Terms of the Employment Contract and Conditions of Employment

• Pages: 109-133

CHAPTER 4

TERMS OF THE EMPLOYMENT CONTRACT

AND CONDITIONS OF EMPLOYMENT

SOURCES OF EMPLOYMENT CONTRACT TERMS

The rights and obligations of the parties under the employment contract are called terms.

These may be outlined by the parties in the contract, mandated by legislation, incorporated

by the collective agreement or included by custom and practice. In appropriate circumstances,

terms may also be implied by the courts or tribunals.

It is important to establish from the outset that ‘express terms’ in the employment contract

context refers to the terms directly discoverable by word or act rather than the fact that they

have been reduced to a written statement or contract document. At common law there is no

requirement that contractual terms be in writing; orally communicated terms may be equally

binding.

1 However, empirically, a written contract provides the best indication of the express

terms that have been mutually agreed by the parties and, where necessary, is the best proof of

the contours of the employment relationship.

2

It is common practice to include express terms in the employment contract in respect of

the duties to be carried out by the employee, the length of the contract, and the quantum of

remuneration. As with all contracts, the parties are free to negotiate the obligations and

benefi ts to be had once they are not restricted by statute or public policy, and these will vary

depending on whether the employment contract is temporary, for a fi xed term, has renewable

terms or is of an indefi nite duration.

EXPRESS TERMS IN THE BODY OF THE CONTRACT

The employment contract negotiating process is often characterised by standard form agree-

ments which consist of non-negotiable terms that derive from extrinsic sources; in particular,

legislation, collective labour agreements, and custom and practice. Although this may seem to

operate as a fetter on the freedom to contract, the underlying policy objectives are invariably

conceived to protect the employee’s interest as the perceived weaker negotiating party or, in

any event, to support the maintenance of harmonious employment relations. Other important

documents that have an impact on the employment relationship are written and oral commu-

nications exchanged before, during and after the signing of the contract, employee handbooks,

disciplinary codes, and notice boards.

3 It is a question of fact to be determined by the court or

tribunal whether it was the intention of the parties to be bound by these types of documents

where they have not been deliberately incorporated into the employment contract.

4 Courts

1 See Judge v Crown Leisure Ltd [2005] IRLR 823.

2 Nelson v BBC [1977] IRLR 148 and Deeley v British Rail Engineering Ltd [1980] IRLR 147.

3 See Dryden v Greater Glasgow Health Board [1992] IRLR 469 where the employer introduced a non- smoking

ban. Also included in this genus are newsletters, journals and policy/mission statements produced by the

employer. See the case of Grant v South West Trains Ltd [1998] IRLR 206 which considered a company

policy infl uenced by sexual orientation discrimination.

4 See Cadoux v Central Regional Council [1986] IRLR 131; Robertson v British Gas [1983] ICR 351.

110 Commonwealth Caribbean Employment and Labour Law

and tribunals have shown more of a willingness to do so where the employment contract makes

reference to the document or it is attached to the employment contract itself.

5

Once mutual agreement in respect of an offer, an acceptance and valuable consideration

has been established, any variation of the express terms requires reciprocity. In Banking Insurance

and General Workers’ Union v Guardsman Security Services Limited 6 the Industrial Court of Trinidad and

Tobago denounced the unilateral modifi cation by the employer of the terms of the employment

contract. The court further espoused that while in its opinion the employer’s act of offering the

employee a lower position, fewer days’ work and reduced salary was harsh and oppressive, it

was prepared to take into account the fact that the employee did not come to the court with

clean hands when determining an appropriate award. In contrast, in Keith v Ruffi n’s Crystal Palace

Hotel Corporation Limited (d/b/a Wyndham Nassau Resort and Crystal Palace Casino) 7 the court deter-

mined that the parties were bound by a promissory note that had been mutually agreed in

respect of the termination of the employment contract, albeit that the promissory note did not

form part of the employment contract. In particular, the promissory note did not provide for

deductions for bank holiday so no payments were made under this head.

Verbal variation of a written contract of employment is likely to be deemed a breach. In

Ocean Properties (Bahamas) Ltd. (C.O.B. Pirates Cove Holiday Inn) v Nairn 8 the court considered the

validity of an oral amendment to the employment contract which stated inter alia ‘The above

terms and conditions are in the main the more important and signifi cant terms of your employ-

ment. Other terms of employment not stated herein will continue while you are employed at

the discretion of the senior management of the company.’ The employee claimed that the

written employment contract had been supplemented by an oral term to give benefi ts consist-

ing of room, food, beverage and laundry; two months’ notice of termination for every year of

service as senior management; and a bonus of 8 per cent for the whole of the period of notice

to which she was entitled. The employee brought an action for breach of the oral amendment

when the employer purported to terminate the employment contract in accordance with the

written terms thereof which stated ‘Either party may terminate this contract by giving the other

party three (3) months’ notice in writing. The Employer reserves the right to pay salary in lieu

of notice. If any act of dishonesty or violence is committed, the Employer reserves the right to

terminate summarily without pay.’ Although the tribunal at fi rst instance found in favour of the

employee, the Bahamian Court of Appeal set it aside, ruling that there was no basis for the

award of the tribunal or its decision that the respondent had been wrongfully dismissed.

EXPRESS TERMS MANDATED BY LEGISLATION

Most written contracts contain express terms in relation to the duties to be performed, the

duration of the contract and the remuneration to be paid for services rendered. In some

Commonwealth Caribbean jurisdictions, legislative provision has been made for written

particulars of employment that must be included in the contract of service. This has the distinct

5 English courts have demonstrated restraint by concluding in Robertson v British Gas Corporation [1983]

IRLR 302 that a letter of appointment, not the statutory statement of terms, constitutes the contract of

employment. Contrast the decision of Jowitt v Pioneer Technology (UK) Ltd [2003] IRLR 356 where the

court declined to treat the terms of an insurance policy as incorporated into the contract of employment,

neither direct nor indirectly, on the premise that the company handbook, which was incorporated into

the employee’s contract of employment, made reference to compensation for illness or disability.

6 TD No. 113 of 2007 (unreported) delivered July 30, 2009 [TT 2009 IC 54].

7 COM/LAB 26 of 2005 (unreported) delivered June 30, 2008 [BS 2008 SC 59].

8 Civil Appeal No. 2 of 1992 (unreported) delivered October 21, 1994 [BS 1994 CA 15].