lOMoARcPSD|7563097

Implied term

Labour Law (Multimedia University)

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Implied term
Reigate v Union Manufacturing Company (Ramsbottom) Limited and Elton Cop Dyeing Company
Ltd [1918] 1 KB 592 605
"The first thing is to see what the parties have expressed in the contract; and then an implied term is
not to be added because the court thinks it would have been reasonable to have inserted it in the
contract. A term can only be implied if it is necessary in the business sense to give efficacy to the
contract; that is, if it is such a term that it can confidently be said that if at the time the contract was
being negotiated someone had said to the parties, 'What will happen in such a case,' they would both
have replied, 'Of course, so and so will happen; we did not trouble to say that; it is too clear.' Unless
the court comes to some such conclusion as that, it ought not to imply a term which the parties
themselves have not expressed."
The agreement was to employ the plaintiff as agent for the seven years, and a term could not be
implied to the effect that the company could terminate the agency at any time by ceasing to carry on
their business; and that the circumstances, coupled with the voluntary winding up, showed a
repudiation by the company of the agreement, and they were therefore liable in damages for the
breach.
Appuhamy v Dato' Ajit Singh [1970] 1 MLJ 194
The appellant employed by the respondent as a master cutter. The appellant fell ill in 1965 and was in
hospital from June to November. He retired from the respondent's service by mutual consent on 23rd
February 1966. The respondent had entered into a collective agreement with the trade union of his
employees, which provided for payment of salary during illness, medical expenses and retiring
benefits. The appellant was not a member of the trade union. He had not been given any notice of
terminating his service and he had not been paid any salary since July 1965. It was held by this court
that in all the circumstances of the case there was no term expressed or implied that no salary was
payable during incapacity and that therefore the respondent was liable to pay the appellant his salary
during his absence from work through illness as the contract had not been determined by proper
notice.
Gold Coin Limited v Tay Kim Wee [1987] 2 MLJ 271
The respondent employed by the appellants, one of the terms provides for commission is
“Commission: After the development of sales of Equipment and Chicks, a certain amount of
Commission will be given from the profits.” The respondent work in the hatchery division of the
appellants, it performed well and respondent was contributed massively. However, after respondent
claim for commission after his resignation, the appellants refused to give. The court held the
respondent is entitled to the commission. The appellants appeal.
the claim to a quantum meruit in the present case was contractual in nature. The implied promise to
pay a reasonable commission, as found by the learned judge, is and should properly be treated in the
same way as other implied terms in the law of contract. a fair reading of the entire letter of
appointment supported the conclusion that it was the intention of the parties that the respondent was
to receive in addition to salaries and other benefits an incentive based on the profits of the Hatchery
Division earned from year to year. The express provision for the payment of a commission which
fails as a binding agreement because of the absence of the essential term as to the amount or rate of

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the commission was nevertheless a substantial factor in support of the implication of a contract to
pay a quantum meruit;

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