The A-Z of Employment Law
A – Agreement
B – Breach of Contract
C - Contract
D – Dismissal
E – Equal Opportunities
F – Flexible Working
G - Grievances
H - Holiday
I – Information/Consultation
J – Job Adverts
K – Key Workers
L - Liability
M – Maternity/Paternity
N – National Minimum Wage
O - Overpayments
P – Part Time Workers
Q – Qualifying Period
R - Redundancy
S – Statutory Notice
T - TUPE
U - Unions
V – Variation of Contract
W – Working Time Regulations
X – X employees - References
Y – Why comply?
Z – Zebra
A – Agreement
Employees are entitled to a written statement of their main terms of employment within two months of the commencement of their employment, under s.1 of the Employment Rights Act 1996. This is the basic agreement upon which the employment relationship is based; alongside the additional employment protection that is contained in statute. s.1 specifies a number of things that must be included in the statement of terms of employment. For example, hours of work, rate of pay, place of work etc.
B – Breach of Contract
Like any other contract, the employment contract is capable of being breached by either party, the employer or employee. A breach is when a term of the contract is broken. When an employer commits a fundamental breach an employee can treat it in a variety of different ways from accepting it to resigning and claiming constructive dismissal. An employer can react to a fundamental breach by an employee in a variety of ways from disciplining the employee to dismissing them without notice. The reaction to a breach will obviously depend on the severity of the breach and must be proportionate. There may be the potential for claims in the civil courts as well as the Employment Tribunal. The maximum amount that a Tribunal can award in respect of a pure breach of contract is £25,000.00. If the contract claim is for an amount over £25,000, the full amount can be claimed in the High Court.
C - Contract
An employment contract, like any other, can be made orally or in writing or a combination of both, subject to the written statement of terms that every employee is entitled to receive (see ‘A - Agreement’ above). It helps everyone concerned to know where they stand if it is in writing however! A contract can be made-up of a combination of express and implied terms, for example there may be an express term specified in writing requiring the employee not to disclose confidential information. There is also an implied term that the employee will work with due diligence and care. (See B – Breach of Contract). A contract of employment can be terminated by agreement, expiry of a fixed term, completion of a task, by resignation or by dismissal, subject to possible consequential claims.
D – Dismissal
Dismissal of an employee by an employer brings the contract of employment to an end. There are legitimate reasons for dismissal however even if there are fair and lawful reasons for dismissal if the dismissal is carried out incorrectly i.e. in breach of the statutory dismissal procedure the employee may still be entitled to bring a tribunal claim for unfair dismissal. The Tribunal can award an uplift to any compensatory award of up to 50% due to a failure to abide by the statutory procedure. However this is currently being reviewed under the Employment Bill. Redundancy and retirement are examples of dismissal that are potentially fair but only if they are carried out correctly.
E – Equal Opportunities
All employees have the right to work free from unlawful discrimination and to achieve their full potential in their jobs. Employers should have an Equal Opportunities Policy to make it clear to all their employees that unlawful discrimination of any kind will not be tolerated. It is possible for employees to bring a claim against the employer for the following types of discrimination under the following legislation as amended:-
Gender (including gender reassignment)
Race or Religion
Age
The hours they work
Sexual Orientation
Trade union membership
Disability
Sometimes a disability results from an accident or the discrimination may have caused stress which may also be claimed as a personal injury claim.
Employees who believe they have been discriminated against for any of these reasons are entitled to make a claim to an Employment Tribunal regardless of their length of service with the employer. Employees must make their claim within three months less a day of the discriminatory conduct complained, therefore a speedy reaction to the discrimination is required.
It is also particularly important that employers do not indirectly discriminate, i.e. they must not apply a condition or requirement or operate a policy, procedure or practice, which has a substantially greater adverse impact on the employee by reason of, for example, their sex, their race, their religion etc. There is no limit on the amount of compensation that a Tribunal can award in discrimination cases.
Victimisation is something that employers must avoid i.e. treating an employee to their detriment or badly because they raised a complaint of unlawful discrimination in the first place.
F – Flexible Working
Employees who are responsible for caring for a child who is under 6 years old (or under 18 years old if the child has a disability) can apply to change their hours, times and location of work, providing they have 26 weeks continuous service with the employer at the date of request.
When dealing with a request, employers must act accordingly to a statutory set timetable and above all must take the request seriously. Employers must have a ‘clear business reason’, as defined by the Statute, for rejecting the request, and must do so in writing. On 6 April 2007 the Flexible Working (Eligibility, Complaints and Remedies) (Amendments) Regulations 2006 extended the rights to people who care for adults. On 6 November 2007, the Government announced it was now considering a further extension to flexible working rights.
G - Grievances
All employers must have a statutory minimum grievance procedure. In addition there is a statutory right for all employees to be accompanied at disciplinary and grievance hearings, not only by a fellow employee, but by a trade union representative, regardless of whether or not the employer recognises that particular trade union. There is no right to accompaniment at an investigatory meeting. Either of these representatives may make a statement on behalf of the employee and ask questions on their behalf but they may not answer questions put to the employee. In most circumstances employees must have first raised a grievance with their employer regarding their employment dispute otherwise the Tribunal will reject any tribunal claim they try to bring. This is under review as per the Dismissal and Disciplinary Procedures.
H - Holiday
Under the Working Time Regulations 1998, every worker is entitled to 4 weeks paid leave every year. The right to holiday starts to accrue from the first day of employment. Employers can currently include the 8 days bank holiday within this four-week entitlement but this is set to change. From 1st of October 2007 the minimum entitlement rose by an additional 4 days and then on 1st April 2009 it will increase by another 4 days to account for the 8 days statutory bank holidays.
I – Information/Consultation
From 6th April 2008 the Information and Consultation of Employees (ICE) Regulations 2004 extended the duty to inform and consult with employees to businesses with at least 50 employees. Employers with this many employees must consult the employees regarding all business decisions that will impact upon them. If 10% or more of the workforce request consultation the Employer must set up a consultation forum or risk fines of up to £75,000.
J – Job Adverts
Claims concerning unlawful discrimination can be made against an employer by job applicants if the job advertisements indicate a preference for candidates on the grounds of, for example, sex or race. Job adverts must therefore be worded carefully! There is potential for legitimate positive discrimination, however, this must be approached with caution and upon advice.
K – Key Workers
Many businesses have certain employees who they rank as particularly important to the business and who may be difficult to replace easily – the 'key workers'. It is important to consider how easy it would be for that employee to walk away from their job and what impact this would have on the business. In order to manage this impact it is advisable to think about including a notice period that is lengthy enough (within reason!) to allow the employer to find a replacement employee, as well as confidentiality clauses and restrictive covenants to cover the actions of the employee after they have left.
L - Liability
Tribunals do have the power to award costs against either party but in reality this does not happen often. Therefore, when embarking on Tribunal proceedings it is better to assume that both parties will bear their own costs in a Tribunal action. For enforcement of a Tribunal award the Order needs to be enforced in the County Court.
M – Maternity/Paternity
Maternity Leave from 1st April 2007
All pregnant women whose expected week of childbirth begins on or after 1st April 2007 are entitled to both Ordinary Maternity Leave (OML) of 26 weeks' and Additional Maternity Lease (AML) of 26 weeks' (totalling 52 week’s leave). [Where the expected week of childbirth began before 1st April 2007 all such employees have the right to OML (26 weeks), but only those employees who have accrued at least 26 weeks of continuous employment by the start of the 15th week before the baby is due have a right to the additional 26 weeks of AML.]
If the pregnant lady has been employed by the same employer without a break for at least 26 weeks into the 15th week before the week the baby is due, then subject to the earnings threshold, she will be entitled to 9 months (39 weeks) Statutory Maternity Pay (SMP). The legislation to extend SMP, Maternity Allowance and Statutory Adoption pay from 39 weeks to 52 weeks, and to introduce Additional Paternity Leave and pay, is to be delayed by a further year, and will now not be implemented in respect of any babies due before April 2010.
The first 6 weeks (1 ½ months) of OML is paid at 90% of the employee’s average earnings (subject to thresholds) as before, with the remainder of the extended period of 33 weeks (7½ months) paid at the rate of SMP. SMP is set by the Government annually and will increase from £112.75 to £117.18 per week as from April 2008. Pregnant ladies remain entitled to all their contractual benefits for the period of OML (other than wages) but not for the period of AML, as was previously the case.
The employee on maternity leave is entitled to work for up to 10 days during leave in order to keep in touch with the workplace and the employer is allowed to maintain ‘reasonable contact’ with the employee throughout their leave.
If the woman on maternity leave wishes to return to work early she must give her employer 8 weeks notice.
Paternity Leave from 1st April 2008
This is available for a qualifying father of the child or partner of the mother (regardless of gender). An employee in this position can take 1 week or 2 week’s leave. If they take two week’s leave they have to be taken together. If they take just one day in a week this will count as one entire week’s entitlement.
Subject to fulfilling certain criteria, Statutory Paternity Pay will be paid at a rate of £117.18 per week for the paternity leave.
Parental Leave
This is available for anyone who needs to care for, or make arrangements for, children less than 5 years old or disabled children up to the age of 18 years old. They can apply for up to 13 weeks per child, although they can take no more than 4 weeks in one year and it is usually unpaid. The employee must fulfil certain criteria such as having had one year of qualifying service with the employer to qualify for parental leave.
Adoption Leave
This is available for anyone who is adopting a child, however it is available for only one partner of a couple, although the other partner may be able to take paternity leave. They may take up to 52 weeks, with Statutory Adoption Pay being paid to a qualifying employee for the first 39 weeks.
N – National Minimum Wage
Under the National Minimum Wage Act 1998 as amended, workers aged 18-21 years old are now entitled to at least £4.60 per hour (as from 1 October 2007) and workers over 22 are entitled to a minimum rate of pay of £5.52 per hour (as from 1 October 2006). Workers aged 16 to 17 are entitled to £3.40 per hour. The definition of worker is wide and includes home workers, agency workers and casuals. These figures will increase again in October 2008.
O - Overpayments
What avenues are open to an employer who has overpaid an employee? Employers are not allowed to make deductions from an employee’s wages unless it is required by law e.g. tax; covered in the employment contract; or the employee has given their written consent to the deduction.
P – Part Time Workers
Part-time workers are entitled to equality of benefits and treatment as with their full time co-workers. This includes such things as the same basic rate of pay, sick pay and maternity pay, access to occupational pension schemes and training opportunities.
Q – Qualifying Period
To bring certain claims against an employer the employee must have worked for a certain length of time – the ‘qualifying period’. For example, in order to bring a claim for unfair dismissal the employee must have a qualifying period of one year’s service. For some claims no qualifying period is required. For example, if they are dismissed due to an assertion of a statutory right, for a maternity related or trade union related reason the qualifying period starts from and includes the first day of employment.
R - Redundancy
Redundancy, at its most basic, is a situation where an employer requires fewer employees to do the work, the work has gone, or the business is closing. Redundancy is clearly defined in s.139 Employment Rights Act 1996. A redundancy must fit into this definition, which includes the employer ceasing the type of work that the employee was employed to do or that the purpose for which the employee was employed has ceased.
A thorough and careful procedure needs to be followed in order for the redundancy to be fair. The procedure will include providing information to the workforce and consulting with them as a whole and with the individuals directly affected. The selection process for who is to be made redundant can include a consideration of a variety of reasons but must always be objective and reasonable.
When a decision is made that a redundancy is necessary and the procedure has been followed it is also important to determine whether or not the person affected is entitled to a redundancy payment and if so how much that payment should be. This will depend upon how long the employee has worked for the employer and is calculated according to a statutory formula. If a redundancy is carried out incorrectly or the reason is not genuinely redundancy, the affected employee may have a claim for unfair dismissal.
S – Statutory Notice
The notice period is the length of time that has to be given between notification that an employee is leaving their job and the actual date of leaving. If there is no notice period stated in the employee’s employment contract, statutory notice provisions will take effect. Statutory notice is stated at s.86 of the Employment Rights Act. The length of notice of termination of employment by the employer depends on how long the employee has been employed, from no notice if they have been employed for less than one month up to 12 weeks for 12 years' service or more. The notice period stated in a contract of employment cannot be less than that given under statute, but it can be more.
T - TUPE
The Transfer of Undertakings (Protection of Employees) Regulations (TUPE) 2006 regulates the treatment of employees when a business or part of a business is sold. Employees are protected from being pushed out of a job and losing their continuity of service simply because the business they work for has been sold. There are many areas to be addressed in a TUPE transfer – for example, the terms of employment with the new employer must be on the same terms as the previous employment and both the seller and purchaser must undertake a process of information/consultation with their employees. Any dismissal made due to the transfer is automatically unfair; therefore it is very important that a seller and purchaser of a business are aware of the TUPE requirements.
U - Unions
Employees have a right to be a member of a trade union and it is unlawful to treat a member of a trade union any less favourably than a non-member. Employees cannot be penalised for taking part in trade union activities and cannot, for example, be selected for redundancy due to being a trade union member. There are times when the trade union representatives can be consulted with on behalf of their members but all employees must be consulted with, not just the union members.
V – Variation of Contract
An employment contract can be varied by agreement, either individually or collectively. An example of a contract variation that is likely to be agreed is a pay rise. A contract cannot be varied unilaterally – if one party tries to change the terms of the contract it will probably amount to a breach of the contract (see ‘B – Breach of Contract’). A variation can be accepted by conduct so action must be taken quickly if a variation is not accepted.
W – Working Time Regulations
The Working Time Regulations 1998 provide for a maximum working week of 48 hours, unless one of the exceptions applies, or the employee has signed a form to say that he wishes to opt out of the 48-hour working week. The Regulations also provide for a minimum of 11 hours rest per day, a 20-minute break where there are more than 6 hours of continuous working, and a minimum rest period of 1 day per week. In addition the Regulations now provide for a minimum of 4.8 (from 1st April 2009 going up to 5.6 weeks) paid holiday per annum (see ‘H – Holiday’). An employee can bring a claim against an employer if they are not complying with these Regulations. Our Wills, Trust and Probate Department can advise on estate planning should you receive a large sum of compensation.
X – X employees - References
There is no legal obligation for an employer to provide a reference for an ex-employee but a failure to do so may lead the employee to claim that this is possibly post termination discrimination and/or victimisation. Therefore, employers should at least give a basic factual reference when they receive a reference request. If an employer does give a fuller reference, it has a duty to take reasonable care not to give misleading information, whether as a result of the unfairly selective provision of information, or inclusion of facts and opinions in such a manner as to give a false or mistaken inference, either positively or negatively. If an employer gives an inaccurate or misleading reference and as a result a job offer is withdrawn, the employee can seek compensation.
Y – Why comply?
An employer who is found to have unfairly dismissed an employee is likely to have to pay compensation to the employee. Compensation is made up of two elements – the Basic Award and the Compensatory Award. The basic award is calculated according to a statutory formula based upon length of service and a statutory week’s pay which from 1st February 2008 is £330.00. The amount changes every year. This is calculated in exactly the same way as a statutory redundancy payment (see ‘R – Redundancy’). From 1st February 2008 the maximum basic award is £9,900.00 per employee and the maximum compensatory award is £63,000.00 per employee. It is also possible that an additional award may be made due to a failure to follow the statutory dismissal procedure (see ‘D – Dismissal’). For other claims such as discrimination there is no maximum amount that can be awarded – be warned!!
It is clearly very important that an employer does not leave the door open for employees to bring claims against them which could result in the business having to make a large pay outs. An employer can protect their business and their employees by taking legal advice as soon as an employment issue raises its head and by following some straightforward procedures. This could save the business thousands of pounds and a lot of time and hassle!
Z – Zebra
Zebra? Well unlike a zebra, which is very clearly black and white, employment law generally isn’t. Each case stands or falls on it’s own set of facts and often cases succeed according to which witnesses are the most credible. This is why it is so crucial to have a clear paper trail to support your version of events if you end up in Tribunal. If you can prove your main points with supporting documentation then the Tribunal are more likely to prefer your version of events in the absence of any documentary proof on other issues.
