First published: September 28th 2021
Last updated: October 14th 2022
Employment contract essentials
In an ideal world, employers should review their contracts of employment on a yearly basis. However, the reality is that’s not always possible as the day-to-day running of your business leaves little time for anything else.
That’s not to say time shouldn’t be set aside to ensure your employment contracts are up to date and represent the way your business and staff work. Employment law is always evolving and if you don’t keep your contracts up to date, you could be exposing your business to unnecessary legal risk.
Below, we look at the essential elements of an employment contract and what you should do when updating yours.
What is a contract of employment?
A contract of employment is an agreement between an employer and employee that stipulates the terms and conditions of employment.
You can think of it as a set of promises that establish the legal basis of the employment relationship.
As it’s a legal agreement, there’s a clear intention that, should one party fail to keep to any of their promises, the other party may take enforcement action for breach of contract.
When must employees receive their contract of employment?
Under employment legislation, certain information must be provided to employees in writing. Under the Employment (Miscellaneous Provisions) Act, you must provide staff with five key terms of employment in writing within five days of their start date.
This law requires employers to provide employees with a five-day statement that includes the following five core terms of employment:
- The full names of the employer and employee.
- The address of the employer.
- The expected duration of the contract (where the contract is temporary or fixed-term).
- The rate or method of calculating pay and the pay reference period for the purposes of the National Minimum Wage Act 2000 (for example, a week, a fortnight, or a month).
- What the employer reasonably expects the normal length of your working day and week to be, in a normal working day and in a normal working week.
The next deadline falls two months after an employment relationship begins. Under the Terms of Employment (Information) Act, you must provide a written Statement of Main Terms of Employment within two months of employment commencing.
A Statement of Main Terms must include:
- The full names of the employer and the employee.
- The address or registered office of the employer in the State or, where appropriate, the address of the principal place of business of the employer in the State.
- The place of work or, where there’s no fixed or main place of work, a statement specifying that the employee is required or permitted to work at various places.
- The title of the job or nature of the work for which the employee is employed.
- The date of commencement of the employee’s contract of employment.
- For temporary contracts of employment, the expected duration thereof or, if the contract of employment is for a fixed term, the date on which the contract expires.
- The rate or calculation of the employee’s remuneration, the pay reference period, and that the employee may request from the employer a written statement of their average hourly rate of pay for any pay reference period.
- The length of the intervals between the times at which remuneration is paid, whether a week, a month, or any other interval.
- Any terms or conditions relating to hours of work (including overtime).
- Any terms or conditions relating to paid leave (other than paid sick leave).
- Any terms or conditions relating to incapacity for work due to sickness or injury and paid sick leave and pensions and pension schemes.
- The period of notice which the employee must give and entitled to receive.
- A reference to any collective agreements which directly affects the terms and conditions of the employee including, where the employer is not a party to such agreements, particulars of the bodies or institutions by whom they were made.
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What is the difference between express, implied and statutory terms?
Typically, an employment contract contains three different types of contractual terms. These are statutory, express, and implied terms.
Express terms
Express terms are specifically drawn to the attention of the employee. Confusingly, an express term can be included in an employment contract in writing or orally i.e., it doesn’t have to be written down to be an express term.
Implied terms
Implied terms are not written into the contract of employment or communicated to the employee. However, they may be implied into the employment relationship in a number of ways:
- Custom and practice – for example, an annual bonus may not be in the contract but if it has been paid every year for a number of years, it may be implied into the contract of employment.
- Business efficacy – for example, if a contract of employment for a delivery driver is silent on the need for the employee to have a driving licence, the term would be implied into the contract to make it workable.
- Terms implied by law – terms can be implied from various sources of law including legislation, common law and the Constitution.
Statutory terms
Some terms are inserted into a contract because the law prevents anything to the contrary. This means that if a term in the contract does not comply with a statutory minimum requirement, the statutory minimum will override the contract and render the contractual term void. Common examples include minimum notice periods and the national minimum wage.
Can employers update employment contracts unilaterally?
Updating an employment contract should be a two-sided exercise. It’s important to notify an employee of any change to their contract unless that change arises from a legislative update, administrative provisions, or collective agreements referred to in the contract.
To legitimately add, remove, or make any changes to the terms of an employee’s contract, it’s best to first receive agreement from the employee in writing.
If you want to change either an express term or an implied term, without employee consent, the question then becomes one of reasonableness. For instance, was it reasonable for you to request the change and was it reasonable for the employee to refuse the change?
So, even in situations where an employee hasn’t agreed to a change to their employment contract, it may be possible for you to implement a change where the employee’s refusal was unreasonable.
Need expert guidance before reviewing your employment contracts?
If you need help reviewing your contracts of employment in Ireland, contact one of our HR experts for immediate support on 0818 923 923.
Still have questions?
If you need help reviewing your contracts of employment in Ireland, one of our HR experts will be happy to provide you with immediate and 24/7 HR support. Call now on 1800 719 216.
