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Express terms
Express terms are those terms that have been specifically agreed by the employer and employee, whether or not in writing. An express term can usually only be overridden if it attempts to take away a statutory right. For example, an express term saying that a worker is entitled to two weeks’ holiday would be overridden by the Working Time Regulations 1998, which give a right to 5.6 weeks’ holiday (see Chapter 4: Holidays). If an express term is clear and unambiguous, a tribunal will not generally imply a term that contradicts it (see below: Implied terms). However, an express term will sometimes be subject to an implied term. For example, an express obligation to relocate at the request of the employer is likely to be subject to an implied term requiring the employer to give reasonable notice of the request (See Chapter 11: Redundancy).
If a contract term is ambiguous, a court can look at evidence of a clearly established practice to interpret it. In Dunlop Tyres v Blows ([2001] IRLR 629), employees successfully argued that they were entitled to triple pay on bank holidays, despite a written agreement that suggested they should receive only double time. This was because the practice of paying triple time had operated for more than 30 years and continued after the new agreement was introduced. The Court of Appeal said this made the term ambiguous, and it could therefore take account of what had happened in practice to decide what employees were entitled to.
In Fontana v Fabio (EAT/140/01), a contractual term that obliged the employer to pay pension contributions but did not specify the amount was held to be too unclear to enforce. There was no way of assessing what might be a reasonable amount, since different employers pay different levels of contributions. Furthermore, the EAT noted that the employee had never suggested to the employer what he thought might be a reasonable contribution.
More encouragingly, in Dresdner Kleinwort Limited v Atrill [2013] EWCA Civ 394, the Court of Appeal rejected an argument that a promise to create a guaranteed bonus pool was too uncertain because it did not explain in detail how the pool was to be divided up among individual employees.
Private health insurance, where available, is almost always an express term (Marlow v East Thames Housing Group ([2002] IRLR 798).
The more serious the consequences for an employee of breaking a contract term, especially a contract term governing behaviour beyond the workplace, the more onerous the obligation on the employer to spell out the meaning of the contract term and the consequences of breach:
Mr Smith, a practising Christian, was demoted from his job as manager at a housing trust after speculating on his Facebook wall that gay marriage was a “step too far”. He was writing at the weekend in his own home. The Trust argued that it was entitled to demote Smith because his actions were a breach of policies forming part of the employment contract, including a Code of Conduct requiring employees to be “committed to the aims of the Trust”, to “promote a positive image of the Trust” and to “act in a non-judgmental manner” and an Equal Opportunities Policy banning conduct which “may make another person feel uncomfortable, embarrassed or upset”.
The Judge concluded that the posting was not a breach of either the Code or the Policy. Since the Trust only had the contractual right to demote Smith if he was guilty of misconduct, it followed that his demotion was a breach of contract. The judge emphasised that Codes and Policies forming part of the employment contract must be objectively interpreted. The question to ask is “what would a reasonable person in the employee’s position think the words in the Code mean?”
When breaking work rules can have serious consequences such as demotion and loss of wages, those rules must state very clearly what is and is not allowed, the extent to which rules must be followed, even outside work and the consequences of breaking the rules.
Smith v Trafford Housing Trust [2012] EWHC 3221
In Wandsworth LB v D’Silva [1998] IRLR 193, the Court of Appeal ruled that the authority’s sickness absence procedure was not contractual and could therefore be changed unilaterally without causing a breach of contract.
Mobility clauses (permanent or temporary relocation) must be expressly agreed and should be drawn to the attention of the employee when the contract is entered into. They should not be hidden, for example, in a staff handbook.
The case of Autoclenz v Belcher ([2011] ICR 1157) (see facts on page 37) suggests that a tribunal can look beyond the express wording of the contract documentation at all the surrounding circumstances to discover the true nature of the contractual relationship between the parties. However, the tribunal must always start with the written contract terms, as illustrated by this recent case:
Two cabin crew were seconded to work in the UK for a subsidiary of Australian airline Quantas. Before leaving Australia, both signed new contracts. They gave evidence that when they signed the new contracts, they thought food and accommodation allowances were paid in addition to base salary, even though this was inconsistent with the wording of the signed contract. On arriving in the UK, they found themselves a lot worse off financially than they had been while working in Australia. They brought claims for unlawful deduction of wages.
The EAT decided that the contract terms clearly stated that accommodation and food allowances were part of base salary and not extra payments. In this case, nothing in the surrounding context suggested that the cabin crew should not be bound by their signatures on the written contract terms in the normal way, whether or not they read the written contract before signing it.
Quantas Cabin Crew (UK) Ltd v Lopez & Anor [2012] UKEAT/0106/12/SM