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Wednesday 01 March 2023

How to check your employment contract: part one

By Jo Seery

In the first of a two-part guide, employment lawyer Jo Seery explains the key principles behind employment contracts and why it’s important to check your contract carefully.

reading glasses resting on contract

It’s always good practice to a check your contract of employment before you accept a new job, or agree to a promotion or a change in role, to make sure it properly reflects what was agreed.   

The government’s Retained EU Law (Revocation and Reform) Bill, introduced in September, if enacted unchanged, will remove important EU-derived statutory employment rights, such as holidays and parental leave. This is a wake-up call to make sure that any statutory rights which could be lost are incorporated into your contract before 31 December 2023.

Why you need to check your contract

The contract is a binding agreement between you and your employer. It’s generally prudent for the terms to be set out in writing in case there is any subsequent dispute about what was agreed – especially if the terms are significant. In one case, the court rejected a claim for breach of contract where a senior employee had relied on an oral promise to maintain their pension benefits when transferring to another scheme. The court held that if the parties had intended the promise be contractual, it would have been recorded in writing.

What terms does an employment contract contain?

The terms of a contract fall into the following categories:

  • Express terms: these are terms specifically set out in the contract, such as your place of work, job title and hours of work. Express terms take precedence over implied terms.
  • Implied terms: these are terms which are so obvious that they don’t need to be expressly set out in the contract, such as the duty to provide a safe system of work and the duty of mutual trust and confidence.
  • Incorporated terms: these are not set out in the contract itself but incorporated when expressly referred to in the contract. Examples include collective agreements (such as Agenda for Change) and staff handbooks. 
  • Statutory terms: certain terms in your contract are imposed or varied by law. For example, your minimum statutory right to notice and the maximum working week of 48 hours under the 1998 Working Time Regulations will vary a non-compliant contract.

It’s rare for your contract document to contain all the terms of the contract. Agenda for Change terms and conditions will apply provided that AfC is incorporated into your contract. Usually, there will be an express clause along the lines of: “this appointment is subject to the National Terms and Conditions of Service that are agreed by the NHS Staff Council”.

If the terms of your individual contract are inconsistent with the incorporated terms, a court will consider whether the particular terms relied on are ‘apt for incorporation’ (for example, terms which apply to an individual, such as rates of pay), as well what was intended by the parties, taking into account all the circumstances and what they reasonably understood the terms to mean. In Bent and others v Central Manchester University Hospitals NHS Foundation Trust, an employment tribunal held that the trust’s pay progression policy was inconsistent with AfC and amounted to a unilateral variation of the contractual terms.

Changing the terms of your contract

It’s a fundamental principle of contract law that there terms cannot be changed without the agreement of both parties. If your employer imposes changes without your agreement, this will usually be a breach of contract.

But some changes to your contract may be allowed by an existing term. This commonly arises when your job duties are changed. Whether this amounts to a breach of contract will depend on the scope of the term. Generally, if the change is to how you do your work, for example, ‘online’ instead of ‘in person’, then this is unlikely to be held to be a breach of contract. However, if the change requires you to undertake duties outside your capabilities, a court is less likely to accept that this is allowed by the existing term.

>> In part two: Jo explains the key clauses and what to look out for when you check your contract.

  • Jo Seery is a senior employment rights solicitor at MiP’s legal advisers, Thompsons Solicitors. For more information, visit: thompsonstradeunion.law

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