Pre-Employment Talks Can Form a Contract

Article excerpt

CONVERSATIONS when interviewing prospective employees may form part of the employment contract if that person is subsequently employed.

Pre-employment negotiations offering comforting words of security, a future with the company or "being looked after if made redundant" may be relied upon by an employee to make a claim under the Trade Practices Act, to seek damages due to breach of contract or to claim a higher entitlement on termination.

In a claim by an employee for a higher severance payment, verbal comments made by a manager while negotiating the employee's employment were recently found to form part of the employee's contract.

The employee alleged she was told the employer had a generous redundancy policy compared to industry standards. She was told the employer would look after her should she become redundant, and as a matter of policy didn't include redundancy provisions in its contracts.

Whilst the terms of employment were agreed in the conversation, the written contract didn't include a redundancy provision.

Neither did a second contract issued four years later when the employee was promoted.

On redundancy, the employee was offered one month's severance pay which she rejected, claiming the company told her she would receive three weeks' salary per year of service if made redundant. …