The Contract of Employment - Summary Points

The employer must provide the new employee with the written statement of employment terms no later than two months after his/her start date and to existing employees within two months of their requesting it.

The Act in general applies to any person working under a contract of employment, apprenticeship, employed through an employment agency or in the service of the state.

The Act has no application to any employment where the employee has been in the continuous service of the employer for less than 1 month.

 

The statement must include-

  • Full names of the employer and employee.
  • Address of the employer.
  • Place of work or where there is no fixed or main place of work, a statement specifying that the employee is required or permitted to work at various places.
  • Title of the job or nature of the work for which the employee is employed. A comprehensive job description should be attached.
  • Date of commencement of employment.
  • In the case of a temporary contract of employment, the expected duration or if the contract is for a fixed term, the date on which the contract expires.
  • Probation period. (Ideally 6 months outlining employers discretion to extend or to terminate employment during that period).
  • The rate or method of calculation of the employees remuneration.
  • Any terms relating to hours of work (including overtime).
  • Any terms relating to leave.
  • Pensions/Medical Scheme/Sick pay (only if applicable if sick pay is not provided this must be stated in the contract). The relevant details of the company’s Personal Retirement Savings Account (PRSA) should be included.
  • Notice of termination of the contract of employment.
  • Any collective bargaining agreements.

 

As an alternative to providing some of the details in the statement the employer may use the statement to refer employees to certain other documents containing the particulars, provided the document is accessible to the employee.

The Unfair Dismissals Acts 1977-2005 requires an employer to set out the procedures relating to Dismissal.  This must be given in writing to each employee not later than 28 days after entering into a contract of employment.  Moreover, the Unfair Dismissals Act lays the burden on the Employer to provide clear evidence justifying his actions if any staff member alleges Unfair Dismissal (see section 9 “Termination of Employment”).

 

Writing a Contract

The introduction of a written agreement or contract for new employees may raise certain difficulties in some firms, particularly as regards any new terms and conditions of employment and existing industrial relations practice.  In such cases, the Company is advised to state clearly that agreement on basic terms and conditions and dismissal procedures is legally necessary, and that the main purpose of the legislation is to increase the protection of employees themselves.  However, the subject covered and the amount of detail in such agreements or contracts, and even their use at all in certain circumstances, will depend ultimately on the overall industrial relations climate in the Company.

A practical illustration of such a document containing the prescribed information is given on Page 6 in this section.

Contracts for a Fixed Term or Specified Purpose Contracts:
  • Such contracts must be in writing and must be signed by both the employer and employee.
  • The duration of the contract/specific purpose must be clearly stated.
  • A clause, such as the one below, which states that the provision of the Unfair Dismissal Act shall not apply when the contract expires, must be included in the written contract.

"As this is a fixed term/specific purpose contract, the provision of the Unfair           Dismissal Act, 1977 - 2005, shall not apply to a dismissal consisting solely of the expiry of this contract "cessation of the purpose of this contract".

 

This must be incorporated into a fixed term or specified purpose contract.

 

Perpetual renewal of fixed term contracts upon expiry will result in all the successive contracts as being regarded as one continuous contract and will not be protected by the above clause.

A clause excluding the terms of the Unfair Dismissal Act in a permanent employee's contract has no effect.

NOTE:  Employers should note that the use of successive Contracts of

Employment for periods of less than 12 months, in order to avoid the impact of the Unfair Dismissals Acts, are made ineffective by the Anti-Abuse provision of the 1993 Unfair Dismissals Act.  Where a person is re-employed within three months of a contract - all service will be deemed continuous.

You should also note that the perpetual renewal of fixed term contracts may be in breach of legislation. (See “Fixed Term Employment” page 26 in this section).

 

Employees required to work outside the state

Where an employee is required to work outside the State for a period of not less than one month, the employer is obliged to add certain particulars to the written statement and to provide the statement prior to the employee’s departure.

Particulars may include-

  • The period of employment outside the state.
  • The currency in which the employee is to be remunerated in respect of that period.
  • Any benefits in cash or kind for the employee attendant on the employment outside the state.
  • The terms and conditions, where appropriate, governing the employee repatriation.

Changing the Contract

A contract of employment need not be a fixed agreement and may be altered by several means. Change can be brought about by:

-           Legislation

-           Agreement between the employer and the individual employee concerned

-           Agreement between the employer and staff representatives

-           National Agreement.

Any changes in the terms of employment must be notified to the employee, in writing, as soon as possible and not later than one month after the change has come about.

Records

A contract may be implied or expressed either orally or in writing.  It is advisable to ensure that the contract be expressed in writing, signed and dated.  The employer must keep a copy of the written statement for the duration of an employee’s employment and for 1 year thereafter.

Termination of Contract

There are a number of circumstances whereby a contract may be terminated.

  • The employee resigns from the employment and this terminates the contract.
  • A contract of employment is terminated either by the employer dismissing the employee for disciplinary or other reasons including gross misconduct, or the employee leaves the company referring to the work environment they have to work in, claiming they have no option but to resign. The latter is referred to as constructive dismissal.
  • End of fixed term/specified contract.
  • End of overseas assignment.

 

The Formation of Contracts

In all contracts, not just employment contracts, there are always terms.  These terms may be expressed or implied.

Expressed terms are those which are agreed between the employer and employee either written or orally such as wages, holidays, hours of work, etc.

Implied terms are the terms, which are usually not expressly agreed between parties.  These are terms implied by Common Law, Collective Bargaining Agreements or by Statute.

Common law duties of the employee

Employees have been held to have the following implied duties to their employer

  1. To give personal service. In other words, employees have a duty to be ready and willing to carry out lawful duties in which they have been contracted to do during their agreed time.  Under no circumstances can an employee tell another employee to perform their duties without the consent of their employer.  An employer cannot direct an employee to carry out any duties which is unlawful.

 

  1. To obey lawful and reasonable orders. The employee must carry out orders as long as they are reasonable and in line with what they are contracted to do.  However such orders must not place the employee in personal danger.

 

  1. To act with reasonable care and skill. Employees must perform their duties with care and carry out their duties with the skills they claim to have, diligently and efficiently.

 

  1. To be loyal to their employer’s business. Employees must act honestly and uphold the interest of their employer’s business and property, they must not accept bribery or make secret profits and disclose any activities made using the facilities of their employer.

 

  1. Maintain secrecy. Employees must not disclose confidential material obtained through the course of their work or as a result of their employment.  Neither must they exploit their employer’s trade secrets or customer contacts.  However, information may be disclosed if it is in the public interest to do so, or if it is information disclosed to someone who has a proper interest to receive it.

 

  1. To compensate their employer. Employees may be liable to repay their employer for any loss/damage occurred as a result of a wrongful act.  Should this occur the employer must ensure there is evidence of manipulation or wilful misconduct on the employee’s part.

Common Law Duties of the Employer

In the absence of any specific provisions in the contract of employment, the employer will then have the following implied obligations to an employee.

A- To provide work – Generally there is no duty towards the employer to provide work for the employee as long as the employer continues to pay the agreed wages.

Exceptions to this are as follows

  1. Where payment is by commission or on a piecework basis the employer must give the employee a reasonable opportunity to earn it.

In the case of a highly skilled worker who needs to be allowed to maintain and develop his/her skills and whose reputation depends on his/her being active in his /her work.

B- To pay wages or remuneration.

View the full document including Sample Contract of Employment here. You can also download the document below:

Download (PDF, 298KB)