Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Contract of employment definition

What does Contract of employment mean? A contract of employment is the agreement under which an employee personally performs work for an employer in return for pay and benefits, setting the terms that govern that relationship. In England and Wales and Scotland, it is defined by statute (Employment Rights Act 1996, s.230(2)) as a contract of service or apprenticeship, whether express or implied, oral or in writing; Northern Ireland uses equivalent wording (Employment Rights (Northern Ireland) Order 1996). In Ireland, legislation such as the Terms of Employment (Information) Act 1994 uses the same “contract of service” concept, developed alongside case law. Labels are...

Illegality in Employment Contracts: statutory rights, discrimination, ultra vires, contracting-out, confidentiality and whistleblowing, and restrictive covenants, with the Patel v Mirza proportionality analysis (UK)

Published by a LexisNexis Employment expert

Practice notes

Practice Note

This Practice Note explores the issues that arise around illegal or unlawful terms in employment contracts, including pay provisions intended to circumvent tax legislation, agreements with individuals who are not lawfully permitted to work in the UK, and arrangements to undertake work that is illegal or contrary to public Policy. It also analyses the consequences of Illegality, including where only one party is implicated, the absence of any requirement for knowledge of the illegality, and the continued ability to bring discrimination claims. The Note addresses the public interest dimension and the Supreme Court’s ‘trio of considerations’ identified in Patel v Mirza. Confidentiality clauses and the limits of contracting-out are examined as well. An employment contract can be tainted by illegality in the same way as any other agreement. Historically, one of the most significant areas of illegality has been covenants in restraint of trade, which will not be enforceable unless they fall within one of the lawful exceptions recognised under the common law principles on restraint of trade (see Post-termination restrictions (Restrictive covenants) below)...

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Web page updated on 21/05/2026

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