Express terms of the contract of employment should always override implied terms, as the express terms are the ones which really reflect the will of the parties PDF

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Express terms of the contract of employment should always override implied terms, as the express terms are the ones which really reflect the will of the parties...

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2018 2 no question: ‘Express terms of the contract of employment should always override implied terms, as the express terms are the ones which really reflect the will of the parties.’

2017 2 no question: Explain and discuss the relationship between express and implied terms in the contract of employment.

2016 2 no question: What is the relationship between implied and express contractual terms? Should express terms always override implied terms of the contract of employment?

As Collins observes,2 implied terms can fill gaps in incomplete express contracts, help interpret express terms, and provide principles limiting the exercise of express powers and governing how the parties should behave (H. Collins, ‘Legal responses to the standard form contract of employment’ (2007) 36(1) Industrial Law Journal 2).

Introduction: Nowadays, contracts of employment are more formal than a few years ago. Especially after lessening the importance of collective bargaining. Requirement of providing written statement with particulars of employment (according to s1 Employment Rights Act 1996 (‘ERA’)) also plays an important role behind this. Nevertheless, there is still room for implied terms to make the deal effective for the efficacy of the business. The question asks to discuss and assess the role of implied and express terms in an employment contract. To answer this, I will critically analyze how, when and why laws impose implied terms over express terms. To do this I will discuss different cases which include Autocleanz, Malik v BCCI, Johnstone v Bloomsbury, NHS Trust v Chhabra, etc. and statutory rules.

Express and Implied Terms: When terms of an employment contract are written in the documents, or orally agreed or developed through the parties’ conduct then these terms are known as express terms. But, it is almost impossible and costly to include all the possible terms into the employment contract. Some events may arise which are not included in the contract. To fill in this gap, law may impliedly impose necessary terms into the contract. The view is laid down in Equitable Life Insurance v Hyman [2002] case. Implied terms can be divided into two categories:

Terms implied by facts: Courts may derive these terms from contract of employment itself to give effect to the true intention of the parties. Normally more straightforward and easy to impose since they are normally an expression of what the parties had in mind. Terms implied by laws: Regardless the intention of the parties court may impose terms on the contract to make the contract meaningfull in accordance the need of law. Without these terms contract wouldn’t construe truly and worthless for the efficacy of the business. Requirements of s.2(1) of UCTA 1997 can be marked as terms implied by law. According to Autocleanz, both parties have to be truly free to choose the terms of the contract. But, if the bargaining power of the employees are less than employer then it doesn’t reflect the true expectation of the both parties and in that case express terms are not enough and courts may impose necessary terms to protect the employees. However, terms can be implied for the benefit of both employers and employees.

Implied terms for the benefit of the employers: 1. General to right direct: Whatever stated in express contract but cout may impose implied terms according to which employers can direct their employees for the job – Lister v Romford. But, employer can’t abuse their power while directing employees. Such as in Wilson v Racher, Employer shouted to his employee and in reply employee also shouted and walked off. Court marked this as ‘constructive dismissal’ as employer created the situation by breaking the implied terms (good faith) of the contract. 2. Right of appropriation: Benefits of an employee’s performance while working an employer goes to that employer’s entity. Such as in MacDonald and Evans case CA held that employer is the copyright owner of their engineer’s lectures. 3. Not to disclose secretes: Court may impose implied terms to uphold fiduciary duties on employees for the interest of the employers even after retiring from the job. Such as from board of directors, secret service officers etc – AG v Blake [200].

Implied terms for the benefit of the employees: 1. Implied terms of good faith or mutual trust and confidence: Employee has the right to good faith, mutual trust and confidence from its employer. HL in Willson v Racher marked this approach as ‘duty of mutual respect’. According to Bank Ltd v Akhtar this implied term can override express terms of the contract of employment.

In Malik v BCCI [1997] due to corruption a bank (BCCI) declared as insolvent. Due to bad reputation of this bank, two former banker were unable to find new jobs though they were innocent. Court held that former bank broke its implied duty of mutual trust and confidence towards its employees. Tough there were no wordings about such kinds of liability for bank on their employment contract.

Here, Lord Steyn defined this in this way “without any reasonable cause an employer can’t conduct in a way which would likely to damage the relationship of trust and confidence between employer and employee’. In Malik v BCCI case, court justified the necessity of implied terms of mutual trust and confidence not to tackle fraudulent of the business rather to ensure proper functioning of the contract. In Eastwood v Madnox [2004] Lord Nichols renamed this term as “good faith”. McGaughey commented that this new term good faith carried more considerable meaning than mutual trust and confidence. SC in NHS Trust v Chhabra recognized this duty of mutual respect which employer can’t break without a good reason.

2. Rights to work for pay in normal hours: Laws may impose implied terms on employer to pay employee in normal working hours and to provide sufficient amount of works. In Devonald v Rosser, CA held that employees of a factory were entitled to get paid of minimum 28 days whereas employer dismissed them with two weeks payment due to not abability of works. 3. Safety in work place: According to section 2(1) of UCTA 1977 an employer can’t set any term in a contract to avoid liability of employee’s injury or death due to his negligence. In Johnstone v Bloomsbury case majority confirmed that statutory legal terms can impose impliedly to override expressed terms of long hours of works of the contract. Though, Leggat LJ stated in his dissenting judgment that express terms must override any implied terms just like in any commercial contract. 4. Fair process of dismissal: It is impliedly deemed that employer will follow the fair procedural before dismiss an employee – NHS Trust v Chhabra. But in this issue statutory rules are preferred than common law rules.

Most importantly, if an employer changes the terms of the contract by showing the express terms without getting consent of the employee then court will look behind the true intention of the parties about the change and if need it may impose imlied terms (factual) to override the change or void it – Wandsworth v D’Silva. The basic principle is, without both parties consent, terms of the contract can’t be changed – Rigby v Ferodo.

Conclusion: In modern era, express terms of an employment contract are the main source to judge employment releationship. Some judges argue to override implied terms by express terms. But, still, to maintain a balanced relationshio between employee and employer and to make the business effective, courts frquently have to impose implied terms to override express terms....