The employment contract
[ch 3: page 69]The employment contract sets out the terms and conditions under which work is to be done and paid for. Employees should know what those terms are and how to enforce them.
Once an employer has offered a job and the employee has accepted it, there will be a legal contract in place, even if there is nothing in writing. If the offer is later withdrawn, the employee may be able to claim damages for breach of contract (Sarker v South Tees Acute Hospitals [1997] IRLR 328). In most cases, damages are limited to the length of notice needed to terminate the contract legally, but if the contract is for a fixed period of time and there is nothing allowing for it to be ended earlier, damages could potentially cover its whole period (Gill and others v Cape Contracts [1985] IRLR 499).
Although a verbal offer and acceptance can be binding, proving it is likely to be difficult. An offer is binding if a reasonable person would infer that the employer intended to be bound by the offer once it was accepted, whether or not this was actually the employer’s intention (Wright v Canterbury Christ Church University College [2005] EAT/0428/04/0604). There must be an intention to create legal obligations, not just moral ones.
In Jeffrey Blue v Michael Ashley [2017] EWHC 1928, the High Court gave useful guidance as to the factors likely to indicate an intention to enter into a legal contract:
While drinking heavily in a pub, Sports Direct owner Michael Ashley promised his colleague that if the share price reached £8, Ashley would pay him a £10 million bonus. Ruling that this was not a legally enforceable promise, the court identified the following factors likely to indicate whether an offer is intended to be legally binding: the informal location (in a pub), the purpose of the meeting, the nature and tone of the exchange, whether an offer makes “commercial sense”, the use of vague language, and the impressions of others present. A verbal offer can be legally enforceable, but if it is not written down (even in a follow-up email) this can suggest a lack of intention to enter into a binding legal contract.
Jeffrey Blue v Michael Ashley [2017] EWHC 1928
To enforce a contract, you need to know who your employer is. This should be stated in the written statement of employment particulars (see below).