Flexibility in relation to employment contract terms, particularly working arrangements, is often high on employees’ lists of concerns when staring a new role or entering into a new contract of employment. It is, therefore, very important for employers to carefully document the terms agreed, particularly where terms have been agreed orally.
Case Study: Osvald v Holden and Co LLP
The case of Osvald v Holden and Co LLP, 2022 aptly articulates the danger of agreeing employment contract terms orally and then subsequently varying these terms unilaterally.
In this case, the Claimant, a trainee solicitor, who had accepted a training contract following oral discussions with the Respondent, a law firm, was successful in his claim for breach of contract after the Respondent varied the terms of his contract only four days prior to his start date. The terms in question were the Claimant’s place of work, his working hours and the use of a paid-for parking space, all of which the Respondent amended despite previously agreeing that the Claimant could work from a particular office, with reduced hours and a parking space, to accommodate his childcare commitments.
On 13 November 2021, the Claimant met with the Respondent to discuss the role that had been advertised. During this discussion, the Claimant made the Respondent aware of his current role and its flexibility, explaining that this was something he required for childcare purposes. The Respondent agreed to employ the Claimant on a part-time basis on a pro-rated salary, and even offered to pay for a parking space close to the Respondent’s Hastings office so that the Claimant could easily take his children to school.
On 15 November 2021, the Respondent emailed the Claimant to confirm his starting salary and start date and the Claimant responded that he was handing in his notice to his current employer. However, four days before the agreed start date, the Claimant received a written contract of employment stating that he might be required to work from other office locations and asked to work such additional hours as were reasonable. The Claimant refuted these changes, but the Respondent refused to amend the contract sent out, stating that it was vital that the Claimant could, if needed, work from the Ashford office.
The Claimant argued that the Respondent’s change to his place of work was a breach of the implied term of trust and confidence. The Respondent submitted that there was no contract between the parties.
The Employment Tribunal agreed with the Claimant, noting that there is no requirement for an employment contract to be in writing: the Respondent had clearly made the Claimant an offer based on the 13 November discussion and email chain on 15 November, and the Claimant had clearly accepted that offer (by stating that he was handing in his notice, amongst other things). Therefore, the relevant elements of a contract had been established on 15 November (intention to create legal relations, consideration, offer and acceptance). To that end, the Respondent sending the Claimant a written contract of employment which altered his agreed place of work (albeit on an occasional basis) and refusing to amend this term amounted to a fundamental breach of the contract entitling the Claimant to treat the contract as terminated and, consequently, to resign.
Whilst the judge did not address damages in the judgment, she did point out that the loss would be attributable to the wrongful dismissal itself which, as indicated earlier in the judgment, would include compensation for the Claimant’s loss of notice period.
Key Takeaways for Employment Contracts
It is important to ensure that an employee’s written contract of employment honours any terms agreed outside the formal document, either orally or in writing e.g. by email, as failing to do so could result in a claim for breach of contract. Also, it is usually best to clearly document any key terms in writing at the outset to avoid any ambiguity as to the agreed position, but also to say that any terms offered during recruitment discussions are “subject to a formal contract being entered into”.