when providing employment legal advice.