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When running a small business, you need to be aware of the laws which affect your business. This includes employment law, a fast-changing area of law. However, rules relating to employment are not always written in law or express terms in your employment contracts. Therefore, one area you need to be aware of as an employer is custom and practice. Not following rules regarding this can cause a breach of contract and mean you could face the Employment Tribunal. This article will explain custom and practice in employment and how it might affect your obligations as an employer.
What is Custom and Practice in Employment?
Custom and practice can apply in employment through:
- companies;
- trades; or
- industry cultures.
It is where events or benefits concerning the above have become the ‘norm’ but are not directly referred to in employment contracts or business policy documents. Although these are not expressly written into your employment contacts, they can be so apparent that they become an implied term. One example may be a duty of confidentiality between you and your employee.
What Could Count as Custom and Practice?
There are many different possibilities for custom and practice in employment. For example, as an employer, you may give a bonus to staff at Christmas, which you have been doing for many years. In addition, the following can all be examples of custom and practice:
- overtime policies;
- finishing work early on a Friday;
- working overtime;
- offering enhanced redundancy payments;
- a prohibition on drinking alcohol during working hours; and
- a flexible working policy.
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Do I Have to Honour Custom and Practice?
It may not be your intention as an employer to make an applicable custom and practice a norm in the workplace. However, if it has turned into an implied term of your employment contracts, you will have to. There is no set list of which customs and practices are implied terms, and it can be difficult to find relevant legal decisions relating to this area. Instead, only an Employment Tribunal can decide. It is helpful, however, for you to note that they may determine a particular custom or practice as an implied term, where it is:
- carried out over a long time (although no exact time exists), making it well-established;
- applied consistently to all your employees since it first started; and
- all your employees know of it and expect it to occur.
Therefore, the Employment Tribunal is looking for evidence that you, as an employer, intend for the custom or practice to be part of your employees’ contracts.
Can I Change Custom and Practice?
As an employer, you must be careful when trying to change customs or practices in the workplace. You may, for example, no longer want your staff to leave early on a Friday, but if this has become an implied term of their employment contract, you must act with caution. This is because an implied term is part of the employment contract, and changing it without agreeing with your employees first constitutes a breach of the contract. Also, as an employer, you must act reasonably towards your employees. Therefore, if you unreasonably change a custom or practice, you could also breach your employment contract.
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Key Takeaways
Custom and practice are where events and benefits in your business, industry area, or trade become the norm, but are not actually written rules. Specific terms and practices can become implied terms of your employment contracts, and the Employment Tribunal can determine this based on three key factors. If a practice or custom has become an implied term of your employment contract, you must honour it. Otherwise, it will be a breach of the employment contract.
If you need help understanding customs and practices in employment in the UK, LegalVision’s experienced employment solicitors can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. So call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
Customs and practice are events and benefits that have become the ‘norm’ in employment, such as through companies, trades, or industry cultures.
If a custom or practice in your business has become an implied term in the employment agreement, you must follow it. Otherwise, it is a contractual breach.
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