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Blog  »  September 2013  »  The Importance of a Signed Contract of Employment - Blog
Sep 13

Posted by
Alan Kelly

The Importance of a Signed Contract of Employment

The simple fact is that every employee who works for your business must receive a written contract of employment. This is outlined in Section 3 of the Terms of Employment Act, 1994, which states “an employer shall, not later than 2 months after the commencement of an employee’s employment … give or cause to be given to the employee a statement in writing containing the following particulars of the terms of the employee’s employment”

The Importance of a Written Contract of Employment

It is important to note that every employee has a contract of employment, even where one is not given in writing. This is because implied terms and conditions can exist based on the working employment history. Thus, a custom and practice may be deemed a contractual entitlement where the employee comes to rely on that term. The difficulty with this kind of arrangement is that the employer and the employee may well have different views as to what are the implied terms and, where such views clash, difficulties in the employment relationship will no doubt arise. Accordingly, it is very important for an employer to clearly outline terms and conditions in writing to avoid any confusion or ambiguity.

In New Cityview Press Ltd. -v- Breslin (PW55/2003), a dispute arose as to what bonus arrangements would apply. The EAT found in favour of the employee stating that in order to establish “justice between the parties” a “fair, reasonable and just approach” would be to find in favour of the employee. Thus, the failure to issue a written contract outlining the bonus entitlements resulted in the employer breaching an implied custom and practice.

In Hall -v- Crowe & Dolly Heffernans (UD1288/2002) the EAT held that a contributory factor behind their decision that the employee had been unfairly dismissed was the employer’s failure to furnish the employee with a contract of employment.

The Importance of a Signed Contract of Employment

Furthermore, it is becoming increasingly important for employers to ensure that employees sign their contract. In the case of Kerry Foods -v- Donnegan (PW68/2003) a dispute arose over overtime payments. The employer argued that they had issued contracts of employment which clearly specified that employees were not entitled to overtime payments. The EAT accepted that contracts existed with these overtime terms. However, they were not satisfied that the employee had actually received the contract as there were no signed copies. Therefore, the employer could not establish that the employees were in fact aware of the overtime policy and as a result the EAT found favour of the employees. Another example is Malone -v- Dunnes Stores (UD1299/2002) where an employee claimed that she was constructively dismissed largely because she was constantly transferred between departments. The EAT, however, dismissed her claim largely due to the fact that then employer could clearly evidence that the employee’s signed contract clearly outlined that she would be required to work across all departments. Therefore, the employee did not have a case as the company had not broken her terms and conditions.

Steps for an Employer

  1. You should not simply just issue your employee with a written contract of employment; you must also take positive steps to ensure that their employees return a signed copy of that contract.
  2. Take time to ensure that the contracts of employment contain sufficient clauses to govern the working relationship and that the contract will work exactly the way it is needed to.

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Posted in Contract of employment, Employee Contracts, Employment Contract