Implied terms: common law duties

Implied terms: common law duties

Among the “implied terms” in all employment contracts/agreements are certain “common law duties” which employers owe their employees and vice versa. In other words, each party owes the other certain common law duties as implied terms within their employment contract/agreement.

Common Law Duties of Employers include:

Duty to Pay
    • The employer has a duty to pay the agreed wages/salary to the employee if the employee reports ready and willing to work. Hence, unless the express terms of the contract provide otherwise, if an employee is ready and willing but is unable to work because of some logistical or organisational difficulty, the employer still has a duty to pay the wages (This duty to pay will apply in such circumstances unless there is a clear “frustration” of the contract).
Duty to Pay on Time
    • The employer is obliged to pay the agreed wages or salary at the agreed interval (even if the employer must borrow to do so).
Duty to Reimburse
    • The employer has a duty to reimburse the employee for all work-related expenses incurred by the employee in carrying out the employer’s business (actual and reasonable).
Duty to Provide a Safe System of Work
    • The employer is obliged to provide a safe system of work so that the health and safety of employees is not endangered (this includes ensuring adequate training and supervision of employees).
Duty to be Fair and Reasonable
    • The employer has a duty to treat all employees in a fair and reasonable fashion in accordance with the principles of natural justice and to provide all legal entitlements to employees.

Common Law Duties of Employees

Duty of Personal and Exclusive Service include:
    • The employee is obliged to be ready and willing to work on time, must be prepared to do the work personally (i.e. he/she cannot send a substitute to do his/her work) and must devote all the contractual hours of work to the employer’s business.
Duty of Obedience
    • There is a duty on the employee to obey all lawful and reasonable instructions of the employer (providing the task is neither dangerous, nor impossible nor outside his/her terms of employment or outside his/her skill limitations).
Duty of Reasonable Care
    • The employee has a duty to exercise reasonable care and skill in carrying out his/her job (Note: it is also an implied condition of employment that, where properly trained and supported, a person taking on skilled work has the necessary skill and is reasonably competent.)
Duty of Faithful Service
    • The employee has a duty to work honestly and faithfully for his/her employer. (Note: This obligation includes not disclosing trade secrets, not working against the employer’s interests, not accepting rewards from third parties without the employer’s consent, not operating a business in conflict with the employer’s interests).
Duty to Account
    • The employee must account to the employer for all moneys and property entrusted to his/her care and account for all matters within his/her responsibilities which affect the employer’s interests.

Even though such common law duties may not be expressly set out in writing in the employment contract/agreement (or are not incorporated as a set of written Company Rules or Policies) they nevertheless form an essential part of the contract as implied terms. A failure to honour any such common law duties may constitute a breach of contract (and/or personal grievance) sufficient to give rise to legal action by the aggrieved party.