by Breda O'Malley January-20-2022 in Employment Law

We are often asked by employers if some measure is adopted for, or concession is given to, its workforce, whether that will result in there being an established precedent, a new custom and practice or it being an implied contract term, which the employer will be obliged to follow in future. To answer this correctly, involves an analysis of the overall circumstances, and an application of a number of well established legal tests.

A recent Labour Court case involving Bidvest Noonan (Ireland) Limited, the cleaning services company, involved consideration of whether a particular payment term was implied into the worker’s employment contract. The Labour Court looked to the established case law which clarifies the tests to be met, if an employer or employee implies a term into an employment contract.

The ‘Officious Bystander’ Test

An ‘Officious Bystander’ is someone who is intrusively enthusiastic in offering help or advice. This is one of the tests to determine if a term of a contract is implied.  It involves answering whether the term of employment (whether in respect of pay, bonus, hours, holidays etc.) in question is so obvious, that it ‘goes without saying’; so that, if an ‘officious bystander’ were to have suggested it at the time of the contract being entered, the parties to the contract would have replied: “Oh, of course!”, about whether such a term should be implied into the contract.

This test was expanded upon in the Irish Supreme Court case of Sweeney Vs. Duggan. It held that any implied term must be necessary, so as to give effect to the contract.

The Custom and Practice Test

The second test to ascertain if a term is implied into a contract is to determine if there is an established “custom and practice”. This test was set out in the case of O’Reilly Vs. Irish Press. A provision can be implied into a contract by virtue of custom and practice, where the term is so notorious, so well known and acquiesced in, that it may be taken to be an implied term of the employment contract.

If you would like our support in assessing if something is an implied contract term, we can apply these legal tests with the benefit of our professional experience. Please contact Head of Employment Breda O'Malley or any member of our Employment Law team

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