Rules in the workplace are not only driven by formal written policies. In most workplaces there are established patterns of behaviour, or unwritten rules, that influence employee behaviour and expectations. This type of undocumented standard is referred to as “custom and practice”.
In some situations, unwritten rules can become deeply ingrained in workplace culture. They can become an implied term of workers’ employment contracts.
Challenges can be encountered when employers wish to make changes to long standing implied contract terms, or when these unwritten rules are in conflict with employment contracts, or workplace policies.
Meaning of Custom and Practice
“Custom and practice” refers to behaviours, norms, or expectations that, although not explicitly outlined in a contract, are consistently upheld within the workplace over time. These practices can create implied contract terms which make unwritten changes to employment contracts.
For this to be the case though, the implied term must be a part of consistent and long standing workplace behaviours. It’s very challenging to satisfy the legal criteria to establish these unwritten rules as legally binding.
A court of law would not only look at the duration of a workplace practice. They would also look to establish that an external observer would reasonably conclude that both parties intended the practice to be a contractual right.
Custom and Practice in Employment Law
In UK employment law, there are a number of criteria which would need to be met in order for unwritten terms to form part of a contract of employment.
The practice must meet the following criteria:-
- Long Standing: The practice has to be in place for a significant period, but there’s no specific length of time defined in law.
- Consistent: The practice must be consistently applied and shouldn’t be sporadic or arbitrary.
- Automatically received: Employees should regularly benefit from this practice without the need for negotiation.
- Known and Expected: It must be a widespread practise, known to both employees and management, and expected to continue in future.
- Intention of Legal Force: An outside observer, assessing the behaviour of employees and employers, should reasonably conclude that both parties intended the practice to be a contractual obligation or right. This intent is often the most challenging aspect to prove.
If you’re concerned about how a common workplace practice might affect you, a good starting point is to make sure you understand your employment contract. Read it, and any workplace policy documents and compare those to any unwritten, long standing rules in your workplace.
Custom and Practice Examples
Here are some common workplace practices that could be considered implied contractual terms under custom and practice principles:-
- Early Finishes on Set Working Days: Staff may finish early every Friday or are allowed to come in later on a Monday. This isn’t written within the contract but has become the norm as it happens every week.
- Additional Leave: Many workplaces finish at lunchtime on Christmas Eve, for example. This may well not be part of the contract but it is an expected part of the company’s culture. There may also be a practice of providing extra leave days after certain bank holidays.
- Flexible or Remote Working: Again, while not necessarily set out in the contract, it may become part of the working routine to do some flexible or remote working.
- Bonus Payments: When bonuses are handed out yearly to all employees without fail, this becomes a common practice.
- Sick Pay: If employers have been consistently paying enhanced sick pay, over and above SSP rates, then this could be considered an implied term.
- Breaks: If employees have routinely been allowed a longer lunch break, or more frequent breaks than stipulated in their contract, this can become an implied contractual right.
Changes to Employment Contracts
Employees might seek to include any unwritten, implied terms from custom and practice into their formal employment contracts. Doing so can help maintain expected conditions and prevent abrupt changes.
However, employers are not obliged to incorporate these terms into the contract. The minimum requirement for an employment contract is to have essential details, such as the rate of pay, contracted hours, and work schedule.
When a workplace change has occurred consistently without any objection from staff, the employer might perceive this as acceptance of the change. In certain instances, the employer might choose to formally include such changes in the contract, provided there are no disputes. While this isn’t a common occurrence, it does happen.
Unwritten rules that are consistently followed in the workplace are considered part of an implied contract. This takes place when all parties seemingly consent to and acknowledge these practices as part of the work routine and culture. These changes might be incorporated into the employment contract, but it isn’t a necessity.
Often, formalising such changes in the contract doesn’t necessarily yield additional benefits and can lead to objections about changes to the work contract from some parties. If all parties are content with the existing arrangements, maintaining an informal approach can sometimes be more beneficial.
When Does Custom and Practice Become Contractual?
Understanding custom and practice is the first step towards recognising how unwritten workplace rules can become part of a contract. But when can such practices be considered part of a legally binding contract?
in fact, there’s no defined timeframe in UK law to help define when custom and practice transitions into a contractual obligation. Implied terms rely heavily on mutual trust between the employer and the employees. Often, this arrangement operates smoothly without any conflicts.
However, there can be instances of confusion or misunderstanding. Custom and practice typically become part of the contract once the specific behaviour is repeated consistently over a period of time without interruption.
But, whether a practice has indeed become a contractual term is often a complex matter. Determination usually requires an employment tribunal’s judgment, which reviews the specific facts and circumstances of the case.
Resolving Disputes
Employers should aim to establish explicit and unambiguous contract terms, leaving no room for misunderstandings.
However, it’s not uncommon for unwritten rules, stemming from custom and practice, to emerge and persist over years without any formal documentation. Such scenarios can lead to disputes, complicating the workplace environment. Fortunately, there are practical ways to manage and prevent potential conflicts before they escalate.
The absence of written agreement makes a rule vulnerable to dispute, highlighting the importance of express contract terms. Such terms clearly define the expectations and responsibilities for all parties involved, reducing ambiguity and the potential for conflict.
Should an employee raise a grievance regarding an implied term, the employer should adhere to their standard grievance procedure. The complaint should be documented, and a meeting held between relevant parties to seek an informal resolution.
Employer Tips For Avoiding Custom and Practice Confusion
Custom and practice in the workplace aren’t necessarily negative. Often, such traditions can unify a team. This is especially so when they are beneficial such as half-day Fridays, which can enhance staff morale. However, it’s crucial to manage these practices effectively to avoid misunderstandings and disputes.
Here are some proactive strategies for employers:
- Conduct Regular Contract Reviews: Ensure employment contracts are reviewed regularly to keep up with any changes in practice or expectations.
- Establish Clear Express Terms from the Start: Having detailed and unambiguous terms in the contract from the outset can help avoid confusion later.
- Formalise New Routines: If a new practice is universally accepted and consistently followed, consider adding it to the contract.
- Include a Flexibility Clause: Incorporating a clause in the contract that allows the employer to make necessary changes can provide some flexibility and control.
- Communicate About Custom and Practice: Ensure information about existing customs and practices is readily available to all employees.
- Maintain Transparency: Be open and honest about the implications of custom and practice, and how it impacts both the employer and employees.
- Onboard New Employees Effectively: When a new employee joins the team, ensure they understand the written and implied terms of their employment contract.
Implementing these strategies can help maintain a harmonious workplace environment and minimise potential disputes.
