Employment Law
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Employment Law

The Essentials

David Balaban Lewis, Malcolm Sargeant

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eBook - ePub

Employment Law

The Essentials

David Balaban Lewis, Malcolm Sargeant

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About This Book

The most up-to-date guide on UK employment law available for CIPD and HR students. Employment Law is the core textbook for the CIPD Level 7 Employment Law module. It takes the reader step-by-step through everything that they need to know, including the formation of the Contract of Employment, discrimination, health and safety in the workplace, unfair dismissal and redundancy. Easy to read and navigate, and full of case studies and useful examples that encourage deeper thinking, this fully updated 15th edition provides a thorough theoretical grounding in employment law that can be applied in practice.This new edition of Employment Law is completely up to date with the latest cases and legislation, including zero hours contracts, migrant workers' rights, shared parental leave and Brexit and provides an up-to-date analysis of anti-discrimination law, the national living wage and the 'Transfer of Undertakings (Protection of Employment) Regulations 2006' (TUPE). Online resources include a lecturer guide, powerpoint slides and extra case studies to support learning and enable students to apply the theory in practice.

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Formation of the contract of employment (1)

The sources of terms

Chapter overview

This chapter and the next one are concerned with the contract of employment and how it comes into existence. We consider the influences that contribute to establishing the contents of the contract. Express terms agreed between the employer and the employee, or the employee’s representatives, normally take precedence over all other terms. There is a statutory requirement for the employer to issue written particulars of employment to new workers at their start date. These particulars are considered in detail here, as is the influence of collective agreements, workforce agreements, works rules, and custom and practice.


After studying this chapter you will be able to:
  • understand and explain the importance of the contract of employment to the conduct of human resource management
  • advise colleagues about the status and content of written statements of employment terms and participate in their preparation
  • understand the potential impact of statutory and common law implied terms.

2.1 Contracts of employment

Apart from those of apprentices and merchant seamen, who can only be employed under written deeds and articles respectively, contracts of employment may be oral or in writing.1 A contract of employment is like any other contract in the sense that it is subject to the general principles of law. In theory this means that the parties are free to negotiate the terms and conditions that suit them so long as they remain within the constraints imposed by statute and the common law.2 In practice, the majority of the workforce do not negotiate on an individual basis. An important proportion is engaged on such terms and conditions as are laid down in currently operative collective agreements. However, these agreements are confined to the minority of employers because over two-thirds of workplaces in the UK do not have any employees covered by collective agreements.

2.1.1 Illegal contracts

One aspect of the common law which has been relied on, particularly in unfair dismissal cases, is the principle that courts will not enforce an illegal contract.3 Thus, if a person is not entitled to work in this country, any employment contract is likely to be illegal when entered into (on migrant workers see 4.8.3 below).4 Similarly, if employees receive additional payments which are not taxed, they may be debarred from exercising statutory rights on the ground that they were not employed under valid contracts of employment. However, an occasional payment by an employer to an employee without deduction of tax does not render the contract of employment unenforceable.5


Colen v Cebrian Ltd

In Colen v Cebrian Ltd6 the Court of Appeal held that when illegality is alleged, the burden of proof is on the party making the allegation to show that the contract had been entered into with the object of committing an illegal act or had been performed with that objective. If the contract was unlawful at formation or the intention was to perform it unlawfully, the contract will be unenforceable. However, if at the time of formation the contract was perfectly lawful and it was intended to be performed lawfully, the effect of some act of illegal performance is not automatically to make the contract unenforceable. If the contract is performed illegally and the person seeking to enforce it takes part in the illegality, that may render the contract unenforceable at his or her instigation. Yet not every illegal act participated in by the enforcer will have that effect. Where the enforcer has to rely on his or her own illegal action, the court will not assist. However, if he or she does not have to do so, the question is whether the method of performance and the degree of participation in the illegality is such as to make the contract illegal.

Hewcastle Catering v Ahmed

In Hewcastle Catering v Ahmed7 the employee’s involvement in a VAT fraud devised by the employer, and from which only the employer benefited, did not preclude a claim of unfair dismissal. According to the Court of Appeal, the general principle that a contract is unenforceable on grounds of illegality applies if in all the circumstances the court would appear to encourage illegal conduct. However, the defence of illegality will not succeed where the employer’s conduct in participating in the illegal contract is so reprehensible in comparison with that of the employee that it would be wrong to allow the employer to rely on its being unenforceable.

Discussion point

Is the Court of Appeal’s approach likely to benefit employees more than employers?
Subsequently, it has been accepted that if a contract has the effect of depriving HMRC of tax to which it is entitled, this does not necessarily make it unlawful: ‘There must be some form of misrepresentation, some attempt to conceal the true facts of the relationship, before the contract is rendered illegal.’8
Although a contract of employment can be entered into quite informally, because of the consequences of having an employee on the books (see Chapter 4) a considerable degree of formality is desirable.

2.2 Express terms and statutory statements

Express terms are those which are expressly stated to form part of the contract and they are binding irrespective of whether they differ from those contained in a job advertisement.9 Apart from statutorily implied terms, which cannot be undermined, express terms normally take precedence over all other sources – that is, common law implied terms and custom and practice. At the commencement of employment, the employer must supply employees with written particulars of specified key terms.10 Indeed, in Lange v Schünemann GmbH11 the CJEU indicated that Article 2(1) of Directive 91/53 (on proof of the employment relationship) obliged an employer to notify an employee of any term which must be considered an essential element of the contract.
Figure 2.1 The sources of contractual terms
An illustration shows the sources of contractual terms: Individual express terms, statutes, common-law implied terms, workforce agreements, works rules and collective agreements.


What practical and legal difficulties might arise if workers do not understand all the relevant terms and conditions at the time employment commences?

2.2.1 Statement of particulars

The following information must be given to employees individually, although in relation to the matters mentioned in items 6, 7, 9 and 15 in the list which follows, it is sufficient to make the information reasonably accessible to them by means of a document to which they are referred.12

1 The identity of the parties

Sometimes the identity of the employer can be in dispute – for example, where people are ‘hired out’ to other organisations13 or where the employer consists of a management committee running a charity.14

2 The date on which the employee’s period of continuous employment began (taking into account any employment with a previous employer which counts towards that period)

Section 211 ERA 1996 defines the meaning of ‘continuous employment’ (see Chapter 16). It begins with the day that a person starts work for an organisation, but periods spent taking part in a strike do not count towards length of service.15 The period of continuous employment is important because certain statutory rights are associated with length of service – for example, the right not to be unfairly dismissed and the right to a redunda...

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