The psychological contract and implied contractual terms

Purpose – For longer than most people would think, over 40 years, organisational psychologists have been defining and characterising the employment relationship in terms of the psychological contract. Across the same period, judges have through their decisions in legal cases been setting down implied terms that apply to all contracts of employment. Accompanying this development certain commentators, drawn from both academic and practitioner backgrounds have been analysing these terms in considerable detail. The purpose of this paper is to analyse the nature and importance of the concept of the psychological contract and consider its application in the context of the most important implied terms in the contract of employment. Design/methodology/approach – This article was written from a review of the secondary sources of the two disciplines covered. It was only possible to give an overview of the key areas and their influence and given that these two areas had not been analysed together before there was little material available to refer to. The underlying question is how complimentary and compatible are these concepts? This is fully considered through analysis of the effect of their combination in explaining or de‐limiting the employment relationship and the contract of employment. Findings – It is contended that as both these contracts have in some respects a common purpose it seems an opportune time to reflect on their role and their potential, if any, for combined utilisation in the workplace. Originality/value – It is contended that this research is important as it analyses the nature and impact of two different contractual models that characterise and regulate the employment relationship. These models are drawn from two separate disciplines and as far as this commentator is aware this is the first time this specific form of analysis has been undertaken.