Which terms can be implied into an employment contract?

Authored by Heidi Roberts, Partner and Amanda Loftus, Lawyer, Corrs Chambers Westgarth. Updated by the LexisNexis Legal Writer team.

Contracts of employment contain both express and implied terms.

Express terms are those that are explicitly agreed between the parties, whether in writing, orally or a combination of the two. See Guidance Note: What importance do express terms have in establishing an employment relationship?

An implied term is a part of the contract even though it is not expressly agreed (or necessarily discussed) by the parties. Terms may be implied:

• in fact;
• by custom and practice;
• in law; and
• by statute.

Terms implied in fact or by custom and practice arise from the particular circumstances in which the parties entered into the contract and the manner in which they have applied it over time. A term implied by law derives from the fact that the common law assumes that all contracts that fall into a particular category (eg a contract of employment) contain an implied term dealing with a particular issue. However, a term will not be implied on any ground if it would be inconsistent with an express term of the contract.

A term implied by statute arises where a particular piece of legislation specifically provides for terms to be implied into contracts of employment.