The contract of employment in Ireland is made up of both express terms and implied terms with the Terms of Employment (Information) Act, 1994 stipulating that certain basic information must be given to the employee in writing.
This includes the names and addresses of both employer and employee, the place of work, the title of the job, pay, any terms relating to sick pay, periods of notice and many other basic details.
Implied Terms
In every contract of employment, written or otherwise, there are 4 categories of implied terms which fall under the headings of
a) terms implied by custom/practice(depending on the industry)
b) terms implied by statute (right to redundancy, right not to be unfairly dismissed, right to notice, right not to be discriminated against as per Employment Equality Acts, right to breaks, annual leave, holidays as per Organisation of Working Time Act, 1997, protective leave including maternity leave, payment of wages as per Payment of Wages Act 1991, atypical workers such as part timers and fixed term workers protected by the Protection of Employment Acts, health and safety provisions as per Health and Safety at Work Act 2005)
c) terms implied by law (employers duty of care and employees duty of trust and confidence)
d) collective agreements in unionized employment.
Express Terms of Employment
The express terms of employment are those terms clearly agreed between the employer and employee and can be oral or in writing.
Terms of Employment (Information) Acts
The Terms of Employment (Information) Acts 1994-2001 provide that employees must be given a statement, signed by the employer, of certain of their terms and conditions of employment within 2 months of their employment.
What must be included in this statement?
- The names of the employer and employee
- The address of the employer
- The place of work (This can be a thorny issue if you need the employee to move to another location or provide geographical mobility in the course of employment and it has not been provided for in the contract of employment)
- Hours of work (this needs to be clear about shifts, overtime, work breaks, lay offs, short time, and so forth)
- The job title or nature of the work for which they are employed (Drafting this too widely can give problems when it comes to redundancy; drafting too narrowly can lead to practical, on the ground difficulties)
- The date of commencement of employment (when does employment start is an important question as most statutory entitlements will be dependent on the length of service)
- The duration of the contract and expiry date if the contract is a fixed term/temporary contract
- The rate of pay or method of calculation (the salary package and the breakdown between basic salary, commission, bonuses, allowances, and so forth should be set out)
- How often/the intervals at which pay will be paid
- Terms and conditions re paid leave (what is the position re holidays and is there extra days over and above those set down by statute in the Organization of Working Time Act,1997)
- Terms and conditions re illness/sickness or injury and pensions (what is the situation re sick pay; there is no general right to be paid while out sick but the contract can provide for it expressly or custom and practice of the industry/job can imply it but this may need to be proven if questioned)
- The period of notice obliged to be given by both parties
- If any collective agreement affects the contract
- Times of breaks/rest periods both daily and weekly
- The company’s pay reference period.
In addition to the above statutory minimum terms and conditions it is prudent and advisable for the employer to include other terms in the contract dealing with
- Short time/lay offs
- Illness pay
- Retirement age
- Time off work
- A probationary period (cannot exceed one year)
- Bullying and harassment procedures
- Grievance and disciplinary procedures (a specified disciplinary procedure should be in place and a copy of this together with the grievance procedure should be given to the employee along with the contract/letter of offer)
- Company car
- Share options
- Retirement age (should be specified by the employer)
- Any restrictions re competition and setting up against the employer in the future using trade secrets/contacts. Note that common law implies a duty of loyalty in the employment contract; common law also protects confidential information and trade secrets in the absence of an express or written term in the contract covering this area. However there is no common law barrier to soliciting for business done by the employer once the employee leaves the employment. (Restrictive covenants and termination of employment are dealt with in greater detail elsewhere on the site.)
- Email and internet use
In addition to the above, the employer must give new employees, within 28 days of starting employment, a written summary of the procedures to be used should it be necessary to dismiss them.
As an employer you need to be clear what terms and conditions are obligatory in the employment contract as a result of the Terms of Employment (Information) Acts and the additional terms and conditions which might be advisable and prudent for the employer.
Legal advice is recommended as the consequences of a badly drafted contract with an employee will be far more costly than the cost of having a properly drafted contract of employment by a legal professional.
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