employment contract

An employee is a person who has entered into or works under a employment contract: s 230(1): Employment Rights Act.

Employment contracts may be oral or in writing and an employer is under an obligation to provide written particulars of the employment contract within 2 months of the engagement, which includes the names of the employer and employee, the date of the commencement of the contract of service, the frequency of payments, the hours of hour, terms and conditions of holidays and sick-pay, notice period required to terminate the employment contract amongst other things. Importantly, disciplinary rules and procedures, and the business's grievance procedure must also be provided.

Whether a contract is properly characterised as an employment contract is determined by reference to the level of control exerted over not only what the employee does, but how the employee goes about it.

The greater degree of the incorporation of the person into the business, the more likely they are to be considered employees. The House of Lords held in Carmichael v National Power plc that employees provide their own work and skill in return for a wages and emoluments, they are under a sufficient degree of control by the employer and the contract itself contains the usual indicia of an employment contract.

A court in determining whether an employment contract exists may also have reference to:

1.  the person paying income tax and national insurance;
2. whether there is an entitlement to holiday pay;
3. the custom and practice in the particular industry;
4. whether the person is in a position to provide a substitute.

Usually when employees are sent on secondment, they remain within the employment of the first employer, however this is not always the case.

Usage: There was some doubt as to the nature of the contract of engagement, namely whether it was an employment contract or a contract for services.

Related Words: employment; contract; grievance procedure; disciplinary rules; disciplinary procedure; contract of service; contract for services; unfair dismissal; vicarious liability.