Introduction to this document

Personal property clause

Use our personal property clause to set out the employee’s responsibility for taking care of their own personal belongings and to restrict your liability in respect of loss or damage to those personal belongings insofar as this is possible under the Unfair Contract Terms Act 1977.

Unfair Contract Terms Act 1977

Exclusions or restrictions of liability for death or personal injury caused by negligence are legally void and unenforceable under the Unfair Contract Terms Act 1977. So it’s pointless having a contractual term that says you won’t be responsible for any personal injury that an employee might sustain whilst at work - it’s not worth the paper it’s written on! If you’re negligent (including being vicariously liable for the negligence of your staff) or in breach of a statutory health and safety duty and this causes an employee’s injury or death, you’ll be liable. However, in relation to exclusions or restrictions of liability for negligence for any other kind of loss or damage, or for breach of contract, these are subject to a test of reasonableness.

Reasonableness requirement

The requirement of reasonableness means that, in relation to a contract term, the term must have been a “fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known or in the contemplation of the parties when the contract was made”. In relation to a notice that doesn’t have contractual effect, the requirement of reasonableness is that it should be “fair and reasonable to allow reliance on it, having regard to all the circumstances obtaining when the liability arose or (but for the notice) would have arisen”. It’s up to the person who claims that a term or notice is reasonable to show that it is. It won’t be reasonable to simply exclude your liability for loss, damage or theft of an employee’s personal belongings whilst they’re on your premises. This type of clause will be unfair. You shouldn’t exclude liability for loss, damage or theft which results from your own negligence, for example, you’ve failed to implement elementary security precautions. An employee should have some redress against your negligence even where they might be partly at fault. Our Personal Property Clause makes clear that the employee is primarily responsible for looking after their own personal belongings brought on to your premises. They are then advised to lock them securely away and never to leave them unattended where they’re unable to carry them on their person. Unfortunately, we can’t then provide that you won’t be liable under any circumstances for any loss, damage or theft of personal property, so what we’ve done instead is provide that your liability to compensate the employee is limited to a reasonable amount, having regard to such factors as whether the loss, damage or theft was due to the company’s negligent act or omission. This should satisfy the test of reasonableness.