What is Custom & Practice, how does it affect the contract of employment ?

What is Custom & Practice in a contracts of employment ?

When dealing with employment contracts, “custom and practice” refers to unwritten practices that have become an accepted part of an employment relationship over time. Even though they might not be explicitly mentioned in the written employment contract, customs and practices can effectively become implied terms if they have been consistently applied over a considerable period of time.

For a custom or practice to become an implied term of the contract, it must be:

• Longstanding: The custom or practice has been in place for a considerable period of time.
• Consistent: The custom or practice is consistently and regularly applied.
• Known and Accepted: Both the employer and employee are aware of the custom or practice and treat it as if it were a contractual term.

Examples: Common examples of customs or practices in the workplace might include:

• Providing a Christmas bonus every year.
• Allowing employees to leave early on certain days.
• Granting additional leave beyond the statutory or contractual requirement.
• Paying sickness benefits over and above the statutory minima

It’s essential for businesses to be aware of any customs or practices they implement. Even if these practices are well-intentioned, they can inadvertently lead to legal obligations if not managed correctly.

If an employee believes that a term has been implied into their contract through custom and practice and the employer disputes this, it may become a matter for a court or tribunal to decide. They will consider factors like duration, consistency, and the understanding of both parties.

Can I change custom and practice within my business ?

If an employer wishes to change or end a custom or practice that has become an implied term, it’s typically necessary to consult with employees and may require renegotiating aspects of their employment contracts.

How do I prevent custom and practice becoming part of a contract of employment?

Avoid ambiguity by have professional contracts of employment state that the provisions of the contract are exhaustive and that no customs or practices form part of the contract unless specifically included in writing.

In summary, custom and practice in employment can create obligations just as binding as written contractual terms. It’s essential for both employers and employees to be aware of this and to communicate clearly about any customs or practices in the workplace.