CONTRACTS IN GENERAL
There are numerous issues that may have to be considered when entering into an employment contract, whether that is prior to commencing employment or your employer introducing changes during your employment.
The clauses that an employee should be aware of, raise or take advice on when negotiating the terms of an employment contract include the following:
- Restrictive Covenants
- Length of Notice
- Payment in lieu of Notice
- Liquidation damages clause
- Change of control clause
- Mobility clause
- Job title and duties
- Hours of work and overtime
- Remuneration and benefits
EMPLOYMENT CONTRACTS FOR DIRECTORS
If the employee is to be a director of the employing company (or any company within its corporate group), additional issues should be considered on which it would be preferable to take full advice from the outset. It is so much more difficult to negotiate a change once employment has commenced.
Clauses relating to share schemes, pension, bonuses, restrictive covenants, outside interests, incapacity, intellectual property and obligations on termination can be particularly significant in addition to the above.
CHANGING TERMS OF EMPLOYMENT
An employee’s terms of employment are bound to change in a number of ways during the course of their employment. For example, annual pay increases and promotion of employees are likely to constitute changes to the contract of employment. However, these types of changes will normally happen by mutual consent and are unlikely to cause any legal or practical problems for either party.
Occasionally, however, both employers and employees may wish to make changes to the contract that the other party is less happy to accept. Such changes can be made for many reasons, but generally fall into two broad categories:
1. DISCRETE CHANGES
Discrete and very specific changes to the terms of an employment contract such as changes to pay rates, bonus and commission structures, restrictive covenants, job content and the place where an employee is required to work. Such changes are usually brought about by changed economic circumstances resulting in a need to reorganise the employer’s business.
2. VARYING TERMS
Varying terms as part of a general programme of harmonisation of terms of employment across the business. Such changes are not necessarily brought about by a specific business need but the fact that there is little or no consistency in an employer’s employment contracts and a desire to move all employees onto standard terms of employment.
Such housekeeping exercises also give employers the chance to ensure that their standard contracts are:
- Legally compliant.
- Appropriate to the size and structure of the business.
- Providing a reasonable level of legal protection for the employer.
In both cases, the employer will probably need to make formal changes to some (if not all) of its contracts of employment. It has three principal options:
- To seek agreement to the changes and dismiss those who refuse to agree. The employees who are dismissed may have claims for unfair dismissal and (if the employer does not serve notice) breach of contract.
- To terminate the existing contracts of employment and offer re-engagement on the new terms. The employees may have claims for unfair dismissal and (if the employer does not serve notice) breach of contract, but the mere offer of re-engagement may mitigate their loss. In addition, there may be collective consultation obligations.
- To impose the changes and leave it to the employees to decide how to respond. This may result in claims of constructive dismissal.
Wrongful dismissal is a dismissal in breach of contract. The fairness of the dismissal does not come into play here, merely whether the dismissal was in accordance with the contract of employment.
If you have been dismissed without notice or payment in lieu of notice and/or not been paid your accrued but untaken holiday pay you will have a claim for wrongful dismissal. You will be able to claim damages for suffering loss as a result of your former employer’s breach.
The time limit for bringing a claim for breach of contract in the:
- Employment Tribunal is three months less one day from the date of the breach.
- County Court is 6 years less one day from the date of the breach.
COULD YOU CLAIM FOR BREACH OF CONTRACT?
Then please contact us on 02380 402066 or use our contact page for a free consultation