Express terms

Express terms are the terms specifically agreed by the employer and employee, whether orally or in writing. An express term will usually be binding unless it tries to remove a statutory right. For example, an express term saying that a worker is entitled to just 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).

Where the meaning of an express term is clear, a tribunal will not imply a term that contradicts it. However, sometimes a clear express term can be subject to a separate implied term. For example, a clear express requirement to relocate at the request of the employer would be subject to an implied term requiring the employer not to act unreasonably when making their request, for example, by giving the employee just a few days’ notice (United Bank Limited v Akhtar [1989] UKEAT/230/88/1210) (see Chapter 11: Redundancy).

Express terms must be interpreted objectively and sensibly. What matters is how things look to an informed outsider. The subjective (i.e. private) beliefs and intentions of either party are not relevant (Anderson v London Fire & Emergency Planning Authority [2013] EWCA Civ 321). This is an important principle that both sides often misunderstand.

Contract terms must be clear and certain enough for courts to work out what the parties must have intended. However, as long as the core elements of an employer’s promise are clear, courts are generally reluctant to allow employers to escape their obligations just because some of the details are uncertain, particularly if the agreement concerns important contract terms such as wages, bonuses or redundancy payments (Dresdner Kleinwort Limited v Attrill [2013] EWCA Civ 394).

In Allen v TRW Systems [2013] UKEAT/2013/0083/12, the EAT warned tribunals to be especially wary of employers who argue that payments intended as part of the remuneration package, once promised and communicated to employees, are merely matters of policy and discretion.

Genuine ambiguity in contract terms can sometimes be resolved by looking for evidence of a clearly established practice. For example, in Dunlop Tyres v Blows [2001] IRLR 629, the language of the written contract document on overtime pay was ambiguous. As a result, employees successfully argued that they were entitled to triple time on bank holidays, not the double time suggested by the employer. In this case, the employees succeeded because the practice of paying triple time had operated for more than 30 years.

The more serious the consequences of breaking a contract term, the greater the employer’s duty to spell out clearly its meaning and the consequences of breaking it, especially if the employer wants to control behaviour outside work (Smith v Trafford Housing Trust [2012] EWHC 3221).

Mobility clauses (permanent or temporary relocation) must always be expressly agreed and drawn to the attention of the employee when the agreement is made. They should not be hidden away, for example, in a staff handbook.

“Flexibility” terms — contract terms that allow an employer to make unilateral changes to the contract — must always be express, clear and unambiguous (Security and Facilities Division v Hayes [2001] IRLR 81). They can never be implied. And they must be clearly agreed to (see page 79).

As a general rule, whenever there is any doubt about the meaning of words in a contract, those words should be interpreted against the interests of the party that insisted on including them. This is nearly always the employer.

When interpreting express contract terms, a tribunal should start with any signed written contract documents (Quantas Cabin Crew (UK) Ltd v Lopez [2012] UKEAT/0106/12/SM). However, the written contract terms are by no means conclusive. Contract documents should be interpreted taking into account the background, including events leading up to the document being signed, and what the parties had previously agreed (Hart v St Mary’s School (Colchester) Limited [2015] UKEAT/0205/14/DM). The tribunal should consider all the surrounding circumstances, including the parties’ unequal bargaining power (Autoclenz v Belcher [2011] ICR 1157).

The job of an employment tribunal is to work out what the parties must have intended to agree, and not to rewrite their agreement, however unequal the parties’ bargaining relationship (Smith v Carillion (JM) Ltd [2015] EWCA Civ 209, Consistent Group Limited v Kalwak [2009] EWCA Civ 98).