contract of employment

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contract of employment

an agreement whereby a worker undertakes to work for an employer in return for a wage or salary. In the UK most workers are entitled to a written statement of the main elements of the contract, such as rates of pay, hours of work, and notice requirements. These are referred to as the terms and conditions of employment. It is usual for a brief JOB DESCRIPTION to be included in this statement. However, this document is not necessarily the full contract: the requirements stipulated in a separate company rule book and any agreements reached through COLLECTIVE BARGAINING also form part of the contract. Legally, this is encapsulated in a distinction between ‘express terms’ and ‘implied terms’: the former are explicitly part of the contract document signed by the employee whilst the latter are the other elements of the contract that are not explicitly agreed between employer and employee but which are nevertheless held to form part of the agreement in law.

The contract provides rights and imposes obligations on each party to it. The employer has the broad right to direct the work of the employee: what to do and how to do it. If the employee fails to carry out their allotted duties satisfactorily the employer can terminate the contract. However, the employer must have a valid reason for sacking the employee and must have carried out the termination in accordance with an acceptable DISCIPLINARY PROCEDURE. If the employee feels that they have been dismissed unfairly or that proper procedures have not been observed, they may take an UNFAIR DISMISSAL case (for reinstatement or compensation) to an EMPLOYMENT TRIBUNAL. See PRINCIPAL-AGENT THEORY.