CONTRACTS OF EMPLOYMENT

1. CONTRACTS OF EMPLOYMENT OBJECTIVES • to consider the role of common law in employment law • to examine the definition of ‘employee’ • to examine the nature and content of the employment relationship

2. Contract of Employment • THEMES • which group of workers should labour law aim to protect? • what role should the employment contract play, as a source of terms and conditions of employment?

3. WHY IS THE CONTRACT OF EMPLOYMENT STILL IMPORTANT? • to fill in gaps left unregulated by statute • because employment protection legislation has been drafted in reliance on contractual definitions • the role played by breach of contract in the law of industrial action • employees still look to contractual remedies as a more effective form of job protection

4. Contract 1.Historical Origins of contract of employment • The move from status to contract –and back to ‘status’? 2. Characteristics of the contract of employment Law v London Chronicle [1959] C - Consideration I - Intention A - Acceptance 0 - Offer

5. Definition of an employment contract • Who is an employee? 1. Statute: statutory definition: • S 230 ERA • S 295 TULR(c)A • An employee means an individual who has entered into or works under a contract of employment • Contract of employment means a contract of service or apprenticeship

6. 2.Definition in common law: • Tests: • Control • Integration • Economic Reality • Mutuality of obligations • Multiple test • Contextual Approach • Label applied by the parties

7. Tests 1. Control: Bramwell test: ‘a servant is a person who is a subject to the command of his master as to the manner in which he shall do his job’. Yewens v. Noakes 1880 2. Integration Test ‘A person under a contract of service does his work as an integral part of the business’. Stevenson & Jordan 1952

8. 3. Economic RealityMarket Investigations Ltd v. Minister of Social Security • control will be important, but it is not the sole determining factor • other factors are whether the worker provides his own equipment • whether he hires his own helpers • what degree of financial risk he takes • what degree of responsibility for investment and management he has, and • whether he could profit from what the judge called ‘sound management’

9. 4. Mutuality of Obligations • Cases: Nethermere Ltd v Gardiner • O’ Kelly v Trusthouse Forte Necessity to show mutuality of obligations Important in relation to atypical workers: seasonal workers, casual workers, home workers, catering workers

10. 5. The Multiple Test • Case Ready Mixed Concrete Factors • To wear the company’s uniform • Use the lorries only on a company business • Place them at the company’s disposal for a set number of hours • Obey the foreman’s orders Other factors • They had to maintain their lorries and pay the running cost • They could own more than one lorry and hire substitute drivers. • They had no set hours of meal breaks • They decided on routes and paid their own national insurance

11. 6. Contextual approach • Case Lane v. Shire Roofing Co (Oxford) • He fell off a ladder and suffered serious injuries • A real public interest in recognising the employer/ employee relationship

12. 5.The label applied by the parties • Case Ferguson v Dawson & Partners (Contractors) Ltd • Case Massey v Crown Life Assurance Co

13. Illegality • Principle: ex turpi causa non oritur actio action is not available on an illegal contract Case Tomlinson v Dick Evans ‘U’ Drive Ltd Case Salveson v Simons Case Leighton v Michael

14. SOURCES OF CONTRACTUAL TERMS • How far does the law recognise the normative effect of the different sources? • How does the law deal with conflicts between different sources?

15. SOURCES OF CONTRACTUAL TERMS • Express terms (letter of appointment, items in a staff book) • Imposed terms (minimum notice, tax, insurance, pension contribution) • Implied terms (duty of cooperation) • Terms incorporated from collective agreements

16. SOURCES OF CONTRACTUAL TERMS: IMPLIED TERMS • at common law, employees owe their employer a duty to: • obey lawful orders and instructions • co-operate with their employer and be adaptable • exercise reasonable care and skill • serve the employer faithfully and honestly, and • maintain the relationship of mutual trust and confidence in turn, employers have an obligation to: • pay wages for work performed, or for which the employee is ready to perform • provide work • take reasonable care for the safety of the employee, and • maintain the relationship of mutual trust and confidence

17. Duty of the employer • Duty to provide a safe workplace is onerous. • Wilsons & Clyde Coal Co. Ltd. v. English [1938] AC 57. • Waltons & Morse v. Dorrington [1997] IRLR 488. • Workplace stress has become an enormous issue for employers: • Intel Corporation v. Daw [2007] IRLR 355. • Majrowski v. Guy’s and St. Thomas’s NHS Trusts [2006] IRLR 695. • Dickins v. O2 plc [2008] EWCA Civ 1144; [2009] I.R.L.R. 58. • Connor v. Surrey County Council [2010] EWCA Civ 286; [2010] 3 All E.R. 905. • Veakins v. Kier Islington Ltd. [2009] EWCA Civ 1288; [2010] I.R.L.R. 132. • Provision of references is not free of risk: • Spring v. Guardian Assurance Plc. [1994] IRLR 460. • Bartholomew v. London Borough of Hackney [1999] IRLR 246. • McKie v. Swindon College [2011] EWHC (QB) 469; [2011] IRLR 575.

18. Duty of the employee • Duty of co-operation and adaptation: • Secretary of State for Employment v. ASLEF (No. 2) [1972] 2 QB 455. • Sim v. Rotherham MBC [1987] Ch. 216. • Ticehurst v. British Telecommunications Plc. [1992] IRLR 219. • Cresswell v. Board of the Inland Revenue [1984] IRLR 190. • Employee’s corollary of mutual trust and confidence? • Complicated by potential for rule books etc. to become part of the contract of employment?

19. Duty of the employee • Duty of care: • Lister v. Romford Ice & Cold Storage Ltd. [1957] AC 555. • Jones v. Manchester Corporation [1952] 2 QB 852. • Duty of fidelity: • Employees generally NOT fiduciaries. • Obligations on employees are not generally strict – seldom will the law condone heavy restrictions on employees’ activities. • Many complex IP and trusts law issues can arise.

20. Incorporation of Terms from Collective Agreements • Section 179 of TULRCA 1992: the collective agreement is presumed ‘not to have been intended by the parties to be a legally enforceable contract’. • Two functions of Collective Agreements • A) procedural: regulating relations between employer and Trade Unions • B) normative (substantive) regulating the terms of employment contract (hours of work, pay)

21. Collective Agreements How terms of collective agreements can have legal effect in employment contract? Express and Implied Incorporation • sufficient contractual intention (express) • Sufficient evidence (implied)

22. Collective Agreements • What is the position of employees who are not members of the Trade Union? In practice, the terms and conditions contained in collective agreements are normally applied uniformly across the entire workforce, to members and not members alike.

23. Collective agreements. • Less prevalence than in earlier decades. • Still important in some industries and the public sector. • Can have huge significance in some redundancy cases. • Have created some uncertainty. • Trade Union and Labour Relations (Consolidation) Act 1992, s. 179(1): A collective agreement shall be conclusively presumed not to have been intended by the parties to be a legally enforceable contract unless the agreement— (a) is in writing, and (b) contains a provision which (however expressed) states that the parties intend that the agreement shall be a legally enforceable contract.