GOVT 2072

Employment Law
Lecture 3

Dr. Priya Marajh

Disclaimer
• The information provided in this presentation does not, and is not
intended to, constitute legal advice; instead, all information presented
is for general informational purposes only. If you require legal advice
with respect to any particular legal matter, you should contact your
attorney to obtain such advice.
Determining whether an
employment relationship exists
• Having established that legislation in the Commonwealth Caribbean is
focused on protecting the employee and not independent contractors
or self-employed persons, it is imperative to have an appreciation for
the manner in which tribunals and courts have made the distinction.
Determining whether an
employment relationship exists
The control test
Since Yewens v Noakes, the amount of control exercised by the employer over the
employee has been the focal point of question of whether there a exist a contract of
service.

Bramwell LJ stated that “A servant is a person subject to the command of his master
as to the manner in which he shall do his work”.

Rahim Bacchus argues that this definition was necessarily narrow to ‘maintain the
concept of the employer as someone whose authority to give commands was based
in part on his superiority of skill in performing the particular task or at least in
directing how the job was to be done’.
Determining whether an
employment relationship exists
• Later cases illustrated the inadequacy of the control test in particular
because there are many contracts of service where the employer
cannot be said to exercise control over the manner in which work is
done. In the words of Professor Kehan- Freund: “To say of the captain
of a ship, the pilot of airplane, the driver of a railway engine, of a
motor vehicle or of a crane that the employer “controls” the
performance of his work is unrealistic and almost grotesque.
Determining whether an
employment relationship exists
• It is for this reason that the near total reliance on the test was
abandoned and a search commenced for a more comprehensive base
to determine employee status.
Determining whether an
employment relationship exists
• Lord Denning offered a more integrated approach in Stevenson
Jordan Harrison Limited v MacDonald and Evans.
• He opined that: It is almost impossible to give a precise definition of
the distinction. It is often easy to recognize a contract of service when
you see it, but difficult to say wherein the difference lies. A ship’s
master, a chauffeur, and a reporter at a newspaper are all employed
under a contract of service, but a ship’s pilot, a taxi-driver, and a
newspaper contributor are employed under a contract for services.
Determining whether an
employment relationship exists
• One feature which seems to run through the instances is that, under a
contract of service, a man is employed as part of the business and his
work is done as an integral part of the business; whereas under a
contract for services, his work although done for the business, is not
integrated into it but is only accessory to it.

• This approach was applied in the Barbardian case of Smith v Griffith.

Determining whether an
employment relationship exists
• However, in another case, Rudder v Dallaway, Sir William Douglas CJ, espoused
the view that a multiplicity of considerations had to be taken into account when
determining whether there exists a contract of service or a contract for services
and that the integration test alone was an inadequate benchmark.

• This was affirmed by Kentish J in the later Barbadian case of Henderson

Franklyn v American Life Insurance Company. In this case, although the contract
signed by the plaintiff explicitly referred to the relationship being one of
independent contractor and that “nothing in the contract shall be deemed to
constitute the relationship of employer and employee” Kentish J concluded that
no one test was capable of determining the issue and there were insufficient
factors indicating the existence of a contract for services.
Determining whether an
employment relationship exists
• The mixed/multiple test
• The acquiescence by successive court decisions that the fact that the
employer could tell the individual what to do and how to do it was
not a conclusive indication that the relationship was one of a contract
of service was a powerful factor in the formulation of the
mixed/multiple test as evidenced in the case of Ready-Mix Concrete v
Minister of Pensions.
Determining whether an
employment relationship exists
• Here McKenna J stated that: ….whether the relation between the
parties to the contract is that of master and servant or otherwise is a
conclusion of law dependent upon the rights conferred and the duties
imposed by the contract. If these are such that the relations are that
of master and servant, it is irrelevant that the parties have declared it
to be something else. I do not say that a declaration of this kind is
always necessarily ineffective. If it were doubtful what rights and
duties the parties wish to provide for, a declaration of this kind might
help in resolving the doubt and fixing them in the sense required to
give effect to that intention.
Determining whether an
employment relationship exists
• …a contract of service existed if
• A) the servant agreed in consideration of a wage or other remuneration to provide his own
work and skill in performance of some services for his master.
• B) the servant agreed expressly or impliedly that, in performance of the service he would be
subject to the control of the other party sufficiently to make him the master and
• C) the other provisions of the contract were consistent with its being a contract of service; but
that an obligation to do work subject to the other party’s control was not invariably a
sufficient condition of a contract of service and if the provisions of the contract as a whole
were inconsistent with the contract being a contract of service, it was some other kind of
contract and the person doing the work was not a servant; that where express provision was
not made for one party to have the right of control, the question where it resided was to be
answered by implication; and that since the common law test of the power of control for
determining whether the relationship of the master and servant existed was not restricted to
the power of control over the manner of performing service but was wide.
Determining whether an
employment relationship exists
• Would seem that his has amended the version of a worker as an
individual subject to a contract however described in circumstances
where that individual works under the direction, supervision and
control of the employer regarding hours of work, nature of work,
management of discipline and such other conditions as are similar to
those which apply to an employee.
Determining whether an
employment relationship exists
• The economic reality test
• In the case of Lee Ting Sang v Chung Chi Keung- Lord Griffiths clarified that
the fundamental test to be applied was a mixed questions of fact and law
requiring not only the interpretation of the written contract between
parties, but an investigation and evaluation of the circumstances in which
the work was performed. The applicant was a mason working for the first
respondent on a sub-contract. He was told where to work, how to work,
when to work, his work was supervised, his tools were provided, he was paid
based on a fair day’s wage, he assisted with sharpening tools and gave
priority to the work of the respondent when requested to work for other
contractors. He suffered a head injury on his job and the issue of his ability
to claim compensation as an employee was raised.
Determining whether an
employment relationship exists
• It was held that a finding by the court of first instance that a workman
was or was not, employed under a contract of service was a question
of fact with which an appellate court could not interfere unless there
was no evidence to support the finding of the lower court.

• Lord Griffiths cautioned that to apply the common law test was of
whether a person is ‘part and parcel of the organization’ is likely to be
misleading in the context of a statute that expressly contemplates
that casual workers and workers for two or more employees
concurrently, may be employed under a contract of service
Determining whether an
employment relationship exists
• The economic reality test was applied in the Barbadian case of Sagicor
Insurance Company v Carter, Ishmael, Hill and Audain.
Determining whether an
employment relationship exists
• The mutual obligations test
• In contrast to the economic reality test, the mutual obligations test
proffers the view that, when determining whether the relationship
between the parties was that of employer and employee or employer
and independent contractor, the tribunal should focus on the mutual
obligations agreed in the contract, rather than concentrating on what
actually occurred.
Determining whether an
employment relationship exists
• O’Kelly v Trusthhouse Forte plc- Explored the peculiar challenge
presented when dealing with casual workers. In this case the workers
were employed as banqueting staff. They did not perform their duties
under permanent contracts of employment but were engaged on a
regular basis for each function and were thus referred to as ‘regular
casuals’. Their attempt to unionise was thwarted by dismissal and
they subsequently sought redress from the industrial tribunal for
wrongful dismissal. The tribunal found that there was no overall
contract of employment between the parties and that the workers
were in business on their own account as independent contractors
supplying services.
Determining whether an
employment relationship exists
• It is noteworthy that O’Kelly v Trusthouse Forte plc was considered in
the Sagicor case highlighting that the employment contract requires
the employer to provide work and wages and in return, the employee
shall provide his services personally.
• It was acknowledged that the lack of mutuality of obligations was not,
in itself, a decisive factor and that casual workers may, in appropriate
circumstances, be considered employees. Simmons CJ underscored
that “care must be exercised in this area because each case will turn
on its own facts and the terms of the particular contract being
construed”.
Determining whether an
employment relationship exists
• A proper approach requires a thorough consideration of all aspects of
the relationship between the parties including an examination and
construction of the terms expressly set out in the written contracts as
well as the manner in which the contracts were performed. The
written contracts are the principal, though not the only, sources of
information as to the nature of the contractual relationship between
the parties. There are other factors or features of the relationship that
require examination. No single factor or feature is likely to be decisive
in itself. Each may vary in weight or direction pointing either towards
a contract of service or a contract for services.
Determining whether an
employment relationship exists
• Sometimes what it boils down to is whether or not the worker is
carrying on business his/her own account.

• Remains an area open to interpretation.

• Inference from cases that none of the tests can stand alone. We have
seen that Commonwealth Courts in the Caribbean favour a wide
approach.
Terms in employment contracts
• The rights and obligations under the employment contract are called
terms.

• These may be outlined by the parties in the contract, mandated by

legislation, incorporated by the collective agreement, or included by
custom and practice.

• In appropriate circumstances, terms may be implied by the courts or

tribunals.
Terms in employment contracts
• At common law there is no requirement that contractual terms be in
writing; orally communicated terms may be equally binding.

• Therefore, express terms in an employment contract context refers to

the terms directly discoverable by word or act, rather than the fact
that they have been reduced to a written statement or contract
document.
Terms in employment contracts
• However, empirically, a written contract provides the best indication
of the express terms that have been mutually agreed by the parties
and where necessary, is the best proof of the contours of the
employment relationship.
Terms in employment contracts
• Terms in any contract can either be express or implied.
An express term is one that is written down or agreed
orally. An implied term is one that is not an express
term, yet which still forms part of the contract.

• No matter how well drafted the Contract of

employment is, there will still be implied terms and it is
important to know what obligations and duties these
impose.
Terms in employment contracts
• It's better to have a written Employment contract with
express terms. It'll help set out clearly the duties and
obligations the employee and employer can expect from
the employment relationship.
Terms in employment contracts
• It is common practice to include express terms in the employment
contract in respect of the duties to be carried out by the employee,
the length of the contract and the amount of remuneration.

• As with all contracts the parties are free to negotiate the obligations
and benefits to be had once they are not restricted by statute or
public policy, and these will vary depending on whether the
employment contract is temporary, for a fixed term, has renewable
terms or has an indefinite duration.
Terms in employment contracts
Express terms in the body of the contract
The employment contract negotiating process is often characterized by
standard form agreements which consist of non-negotiable terms that
derive from extrinsic sources: in particular, legislation, collective labour
agreements, and custom and practice.

Although this may seem to operate as a fetter on freedom to contract, the

underlying policy objectives are invariably conceived to protect the
employee’s interest as the perceived weaker negotiating party or, in any
event, to support, the maintenance of harmonious employment relations.
Terms in employment contracts
• Other important documents that have an impact on the employment
relationship are written and oral communications exchanged before,
during and after the signing of the contract, employee handbooks,
disciplinary codes and notice boards.
Terms in employment contracts
• It is a question of fact to be determined by the court or tribunal
whether it was the intention of the parties to be bound by these
types of documents where they have not been deliberately
incorporated into the employment contract.
Terms in employment contracts
• Courts and tribunals have shown more of willingness to do where the
employment contract makes reference to the document or it is
attached to the employment contract itself.

• Once mutual agreement in respect of an offer, an acceptance and

valuable consideration has been established any variation of the
express terms requires reciprocity.
Terms in employment contracts
• In Banking Insurance and General Workers’ Union V Guardsman
Security Services Ltd- the Industrial Court of Trinidad and Tobago
denounced the unilateral modification by the employer of the terms
of the employment contract. The court further espoused that while in
its opinion the employer’s act of offering the employee a lower
position, fewer days’ work and reduced salary was harsh and
oppressive, it was prepared to take into account the fact that the
employee did not come to the court with clean hands when
determining an appropriate remedy.
Terms in employment contracts
• Keith V Ruffin’s Crystal Palace Hotel- the court determined that the
parties were bound by a promissory note that had been mutually
agreed in respect of the termination of the employment contract,
albeit that the promissory note did not form part of the employment
contract. In particular, the promissory note did not provide for
deductions for bank holidays so no payments were made under this.
Terms in employment contracts
• Verbal variation of a written contract of employment is likely to be
deemed a breach.
Terms in employment contracts
• Express terms mandated by legislation:
• Most written contracts contain express terms in relation to the duties
to be performed, the duration of the contract and the remuneration
to be paid for services rendered.
• In some Commonwealth Caribbean jurisdictions, legislative provision
has been made for written particulars of employment that must be
included in the contract of service.
• This has the distinct advantage of ensuring the adoption of terms that
incorporate the basic conditions of employment and safeguarding
against vague oral and written agreements simultaneously
Terms in employment contracts
• Statutory particulars of employment, if not expressly included in the
contract of employment, will be presumed by the courts to be
applicable. Thus they may be classified not only as express terms and
implied terms but also ‘imposed terms’ where no opt out is afforded
under the legislation.
Terms in employment contracts
• The net effect is that the managerial prerogative to determine the
express terms of the employment contract has been significantly
eroded by legislation.
Terms in employment contracts
Express terms implied by legislation
Wages- A standard feature of the Commonwealth Caribbean
employment legislation landscape is the statutory provision for the
payment of wages.

Vacation leave and sick leave- Paid time off is now a well-enshrined
feature in most employment contracts. Despite propensity for abuse, it
is generally accepted that sick leave and vacation leave are critical to
the continued performance and well-being of the employee.
Terms in employment contracts
• Maternity leave- Statutory protection for maternity leave has been
introduced through the Commonwealth Caribbean. Characteristics
features of these statutes are: provisions for the grant of maternity leave
to female employees, the prohibition against termination of their
contracts of employment during such leave, and a bar on the employer
requiring female employees to resign because they are pregnant.
• No support in favor of adopting the North American and European
models that propound a gender-neutral approach allowing for paternity
leave/maternity leave has yet been manifested.
• Within the Commonwealth Caribbean, maternity leave is generally no
less than 12 weeks.
Terms in employment contracts
• EXPRESS TERMS INCORPORATED BY THE COLLECTIVE AGREEMENT
• Collective bargaining is the process by which groups of employees and
employers (whether directly or through representative organisations)
negotiate and settle by agreement the terms and conditions of employment.
• The resulting collective agreement is signed between the employer and the
trade union on behalf of the workers. It has been suggested that the trade
union in so doing does not act on behalf of the employee as his agent, but
rather the trade union negotiates as its own principal. This raises the issue as
to whether the collective agreement is binding as against an individual
employee who is not party to the contract also whether the agreement is of
any legal effect being a separate contract from the employment contract.
Terms in employment contracts
• In the case of Half Moon Bay Hotel v NWU- Parnell J opined that “a
collective agreement is dependent on mutual trust and obligation free
from any legal enforcement…collective agreements are not legally
enforceable because in the contemplation of the parties they were
never intended to be enforced by order of Court but only by industrial
action.
• This approach is not often used in the Commonwealth Caribbean
where courts have instead adopted a more expansive view in favor of
legal effect where there is an unequivocal written statement to the
contrary.
Terms in employment contracts
• This was demonstrated in Shipping Association of Georgetown v
Hayden where the Court of Appeal of Guyana held that the legal
effect of an employment contract clause that incorporated the
collective labour agreement was to make the parties bound and
render the collective labour agreement enforceable.
Terms in employment contracts
• The modern common law position that exists a sufficient degree of
agency between the trade union and its members to empower the
trade union to negotiate binding terms has been extended in some
Caribbean Commonwealth territories through legislative reform
mandating that collective labour agreements between employers and
trade unions be regarded as legally enforceable, provided the
agreements are registered with the relevant regulatory authority.
Such is the case in Trinidad and Tobago. (Bahamas, St.Lucia, Grenada,
Guyana and Antigua and Barbuda).
Terms in employment contracts
• The Court of Appeal went a step further in Trinidad and Tobago in the
case of Texaco Trinidad Inc v OWTU.
• The Industrial Court purported to settle an industrial dispute involving
tank wagon drivers by varying the terms of the registered industrial
agreement. The decision was set aside by the Court of Appeal and it
was confirmed that ‘the terms of registered industrial (collective)
agreement are intended to operate as a statutory code in relation to
the rights and obligations of the parties and accordingly, cannot be
varied by the court during its continuance’.
Terms in employment contracts
• In some Commonwealth Caribbean countries, benefits negotiated
under the collective agreement have traditionally been extended to
non-unionized workers (Scholar v Hess Oil Saint Lucia Ltd)
Terms in employment contracts
Express terms included by custom
Reliance on custom requires proof that the custom is reasonable, well
known, certain and unequivocally accepted by the parties.

The collective agreement is perhaps the most obvious example. It is

crystallised custom that collective agreements are incorporated into
individual contracts of employment by way of conduct even if the
individual has no knowledge of the terms.
Terms in employment contracts
• In light of the harmonization agenda being advanced by CARICOM and
the ILO, and the fact that several employment issues are now guided by
ILO Conventions and Model Laws, it is conceivable that Commonwealth
Caribbean courts would rely on them.
• In this sense, where these instruments have not been ratified and are
therefore not binding, they may nonetheless be regarded as forming part
of custom and thus very persuasive.
• Belize’s International Labour Organisation Conventions Act 1999 is
significant as it confirms the jurisprudential weight to be given to the ILO
conventions, but also cautions that where there is a conflict between the
Labour Act and the conventions, the Labour Act shall prevail.
Implied terms
• Not every term of an employment contract is expressly
written down. Employment contracts will sometimes
need contractual terms to be implied into them to make
them workable and fill gaps where nothing was agreed
between the employer and employee. Read this guide
to make sure you understand implied terms and the
obligations imposed on you even when it isn't in writing.
Implied terms
• Implied terms are terms of the employment contract
that are not necessarily set out in writing or were
agreed orally but will nevertheless form part of the
agreement between the employer and employee. No
matter how well drafted the Contract of employment is,
there will still be implied terms and it is important to
know what obligations and duties these impose.
Implied terms
• The contract of employment contains two types of implied terms. On
the one hand there are terms implied in fact. In this category of implied
terms judges fill perceived gaps in the contract with implied terms that
come from a number of sources.

• In some cases, the judicial filling of gaps relies upon industry or

customary practice. In other cases, it is the particular facts and
circumstances of the parties that underpin the insertion of an implied
term. It is a process that provides leeway to a judge convinced that a
contract is incomplete and requires an imported term to provide
business efficacy to the contract.
Implied terms
• On the other hand there are the implications of law that arise from
the very existence of the employer-employee relationship. With
implied terms in law, standard terms are imported automatically into
the employment contract regardless of the will of the parties. It is a
state of affairs qualitatively different from the conventional wisdom
that a contract only contains express terms that the parties have
agreed to. In effect, the contract of employment permits court-
imposed terms to underpin core features of workplace law.
Implied terms
• On the part of employees, the standard terms are the duty of
obedience, fidelity, confidentiality, cooperation, care and competence.
These standard terms implied into the contract of employment law are
presumed to have been understood at the time of the making of the
agreement.

• The presumption is that the employee gave assent to these standard

terms and this assent legitimates their incorporation into the contract
of employment. However, the legal concept of implied terms in law and
their role in the common law of employment is subject to judicial
scrutiny.
Implied terms
• IMPLIED TERMS BY THE COURTS
• This is usually done where the court finds that it is necessary to give
meaning to the presumed intention of the parties or where it appears
reasonable in the circumstances to do so in order to give business
efficacy to the contract of employment. This objective approach was
applied in the Dominican case of Didier v Geest.
Implied terms
• It was reasoned that terms could be implied into a contract of
employment as a question of fact and as a question of law and terms
inferred as a question of law were deemed to be common law
incidents of the employment relationship.
• When faced with the task of determining whether or not to imply
terms into the employment contract, courts have demonstrated much
reluctance to abandon long-standing contractual principles and
common law rules of equity except for circumstances of absolute
necessity.
Implied terms
• The courts have frowned upon the use of express terms by the
employer to secure the sole discretion to unilaterally vary the terms
of the contract; the courts have narrowly interpreted sweep up
clauses that make reference to ‘any other duties that may reasonably
be required of you’, and it remains to be seen if they will denounce
the inclusion of clauses that ‘this agreement constitutes the entire
agreement between us with regard to its subject matter and
supersedes any previous agreement whether verbal or written made
between us at any time’.
Implied terms
• Undoubtedly, this line of reasoning lends credence to the need for
legislative intervention.

• The interpretation role of the courts has not fallen into obsolescence;
rather it has been duplicated as both the employment contract and
the relevant legislation must be construed together.
Implied terms as it relates to the
employer
• It is settled employment law practice that the contract of employment
implicitly imposed certain contractual obligations on the employer
vis-à-vis his employee. These include a duty to pay wages, a duty to
provide work, a duty to maintain trust and confidence, the duty to
provide a safe and healthy work environment and a general duty to
act in good faith.
Implied terms
• A duty to pay wages:
• It is possible to view wages as fair consideration for services
performed by the employee under the employment contract. By
extension, it can be inferred that the employee’s failure to perform or
to perform satisfactorily would justify the employer deducting wages
proportionately to offset the diminished return on the agreed bargain.
• The extent to which the common law has adopted this line of
reasoning may be examined in Miles v Wakefield Metropolitan District
Council.
Implied terms
• This case is the authority for the view that an employee is not entitled
to remuneration under his contract of employment unless he is willing
to perform the obligations stipulated therein. Here the court held that
the employee who refused to work on Saturdays, contrary to the
employment contract, was not entitled to a salary for those days.
Implied terms
• The duty to provide work:
• The provision of work is an essential part of the bargain underpinning the
employment contract. Consequently, an employer who does not give his
employee sufficient work will not be exculpated from his duty to pay wages.
This was underscored in Devondal v Rosser & Sons.
• In this case the court ordered the employer to pay damages to his employee
for breach of the implied duty to provide work during the period between the
closing of the operations of the business and the expiration of the employee’s
notice.
• Remember that the employer’s responsibility to provide work in waived
provided there are justifiable reasons to lay off or suspend the employee
(Holder v Caribbean Air Cargo).
Implied terms
• Taking reasonable care to prevent abuse and intimidation:
• The common law position as stated by the court in Palmanor Ltd V
Cedron- is where an employer uses blatant, foul and abusive language
against his employee, this amounts to the breach of the implied term
of trust and confidence and a repudiation of the contract of
employment.
Implied terms
• Sexual harassment:
• Wood v Freeloader Ltd- is authority for the view that where an
employee has been seduced and undue sexual influence has been
exerted, this amounts to a breach of the implied duty of trust and
confidence. Here it was held that the employee was entitled to claim
constructive dismissal on the ground that, by entering into a
relationship with the employee, the defendant brought about an
intolerable situation.
Implied terms
• Promoting equality
• In Transco plc v O’Brien- the employer was held to be in breach of the
implied duty of trust and confidence for denying the employee the
opportunity given to all other permanent employees for signing a new
contract for employment with enhanced redundancy terms.
Implied terms
• Maintaining the right to privacy and confidentiality:
• The case of Haford v UK- Considered the overlap between employment
law and international law in respect of an individual’s right to privacy.
Here the employer intercepted phone calls at the employee’s home and
office in order to gather information to be used in proceedings against
her.
• The employer was held to be in breach of the employee’s right to
private life and correspondence provided for under Article 8 (1) of the
European Convention on Human Rights. Other countries across the
Caribbean Commonwealth are signatories of The United Nations
Universal Declaration on Human Rights.
Implied terms
• This was acknowledged by the Caribbean Court of Justice in the landmark
decision of Shanique Myrie v The State of Barbados.
• The court, in considering the claimant’s please for damages in respect of
alleged breaches of human and fundamental rights, underscored the
significance of this inalienable right.
• By extrapolation, when an employee goes to work, he takes his human
rights with him, he does not leave them at home. Recognition of the
employees’ human rights is therefore unavoidable, even for CARICOM
member states who are not signatory to international treaties on human
rights or have no Bill of Rights, as they are nonetheless bound by this
authoritative precedent emanating from the CCJ in its original jurisdiction.
Implied terms
• To deal fairly:
• This would include refraining from making unsubstantiated allegations that might
jeopardise the employee’s future employment prospects. This was successfully
argued as a breach of trust and confidence in Robinson v Crompton Parkinson.
• It was held in TSB Bankplc v Harris that misleading and destructive references
given in respect of the employee are likewise a breach of the employer’s implied
duty of trust and confidence.
• Fair dealing also contemplates the establishment of internal dispute resolution
mechanisms (WA Gold v McConnell)- the employee’s resignation was deemed
justifiable as the employer railed to provide and implement a grievance
procedure. This amounted to a breach of the implied duty of trust and
confidence and entitled the employee to claim constructive dismissal.
Implied terms
• The duty to provide for the employee’s economic security;
• If the employer fails to demonstrate some measure of concern for the
employee’s economic security, he may find himself responsible for the
subsequent pecuniary loss suffered by the employee:
• Marlow v East Thames Housing Group- in respect of pension entitlements
that were foregone
• Can also apply to negotiation the benefits of insurance premiums in favour of
employees.
Implied terms
• Carrying out obligations under the employment contract in good
faith:
• Although it is difficult to determine when this requirement will be
imposed by the courts, it is generally expected that the employer will
exercise his obligations and discretionary prerogatives under the
employment contract in good faith.
• Imperial Group Pension Trust v Imperial Tobacco Ltd- it was held that
an employer cannot give a blanket refusal to consider increases to a
pension scheme to the extent that this evinced bad faith.
Implied terms
• IMPLIED TERMS AS IT RELATES TO THE EMPLOYEE
• As with the employer, employees are also bound by certain implied
terms or duties attached to the employment contract, to promote
balance and equity in workplace relationships. These include the
duties to obey reasonable and lawful orders, to co-operate with the
employer, to exercise reasonable care and skill and a duty of fidelity
and to act in good faith.
Implied terms
• It was confirmed in Didier v Geest Industries Ltd that dismissal on the grounds of
breach of duty to obey reasonable and lawful orders requires willful disobedience
or there must have been a repudiation of an essential condition of the employee’s
contract.
• In OWTU v Caribbean Packaging Industries Ltd- the employee’s refusal to obey an
order to remove items from one storage area to another in her employer’s factory
was found to be willful. The court held that the employer’s request was lawful,
reasonable and within the scope of the employee’s duties. The reason advanced by
the employee for refusal to comply was that the task posed a danger to her health.
In light of the employee’s compliance with similar orders in the past, the court
concluded that her explanation was unfounded and ratified the employer’s
disciplinary action against her.
• It should be noted that the duty to obey orders does not extend to unlawful acts.
Implied terms
• The duty of cooperation and mobility clauses:
• Central to this is the concept of promoting the most efficient
execution of the contract of employment and guiding one’s actions
and inactions by good faith.
• Refusing to work overtime
• Refusing to cover for employees who are absent.
• Collaborating with employer on new systems introduced.
Implied terms
• Duty to exercise reasonable care and skill:
• The employee also has a duty to perform his obligations under the
employment contract with reasonable competence, are and skill. This
duty extends to taking proper care of the employer’s property.
• Where the employee possesses a particular skill that is required for
the job and fails to discharge this thereby causing the employer to
sustain a loss.
• The modern manifestation of the principle is more often seen when
the employee acts negligently in the exercise of his duty e.g loan
manager issuing loans to people with bad credit risks.
Implied terms
• Duty of fidelity, non-competition, non solicitation and trade secrets:
• Employees are expected to be loyal to the employer and not do anything to
harm the employer’s business. In particular, the employee should not disrupt
the employer’s business interest, be dishonest, compete with the employer
or disclose confidential information.
• Rahman v Industrial Gases Ltd- The Trinidad Court of Appeal frowned on the
actions of the claimant who became principal shareholder in a similar
company to the one in which he was employed and further was involved in
selling the employer’s product to the rival company at reduced prices. The
court viewed this as a breach and considered it acceptable for the employer
to dismiss him in the face of an obvious breach of the implied term of fidelity.
Overall key terms for an
employment contract
• Basic wage an employee will receive
• Conditions for any overtime or bonus (if applicable)
• Time that the employee must work, which could be in terms of days
of the week, hours of the day, or a total number of hours per week
• Entitlement to paid holiday
• Sick pay
• Redundancy pay
• Period of notice required by the employer or employee to terminate
the employment.
What additional terms should be
included?
• Well given the pandemic, now we have to consider requirements
around working from home, perhaps HSE considerations etc.
Restrictive covenants
• Every organisation has information that it considers both integral and
invaluable to its success. They may want to restrict the use of this
information by employees after their employment has ended since it
may be vital to the protection of their business or customer contacts.
An ex-employee who has knowledge of your technology, strategic
information or customers or clients may be an attractive asset to a
competitor seeking to encroach upon your market.
• There are certain terms which are implied into
employees' contracts which may provide a certain level
of protection for employers while the employment
continues but what happens after the employee leaves?
Restrictive covenants
• An employer may seek to protect the use of this information both
during employment and after the employment ends through the use
of what are known as restrictive covenants. Many employers include
these clauses in the contracts of employment of senior or highly
skilled staff at the commencement of the employment relationship.
Having such clauses set out in the contract from the outset may help
to deter employees from joining competitors and may warn off
potential new employers.
• A restrictive covenant is typically a clause in a contract
which prohibits an employee from competing with his ex-
employer for a certain period after the employee has left the business,
or prevents the ex-employee from soliciting or dealing with
customers of the business by using knowledge of those customers
gained during his prior employment.
Restrictive covenants
• The starting point for any such post-termination
restriction is that it is void on the grounds that it is a
restraint of trade and contrary to public policy. It follows
that an employer is generally not entitled to protect
himself against competition from his ex-employees.
However, if the ex-employer can convince a court that
the covenant is:
• designed to protect his legitimate business interests;
and
• that it extends no further than is reasonably necessary
to protect those interests
• then it will be upheld and enforced.
Restrictive covenants
Types of restrictive covenants
• The standard types of restrictions which can be used by employers are:
• non-competition covenants - restrictions on the former employee
working in similar employment for a competitor;
• non-solicitation covenants – which prevent poaching of
clients/customers/suppliers of the former employer;
• non-dealing covenants – which prevent a former employee from
dealing with former clients/customers/suppliers, regardless of which party
approached the other;
• non-poaching covenants – which prevent an employee poaching
former colleagues.
• For a restrictive covenant to be enforced it must not be drafted too
widely.