Implied oral terms to employment contracts

Implied oral terms to employment contracts

The importance of having a properly drafted contract of employment.

 

The recent case of Prometric Ltd v Cunliffee [2016] has once again affirmed to us the importance of having a properly drafted employment contract that can be relied on should issues around the terms arise at trial.

 

Prometric Ltd v Cunliffee [2016] saw an employee unsuccessfully claim on appeal that he was contractually entitled to a pension scheme due to an oral conversation without confirmation in writing. The Claimant had been an HR director with firm A in which he had a membership of a defined contribution pension scheme. In 2000, firm A was taken over by firm B and the Claimant was admitted to its more generous defined benefits scheme. Firm B was then later taken over by firm C in 2007. The Claimant lost his entitlement to firm B’s generous scheme but became entitled to C’s scheme. He claimed breach of contract by firm C because he had been assured by what he believed to be an implied oral term in 2000, that with his seniority he was now entitled to firm B’s more generous scheme. The argument was that firm C’s scheme should be of equivalent stature to the terms of firm B’s more generous scheme.

 

The Respondent, firm C, had applied to have the claim struck out however was refused. On appeal however, the judge held ‘It was inconceivable that the respondent’s claim would succeed at trial. On subjects as complex as pensions, business people did not enter into oral agreements. If they did, they would certainly confirm them in writing.’

 

Therefore we have once again learnt the importance of having a properly drafted employment contract that clearly sets out express terms by which an employee is bound by. It is clear that a drafted contract is far more likely to adhere to what a court would deem satisfactory. Brachers can help you with drafting and legal implications around employee contracts. If you would like to talk to us about any of these issues, please contact Catherine Daw, Head of Employment on 01622 690691 or email at catherinedaw@brachers.co.uk.

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