Summary Note on Employment Law : 4 ways to include Terms into Employment Contract

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Notes on Employment Law : 4 ways to include terms in employment contract

..............................Here it goes...............................



4 WAYS TO INCLUDE TERMS IN THE EMPLOYMENT CONTRACT

1)   Included via ‘Express Way’
§      Here, the matter is referred expressly from the offer letter.

©       Case: Bank Bumiputra M’sia v Mohamad b. Salleh
FOC: In this case, the officer handbook has been expressly incorporated in the offer letter. In that book it stated that an employee has to be secured with insurance by the employer. The bank officer in this case has incurred injury & would like to claim for insurance. The insurance co has deposited the insurance payment to the bank, the employer so that such payment can be forwarded to the employee. However, the bank refused to make such payment by arguing that, under the contract law, the bank officer is has no privity of the contract.
Held: The contract that must be focused here is Employment contract, where it is clear that the officer’s handbook has been incorporated within the offer letter. The bank is directed to forward the payment to the bank officer. It is ‘of right’ (claimable) & not ‘a privilege’ (cannot be claim).

2)   Included via ‘Implied Way’
§      Here, the matter has to be determined by the court as the term is not included within the employment contract,
§      The intentions of the parties will be focused on.

©       Case: Colgate Palmolive (M) Sdn Bhd v Cheong Foo Weng
FOC: The employee claimed that his retired age is 60 yo. The employement contract did not said anything about the retirement age. Employer claimed such retirement age to be at 55 yo.
Held: Court stated that, the allegation to have 60 yo as the age of retirement cannot be accepted as it is clear that such age is not stated in the agreement, making it to be apparent that to have 60 yo as the retirement age of the employee is not one of the intentions of the parties.  At the same time, court also cannot put interpretation biased to the employer who alleged that the retirement age is 55 yo. Here, court in the absent of the retirement age within the employment contract, has to determine what is the normal retirement age for other people in the employee situation. Despite the fact that there are 3 other employee who has retired at the age of 60 yo in that co, this does not advance the employee’s case.  The guideline stated that the retirement age should be at 55 yo.

3)   Included via ‘Law’
§      Here, it is referring to the ‘collective agreement’ between the parties.
§      Eg:
·         S17 of Akta Perhubungan Perusahaan 1967.
·         OSHA
·         National Union Agreement with Banks around M’sia.

©       Case: Young v Canadian
Held: Court stated that, unless it was really intended by both parties, the collective agreement cannot be regarded by the court as the terms of the employment.

4)   Included via ‘Custom & Practice’
§      Here, it is referring to the custom & practices of the co itself.
§      It is not codifies in statutory form.
§      Elements that need to be satisfied:

  i.        Practice must be reasonable
ii.        Practice must not be unlawful
iii.        Practice must be practised for a quite a long time
iv.        Practice must be able to be proven

©       Case: Sagar v Ridehalgh
FOC: Mr Sagar was a cotton weaver for Ridehalgh. He claimed that the deduction made by the co upon him on the ground of poor craftsmanship is violating Truck Act 1831. On the other hand Ridehalgh argued that it is an old practice of 30 years for the co to deduct the payment when there is a poor craftsmanship ie the work that is performed without reasonable care & skill in the management’s eyes. In this case, the poor work done by Mr Sagar has caused 3 yards from the 80 yards of the fabrics cannot be used.
Held: Court stated that the practice is a reasonable practice and lawful one. This is because when the employee produced a poor quality work, employer will certainly incurred loss for it (for case involving the craftsmanship). Besides, this practice has been in existence within the co for more than 3 decades.

©       Case: Hardwick v Leeds Area Health Authority
FOC: The employer in this case has dismissed the employee due to the fact that the employee was absent due to illness suffered by him. This medical officer has stated that the worker will be able to work again within 2-3 days. Employer argued that this has been a practise within their company that the employee can be dismissed once their sick leave have been exhaustive, & they still use the sick leave to absent from work.
Held: This practice as in the opinion of the court has been regarded to be not reasonable at all.

©       Case: Waite v Govt Communications
Held: Court in this case has substituted 1 express term within the contract with the custom & practise of the co. This is because, court is off the opinion that at the end of the day, the relationship between the parties is important. In this case, the action is relating to the argument of retiring age. Within the contract, the retiring age stated is 60 yo, while the practise is 65 yo.


End

Next will be on #ImpliedandExpressTerms

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