Importance of Implied Terms in an Employment Contract

In the world of employment contracts, it is important to consider the inclusion of implied terms. These are terms that may not be explicitly stated in the contract, but are nonetheless understood by both parties to be part of the agreement. While some may overlook the need for implied terms, they can play a crucial role in setting expectations and avoiding disputes.

One such implied term is the duty of mutual trust and confidence. This means that both the employer and employee are expected to act in good faith and not undermine each other`s interests or obligations. For example, an employer cannot create a toxic work environment or unreasonably withhold promotions or pay raises. Likewise, an employee cannot disclose confidential information or act in a way that harms the company`s reputation.

Another important implied term is the duty to provide reasonable notice of termination. Without this term, an employer could terminate an employee`s contract without warning or cause, which would be unfair and potentially harmful to the employee`s livelihood. By including this term, an employer is expected to give reasonable notice of termination, or pay in lieu of such notice, to allow the employee to find alternative employment.

In addition to these implied terms, there are others that may be relevant depending on the industry or nature of the work. For example, the duty to maintain confidentiality may be critical in a field that deals with proprietary information, while the duty to protect the health and safety of employees may be crucial in a job that involves physical labor or hazardous conditions.

By including implied terms in an employment contract, both parties are clear on their obligations and expectations. This can prevent disagreements or misunderstandings down the line. It also reflects a level of professionalism and mutual respect, which can contribute to a positive working environment.

In conclusion, the importance of implied terms in an employment contract cannot be overstated. They provide clarity and protection for both the employer and employee, and can prevent conflicts or disputes. When drafting or reviewing an employment contract, it is important to consider including relevant implied terms to ensure a fair and productive working relationship.