Introduction

Minimum rights, such as the entitlement to 5.6 weeks holiday per year, are guaranteed by statute which is legislation in the form of Acts of Parliament or Regulations passed by the government. These statutory rights are derived from legislation either initiated in the UK or agreed at European Union level.

Even though terms and conditions of employment are governed by a wide range of laws, in determining an individual’s rights at work, the contract of employment is fundamental.

Specifically, in order for an individual to be able to enforce statutory rights there must first be an employment relationship — something which is principally established by examining the terms of the contract. Contractual rights, in so far as they don’t clash with minimum statutory safeguards, determine the obligations and entitlements of the employer and employee during employment, as well as in the form of restrictive covenants after employment ends. Contractual rights are enforceable by both parties, although, other than in relation to senior staff, it is mostly employees who initiate legal action in response to contractual breaches.

The law of contract is a form of common law. Common law, as opposed to law deriving from statute, refers to legal rights as they have been determined over years by the courts. Contract law has therefore always been dependent on case law for its very existence as well as for clarification of issues as they arise.

Although a contract does not have to be in writing as terms can be orally agreed, in order to be a legally binding agreement certain conditions need to be met. Chapter 1 of this booklet looks at the elements that must be present for a contract to be established.

In many cases an individual will need to have a particular type of contract to be able to access their statutory rights. Some rights are available only to “employees”, while others apply to all “workers”. Courts and tribunals have spent a significant amount of time deciding the status of individuals wishing to bring claims, and are likely to continue to do so. Some examples of their decisions are included in Chapter 2.

Although a contract of employment does not strictly-speaking have to be in writing, there are certain details that an employer must nevertheless put in writing. This is known as the requirement for a written statement, something which is not necessarily the same as a contract. The basic written details that must be provided to employees are outlined in Chapter 3.

Disputes over contractual terms are not uncommon and Chapters 4 and 5 set out the principles that determine what those terms are and the points to look for when challenging the legality of changes that an employer tries to make. The final chapters of this booklet also include information on how a contract of employment can come to an end and the legal remedies for breach of contract, including constructive dismissal. More detailed information is provided in other LRD booklets, in particular Unfair dismissal — a legal guide (2007).

This booklet is designed to help trade unionists and workers’ representatives successfully challenge unlawful changes to contracts of employment. By having an understanding of contract law, employees will not only be better informed about their rights, but also will be better equipped and more confident about the steps that can be taken to resist an employer’s attempt to undermine their contracts. Although in many situations legal action will be necessary, in other cases simply being able to demonstrate to an employer that the advice that they have received from personnel or human resources departments is wrong or that the organisation is acting unlawfully, can be sufficient to resolve the dispute.

References to case law

The system of legal precedent means that lower courts are bound by the decisions of higher courts. Accordingly, employment tribunals must follow decisions that have been made by the Employment Appeal Tribunal (EAT), which must follow those of the Court of Appeal. The Supreme Court (prior to October 2009 known as the House of Lords) is the highest court in the UK, so the principles decided here will apply to all courts and tribunals beneath it.

Breach of contract claims can also be dealt with by the civil courts — County Court or High Court (see Chapter 7 on Remedies). The County Court deals with claims of up to £15,000. Appeals from both County Court and High Court go to the Court of Appeal and then the Supreme Court.

The European Court of Justice (ECJ) deals with the interpretation of European law — although it is normally the Court of Appeal or Supreme Court that makes references, all tribunals and courts have the power to ask the ECJ for clarification of a particular issue.

Where cases have been reported in official law reports, those references are given. These will be either the Industrial Relations Law Reports (IRLR) or the Industrial Cases Reports (ICR). The full text of the decisions is published in those reports. For cases that have not been reported elsewhere, the court reference is given.

Recent cases are also published on the web and are available free as follows:

• EAT at www.employmentappeals.gov.uk;

• High Court, Court of Appeal and Supreme Court at www.bailii.org;

• ECJ at www.curia.europa.eu.