Contracts of Employment

Does a Contract of Employment have to be in writing?

A contract of employment does not need to be in writing. It can be verbal or written. However, an employee or a worker is entitled at the very least to a ‘written statement of particulars’ of the terms of their employment from the first working day. The written statement of particulars is not a contract as such, but it sets out the essential elements of your employment (and so can still be legally binding.) The core particulars which need to be included are:

  • Your job title.
  • Date of commencement of employment.
  • Pay and any work-related benefits
  • Specific days and hours of work (and if variable, sufficient details of how hours may vary).
  • Holidays.
  • Place of work.
  • Details of any probationary period.
  • Details of any training that is being provided.

Can your Employer change the terms of your Contract of Employment?

It is difficult for an employer to change the terms of employment without your consent. Such consent may be verbal or in writing or it may even be implied from the fact that you continued to work on the new terms for a significant period of time whilst being aware of the change that has taken place. But in some contracts of employment, your employer may have expressly reserved the right to unilaterally vary the terms of the contract. The Courts have indicated thata strict and narrow approach should be taken in the interpretation of such provision. The contract of employment should therefore provide the power to unilaterally alter the terms of the contract in clear and unambiguous words. As long as this is the case, your employer would then lay themselves open to a Breach of Contract claim if it sought to vary or introduce new terms which would affect your fundamental rights under your contract. If your employer, for example, sought to reduce your pay or insisted that you took on an alternative job role or responsibilities that was not within the remit of your contract, this can give rise to a claim for Constructive Dismissal. Such a claim is only likely to be successful if you can show that the changes to your contract of employment were significant and fundamental as well as unacceptable to you.

If you do not accept the new change of terms, your employer may decide to dismiss you and offer the employment again on completely new terms. There is a big ris here, however,because your employer would be laying itself open to a claim for Breach of Contract or Unfair Dismissal especially where the correct procedure has not been followed. However, there is a flip side. You would be under a duty to mitigate your loss of earnings, and so whilst your employer may be initially in breach of contract, your refusal to accept a new contract may not entitle you to much in the way of damages if it is clear that you have acted unreasonably.

When will there not be a break in the continuity of employment?

There will be no loss of continuity if you resign or are dismissed during one week but you are subsequently re-engaged by the same employer before the end of the following week (ending on a Saturday).

Continuity of service will also not be broken where:

  • You resign or are dismissed on grounds of ill health but are then re-employed by the same employer within 26 weeks.
  • You are absent from work because of a temporary cessation of work.
  • The nature of your work (such as a seasonal worker or a supply teacher) means you are customarily absent from work at a particular time but are regarded as continuing in your employer’s employment during this time.
  • Where you continue to be employed for the purpose of appealing against dismissal under a contractual disciplinary procedure, in the event that you are reinstated as a result of the appeal.
  • If you are reinstated or re-engaged by your former employer or by a successor or associated employer.

Can you stay and work under protest where the terms of your contract are changed?

Yes, this is possible. If you work under protest, you can either:

  • Work under the new terms, but make it clear to your employer (for example via the grievance process) that you do not agree to the change whilst making a claim for Breach of Contract. The Court will need to consider whether your employer is in breach and may award you damages that you have suffered as a result of the breach of contract.
  • Bring a claim for Unlawful Deductions From Wages if the change to your contract of employment results in a reduction in your wages. Again, you must inform your employer that you do not agree to the changes or that you are agreeing under protest.

Are you entitled to be paid for overtime?

There is what is known as ‘mutual trust and confidence’ between employee and employer implied into every contract of employment. An employer by its conduct may cause a number of breaches of this trust and confidence, which could give rise to a claim for constructive dismissal. These include:

  • Non-payment of salary or benefits.
  • Discrimination/Harassment/Victimisation or abuse of an employee.
  • Non-consultation with an employee over relocation.

What are the remedies for a Breach of Contract claim?

If your employer is in breach of contract, you can claim damages against your employer. You can do this whilst remaining in employment. Alternatively, if the breach is fundamental to your contractual rights, you may consider that you have effectively been dismissed and put in a claim for damages for Wrongful Dismissal. Alternatively, you may be entitled to resign and claim Constructive Dismissal.

Can I be forced to repay my training fees if I give notice to leave in breach of the training agreement?

The basic position is that employers are unable to recoup training costs from employees unless there is an express right to do so in the contract of employment or the employee has consented in writing. This would need to be agreed before the training started. If there is an express written agreement, whether the employer can recoup training costs will depend on the wording of the clause and the specific circumstances of the case.

A training costs recovery clause will not be enforceable if it acts as a ‘penalty clause’. A penalty clause is one which imposes a disproportionate punishment on one party, i.e. it goes further than simply compensating your employer for genuine loss to the business caused by your early departure. For example, this might be the case if you resigned right at the end of the three-year period but were still charged 100% of the training costs, despite the fact that your employer has already received substantial benefit from the training you have received.

It is also important to consider whether the clause acts in ‘restraint of trade’. This is the case where the true purpose of the clause is to prevent the employee working for a competitor, rather than to compensate the employer for genuine training costs when it is no longer receiving the benefit of the training through the employee’s work. It can, however, be very difficult to prove that such a clause is in restraint of trade.

A clause is also more likely to be unenforceable if it is disproportionate. This would apply, for example, if the period of time you have to stay to avoid repaying anything is disproportionately long compared to the importance and the cost of the training, or if there is no ‘sliding scale’ for repayment during that period. A sliding scale might involve having to pay back 100% of the training costs if you leave within a year, 60% if you leave within 2 years and 30% if you leave within 3 years. However, the enforceability of such a clause would still depend on the specific wording and the specific circumstances of your case.

What are my rights if my job offer has been withdrawn?

It can be extremely difficult if your new employer withdraws your job offer, particularly if you have already handed in your notice at your old job, leaving you without a new one to go to. There are several reasons an employer might do this. It could be because of an unsatisfactory reference, or that they have decided to give the role to someone else, or because the business has experienced a downturn and no longer needs new staff

Your rights when a job offer is withdrawn depend on what stage you are at in the process of joining the new employer. There are broadly three categories:

  • The offer is withdrawn before you have accepted it.
  • The offer is withdrawn after you have accepted it and the offer was unconditional or conditional but you had met all the conditions.
  • The offer is withdrawn after you have accepted it, but it was a conditional offer and you have not met all the conditions.

What are my rights if a job offer is withdrawn before I accept it?

An offer of employment does not become a legal contract until you have accepted it, so your prospective employer is within their rights to withdraw the offer at any time before you accept. It is always advisable to accept a job offer (and ensure you have satisfied any conditions attached) before you hand in your notice at your current job.

What are my rights if an unconditional job offer is withdrawn after I accepted it, or a conditional job offer is withdrawn but I satisfy all the conditions?

Once you have accepted an unconditional offer of employment, there is a binding contract in existence, and the same goes for a conditional offer where you have satisfied all the conditions. If your prospective employer subsequently withdraws the offer, you may have a claim for Breach of Contract

In most cases, however, any compensation you could potentially recover will be very limited. This is usually limited to the amount of notice pay you would have received if you had started the job and been dismissed. Given that many employees have very short notice periods at the outset (particularly during any probationary period), this might only amount to a week’s pay, for example. If you don’t yet know what your notice period would have been, a Court would decide what a ‘reasonable’ notice period would have been, taking into account the role you were hired for, your seniority and any industry norms. Further, in some exceptional cases, it might be possible to recover more compensation than just your notice pay. for example, if you work in a very senior or public role, where jobs are rare and the recruitment process takes a very long time, meaning that you will almost certainly be out of work for a significant period of time. In such cases, it may be possible to recover additional losses arising from the withdrawal of the contract, as long as your prospective employer knew (or should have known) that such losses were a likely consequence of the offer being withdrawn.

What are my rights if a conditional job offer is withdrawn because I didn’t satisfy all the conditions?

You should check the terms of your offer. If the original offer was unconditional, but it was withdrawn because of an unsatisfactory reference, then you may be able to claim a breach of contract. However, if the offer was conditional and you have not satisfied all the conditions, then realistically there is not a lot you can do. For example, if a job offer is conditional on a satisfactory reference, a clear DBS check, and/or having particular qualifications, then a failure to satisfy any of the conditions will be a valid reason to withdraw the offer.

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Please contact us if you would like any further information or to discuss your contract of employment.