What Is an Implied Employment Contract
In the world of employment law, there are two types of employment contracts: explicit and implied. An explicit contract is a written agreement between an employer and employee that lays out all the terms of the employment relationship, while an implied contract is an unwritten agreement that arises from the behavior of the employer and employee.
An implied employment contract is typically created when an employer makes certain promises or commitments to an employee, either verbally or through actions, and the employee relies on those promises or commitments. For example, if an employer promises an employee job security or a certain level of compensation, the employee may reasonably assume that these promises are part of their employment relationship.
Implied employment contracts can be found in a variety of situations, including:
– Oral promises made during the hiring process (e.g., “you`ll have job security as long as you meet your performance goals”)
– Company policies or employee handbooks that suggest continued employment is tied to good performance
– Long-term employment relationships that have developed a pattern of behavior that suggests ongoing employment (e.g., an employee who has consistently received promotions and salary increases)
It`s important to note that not all promises or commitments made by an employer create an implied employment contract. In order for an implied contract to exist, there must be a clear and definite promise made by the employer, and the employee must reasonably rely on that promise.
From a legal standpoint, implied employment contracts can create some challenges for both employers and employees. For employers, an implied contract can limit their ability to terminate an employee without cause. If an employer has made promises that suggest job security or ongoing employment, terminating the employee without good cause could be seen as a breach of that implied contract.
For employees, an implied contract can provide some measure of protection against arbitrary termination. However, it`s important to remember that an implied contract is still subject to the employment-at-will doctrine, which allows employers to terminate employees for any reason (except unlawful discrimination or retaliation) as long as there is no explicit or implied employment contract in place.
In summary, an implied employment contract is an unwritten agreement that arises from the behavior of the employer and employee. It can be created by promises or commitments made by an employer that an employee reasonably relies on. While implied contracts can provide some measure of protection for employees, they are subject to the employment-at-will doctrine and can create challenges for both employers and employees.
