When it comes to employment agreements, there are two main types of contracts: express and implied. While both may be legally binding, there are distinct differences between the two that can impact the rights and obligations of both the employer and the employee.
Express contracts of employment refer to written agreements that explicitly outline the terms and conditions of employment. This could include details such as job duties, salary, benefits, and the length of the contract. Express contracts are often used in industries where job security and clear expectations are highly valued, such as academia, medicine, and law.
One of the primary benefits of an express contract is that it provides both parties with a clear understanding of their rights and responsibilities. If either the employer or the employee fails to uphold their end of the agreement, there is a legally binding document that can be used to resolve disputes. Additionally, express contracts may include provisions for severance pay or other forms of compensation in the event of a termination.
On the other hand, implied contracts of employment are not necessarily written agreements. Instead, they are based on a set of behaviors, customs, or patterns that suggest an employment relationship exists. For example, an employee who regularly receives a paycheck, is given assignments by a supervisor, and is expected to adhere to company policies may be considered to have an implied contract.
One of the biggest risks associated with implied contracts is the ambiguity surrounding the terms of employment. Unlike express contracts, there may be no clear guidelines regarding job duties, salary, or benefits. This can make it difficult for either party to establish their rights in the event of a dispute or termination.
Another potential issue with implied contracts is that they may be created unintentionally. Small business owners or managers who fail to clearly communicate the terms of employment with their staff may inadvertently create an implied contract. This can be problematic if the employer later wants to change the terms of employment or terminate the employee.
In summary, express and implied contracts of employment differ in their level of formality, clarity, and enforceability. While express contracts provide clear guidelines for both parties, implied contracts can be more ambiguous and less secure. Employers should carefully consider their needs and risks when deciding which type of contract to use, and ensure that all parties are aware of the terms of employment from the outset.