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There's more to a contract than words on a page

The key elements of an employment relationship - pay, hours and holidays, for example - are usually known and understood from the outset of a job.

They're typically among the 'express terms', those agreed verbally or set down in writing when a job offer is made and accepted.

And as soon as this happens, a contractual relationship begins between employer and employee, even if a written contract has not been signed or made.

Implied terms

But there may be many other kinds of terms in an employment relationship that have not been spelt out in this contractual relationship.

Firstly, there are terms that are taken for granted because they are too obvious to mention, known as 'implied terms'.

Implied terms usually involve a faithful and trustful relationship between employee and employer. For example, it is an implied term that an employee does not embezzle company funds.

Some implied terms might be assumed as necessary for the contract to work, such as a driver having the correct driving licence to carry out the job.

And others can become established over time through custom and practice, even without an explicit agreement, such as a family firm traditionally closing early on Christmas Eve.

It's not always clear when a custom becomes a contractual term - and sometimes this can only be determined by an employment tribunal.

Incorporated and statutory terms

There are also 'incorporated terms' which have been derived from other sources, such as staff handbooks, written statements or collective agreements.

Collective agreements between an employer and a trade union could apply to an individual's contract, even though he or she has had nothing to do with the arrangement.

And 'statutory terms' are determined by law. For example, equality legislation gives employees the right not to be discriminated against on certain grounds.

Get it down in writing

It's best to put a contract in writing - so that employees know what's expected of them and what they can expect in return. Ambiguities can lead to misunderstandings and misunderstandings can result in disputes.

Acas has found that simple misunderstandings over what is or what is not in a contract are one of the main causes of employment tribunal claims.

Acas publications and services

Acas has detailed information on Contracts of employment, including a step-by-step guide on how to establish a New employee's contract, and Useful templates for letters, forms and checklists.

Acas experts can visit your organisation and develop terms and conditions of employment and help you minimise the potential for disputes. See Contracts and hours: how Acas can help for more information.

Related practical training is also available on Contracts and terms and conditions, and for new employers, Employing People - A Practical Introduction.

For free, impartial advice and guidance visit Acas Helpline Online.

Visit the Acas Training Courses, Workshops and Projects area for more information.


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