ESM8455 - Opinions on contracts: oral contracts

In most cases where we are asked for an opinion on a contract, there will be a formal written agreement. However, there will be cases where there is no written agreement, only an oral one. Whilst this may only occur in a few cases, we have undertaken to help workers to understand whether their engagements are covered by the legislation and therefore have to give opinions on such contracts.

When someone says that they do not have a written contract and asks for an opinion on an oral contract we will require them to provide:

• written details of all of the agreed terms and conditions of the agreement; and
• a letter from the client confirming that the terms and conditions, as provided by the worker, are correct

The opinion should be given on the basis that the terms and conditions of the agreement are as set out in the written details.

The terms that you would typically expect to see would include:

• Names and addresses of parties to the agreement
• Date of commencement and termination of the agreement
• Basis of payment and rate of payment
• Nature of services to be performed and by whom
• Location where duties are to be performed
• Rights to terminate contract by both parties
• Holidays, sickness arrangements etc

You should note that this is not meant to be an exhaustive list. What you want to establish are the terms and conditions relevant to the case law test for determining employment status.