I Have No Employment Contract (What are My Rights? )

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“I have no employment contract what are my rights?”

Many people assume a contract between an employer and employee must be written to be effective and enforceable, but a contract of employment will usually exist even if it is not in writing. This also means you will benefit from certain rights as an employee.

I have no employment contract – what are my rights?

All contracts contain legally binding terms and it is the responsibility of the employer to make clear which elements of the contract are the terms.

These terms can be:

  • In a written contract or a statement of employment
  • Verbally agreed by the employer and employee
  • Detailed in a handbook or an offer letter
  • Posted on a company notice board
  • Set out by law (i.e. the National Minimum Wage)
  • In collective agreements – like those between employers and trade unions
  • Implied terms – automatically in a contract even if not written down

Where ‘unwritten contracts’ exist, they are legally binding but can leave both employee and employer open to considerable uncertainty in relation to the terms agreed.

The contract will be considered to have taken effect once the employee starts work and the employee will be assumed to have accepted the employer’s terms and conditions.

If you are not in agreement with any of the proposals or terms of employment, you should make this clear to the employer before starting work that terms are still under negotiation.

What are implied contract terms?

Employees benefit from a number of implied terms which do not need to be referenced specifically in any contract to be legally enforceable.

Examples of implied terms are:

  • Employees not stealing from an employer
  • A safe and secure working environment
  • Legal requirements such paid holidays

If there is a dispute or allegation of breach of contract where there is no employment contract in place, implied terms may play a key role in the resolution.

Terms implied in fact

This relates to the parties’ intentions when they entered into the contract. A court is unlikely to imply a term purely based on it being reasonable for the term to be included in the contract instead it will use the business efficacy test and the officious bystander test to assess the validity of the term.

Only one of these tests need to be satisfied.

Terms implied by law

Terms implied by law are generally seen as a necessity for a particular type of contract and the court will assess whether the term is necessary for the relationship between both parties.

Terms implied by custom and practice

These are usually implied when dealing with a particular trade or workplace. For these terms to be binding the custom or practice must be reasonable, notorious and based on sense of legal obligation. These terms are likely to be found where custom and practice has arisen in an organisation but is not reflected in the wider industry. It can be difficult to demonstrate that both the employee and employer would be bound by this practice.

Terms implied or modified by statute

These terms do not have to be explicitly expressed as they are implied by statute – for example minimum notice period, equality terms and the national minimum wage.

Implies terms are a grey area and whilst the law infers the legal outcome in this case, it is open to interpretation. Complex cases should always be discussed with an employment solicitor.

The right to a written statement

While a written contract is not mandatory, all UK employees are entitled to receive a written statement within two months of commencing work.

This written statement must:

  • Name the employer and employee
  • Contain the job title
  • Include the start date
  • Detail the amount of pay and regularity of payment
  • Inform the employee of sick pay entitlements
  • State the hours of work
  • Detail holiday entitlement and holiday pay
  • Disclose how much notice employees are entitled to for dismissal and the notice employees must give to leave
  • Detail the job location(s)
  • Contain details of procedures around disciplinary, dismissal and grievance
  • State the occupational pension scheme options

Employees are entitled to this statement even if the job ends before they have worked two months if the intention was for it to last more than one month and they have worked for at least one month.

While the law requires a written statement to be given this does not necessarily constitute a contract of employment it is rather a While this statement of certain specified terms can be helpful when disputes over employment terms arise, they are not legally binding as the terms of an employment contract are.

What happens if a written statement is not provided?

If an employer fails to provide a written statement they may face repercussions.

Employees can make a claim to the Employment Tribunal to obtain confirmation of their employment terms and conditions. This can be particularly damaging and costly for small businesses.

An Employment Tribunal can penalise employers for non-compliance with their duties and reward the employee with up to four weeks’ pay (capped at £475 a week) unless exceptional circumstances have led to the written statement not being provided.

When a contract has only been made verbally there are obvious difficulties in establishing what the agreed terms are. This relies on the evidence for example from you and your employer, witnesses such as colleagues. Professional advice will be critical if considering your legal options.

No contract of employment – why take legal advice?

Employment contract terms can be complicated to navigate.

If you find yourself in a dispute in relation to unwritten contract terms of employment, you should seek legal advice to clarify your legal position and allow you to enforce your rights.