18 March 2013

HR MANAGEMENT - Terms and Conditions of Employment






TERMS AND CONDITIONS OF EMPLOYMENT

By Faudzil Harun





Terms and conditions of employment could be a combination of :

1.  Individual contract of employment
2.  Collective agreement
3.  Employment Act or other legislation
4.  Implied terms.

Terms and conditions of employment may include not only the contractual terms and conditions but also those terms which are understood and applied by the parties in practice or habitually or by common consent without even being incorporated into the contract. 


Terms of Employment       

Basically terms of employment include grade, probation period, confirmation, promotion, dismissal, retrenchment, bonus, wages, hours of work, overtime work, leave of absent, and holidays. Terms of employment can only be changed if there is agreement between parties. If the employer finds it necessary to cut down on wages or benefits during a downturn of economy, he must discuss with the employees. Failure to do so would cause a breach of contract for which the employee can later claim for constructive dismissal.

Conditions of Employment

Conditions of employment mean the physical condition under which an employee works such as appertaining to matters of safety and physical comfort.

Lord Dening held in BBC v Hearn & Seven Other (1978 AER 116-118) that “Conditions of Employment” would include all forms of welfare, like sports club, dramatic societies and colour schemes as well as lockers, seats, showers and cabinets, creches, lighting, ventilation, overcrowding and rest periods.

Conditions of employment however can be varied unilaterally as was held in the BBC case. If the employer has been providing uniforms for instance, he could decide to withdraw it. However, if there is a collective agreement in existence that provides for uniform, he must inform and discuss with the union before deciding to withdraw it.


Implied Terms        

A contract of employment by its nature may not express all the terms between the parties. An aspect of implied terms is that the term in question was so obvious that the parties did not feel the need to state it expressly. Some examples of such implied terms are as follows :

Contracts Act, 1950
Section 9 – Promises, express and implied
So far as the proposal or acceptance of any promise is made in words, the promise is said to be express. So far as the proposal or acceptance is made otherwise than in words, the promise is said to be implied.

Implied Terms of Employer

Example 1 Employer should respect an employee
In Len Omnibus Co. Bhd. V Ngoo Mee Ngok – I/C Award 221/96, the employer had issued a letter of transfer to the claimant without discussing and informing the employee before issuing the letter. The court held that the company had failed to treat the claimant who had a long and unblemished record with respect and it amounted to an affront to the pride and dignity of the employee.

Example 2 – Employer should treat an employee fairly and reasonably
In Philips Malaysia Sdn Bhd v Loke Kwok Lim – I/C Award 90/96, it was held that to constitute a breach of this implied term, it is not necessary to show that the employer intended any repudiation of the contract : the tribunal’s function is to look at the employer’s conduct as a whole and determine whether it is such that the employee cannot be expected to put up with it. It is also an implied term of the contract of employment that the employer treats the employee fairly and reasonably. It would be a breach of this implied term if the employer does not give an increment to his staff when everyone else in the organization was given one. The employer shall not prevent the employee from performing his work. If the employee is deprived of the opportunity of doing his work, it is a breach even though the employer pays him full wages.

Implied Terms of Employee
As for the employee, there is the implied duty of fidelity and good faith that does not only require that the employee refrains from misuse or from disclosing information whilst in employment of the employer. There is also the implied duty, that prohibits the employee from using confidential information obtained during his employment, without the employers consent, for his or someone else’s use after the employment comes to an end. His other implied obligations include the followings :
The employee shall ……….

● Give honest and faithful service,
● Use reasonable skill and care in his work,
● Obey all reasonable orders given to him,
● Present himself for work at the designated time,
● Give full disclosure where there can arise a conflict of interest situation.