HRM Unit 2.1

When an employer and a worker (usually called an “employee” in this context) strike a bargain in the labour market and the worker commences work, the employer and worker have entered into a contract. A contract is a legally enforceable promise or set of promises made between two parties.

For example, a very simple contract may entail a worker agreeing to be available from 9 to 5, five-days per week, to perform front counter duties at a fast food restaurant in exchange for an hourly wage of $20. This type of contract between workers and employers is called a “common law contract of employment.”

Sometimes, disputes can arise about the terms of a contract. For example, can the employer direct the front counter worker to clean out the deep fryer during a slow period? When such disputes cannot be worked out between the parties to the contract, they are sometimes settled in court.

Often, the contents of an employment contract will not contain the information necessary for the court to determine what was agreed to between the parties. This reflects that few employment contracts contain more than the most basic terms of employment (e.g., job title, pay rate, vacation entitlement, etc.).

In such cases, the courts turn to the common law (i.e., the results of previous legal decisions) to determine the rights and obligations of the employer and worker. The common law is complex, but some rights and obligations are assumed to be part of every employment contract unless the contract includes specific language to the contrary (Doorey, 2016).