Follow up

Whole agreement

[Clause]

The Equality and Human Rights Commission v Earle 2014

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Should you include a whole agreement clause in contracts?

WHOLE AGREEMENT

A whole agreement clause, sometimes called an entire agreement clause, is one which states that the written employment contract contains the entire agreement between the parties in relation to the employment and that it also supersedes and extinguishes any previous oral or written agreement, promise, representation or understanding between the parties (see Follow up ). It effectively stops the employee from claiming that there are other promises and terms to the employment contract that are not written into it.

Pro advice 1. The clause can be used to exclude any prior discussions you may have had with the employee, or anything you may have stated in the job offer letter, in favour of the written employment contract only.

Pro advice 2. It can also be used to supersede an earlier employment contract where a new one has been agreed. Put the clause in a prominent place and ensure the employee signs the contract to agree to it.

The clause can’t, however, be relied on to exclude any terms implied by law that are overriding, e.g. the right to receive at least the national minimum wage.

Pro advice. As the clause excludes all oral and written agreements, promises, etc. made before the date of the employment contract, ensure these are covered in the contract if they’re still to be valid.

CASE LAW

A couple of recent cases demonstrate the benefits of including a whole agreement clause in employment contracts. In The Equality and Human Rights Commission v Earle 2014 (see Follow up ), Ms Earle (E) was assured during the recruitment process by an HR officer that her salary would increase by annual increments, subject to her satsifactory performance. However, her employment contract contained a provision for an annual salary review but an absolute discretion for the Equality and Human Rights Commission (EHRC) as to whether to award a salary increase. Due to severe financial constraints, the EHRC introduced a pay freeze and E didn’t receive a salary increase. She claimed breach of contract, relying on what she’d been told by the HR officer. The Employment Appeal Tribunal held that whilst there was an obligation on the EHRC to conduct a salary review, there was no obligation to increase E’s salary. The HR officer’s assurance didn’t have any legal effect as it had been superseded by a clause in E’s employment contract which stated that: “ This contract supersedes any previous oral or written agreement between the EHRC and you in relation to the matters dealt within it. It contains the whole agreement between the EHRC and you relating to your employment…” .

Similarly, in Paturel v DB Group Services (UK) Ltd 2016 Mr Paturel (P) was told during the recruitment process that his discretionary bonus would be between 5% and 10%. However, his appointment letter made no mention of discretionary bonuses and it contained a whole agreement clause. He was only awarded a bonus of 1% (much less than two of his colleagues) and so he claimed breach of contract. On the whole agreement point, the High Court ruled that the clause superseded any representation made to P during his recruitment.

Pro advice. Don’t make promises or representations during the recruitment process unless you intend to keep them - you don’t want to end up in court!

Whole agreement clause

The Equality and Human Rights Commission v Earle 2014