Contracts of Employment
All employees have an employment contract with their employer. A contract is an agreement that sets out an employee’s:
- employment conditions
These are called the ‘terms’ of the contract.
Employees and employers must stick to a contract until it ends (eg by an employer or employee giving notice or an employee being dismissed) or until the terms are changed (usually by agreement between the employee and employer).
If a person has an agreement to do some work for someone (like paint their house), this isn’t an employment contract but a ‘contract to provide services’.
Accepting a contract
As soon as someone accepts a job offer they have a contract with their employer. An employment contract doesn’t have to be written down.
Written Statement of terms
Under s1 of the ERA 2002, an employer must, within two months of employment commencing, provide each employee with a written statement of terms and conditions relating to the following particulars:
(i) identity of the parties;
(ii) date employment began;
(iii) date continuous employment began;
(iv) scale or rate of remuneration and intervals of pay;
(v) hours of work;
(vi) any terms relating to:
a. holidays and holiday pay;
b. sickness and sick pay;
c. pensions and pension scheme;
(vii) length of notice required to determine the contract;
(viii) in the case of non-permanent employment, the period for which it is expected to continue or, if a fixed term, the date it is to end;
(ix) job title or a brief description of work;
(x) place or places or work;
(xi) particulars of any collective agreements which directly affect the terms and conditions of employment;
(xii) where employees are required to work outside the UK for more than one month:
a. the period of such work;
b. currency of payment;
c. benefits provided;
d. terms relating to the return to the UK;
(xiii) details of disciplinary and grievance procedures;
(xiv) whether a contracting out certificate is in force under the Pension Schemes Act 1993.
Any changes to the terms of employment set out in the written statement must be notified in writing, within one month of the change.
The legal parts of a contract are known as ‘terms’. An employer should make clear which parts of a contract are legally binding.
Contract terms could be:
- in a written contract, or similar document like a written statement of employment
- verbally agreed
- in an employee handbook or on a company notice board
- in an offer letter from the employer
- required by law (eg an employer must pay employees at least the National Minimum Wage)
- in collective agreements - negotiated agreements between employers and trade unions or staff associations
- implied terms - automatically part of a contract even if they’re not written down
If there’s nothing clearly agreed between you and your employer about a particular issue, it may be covered by an implied term - for example:
- employees not stealing from their employer
- your employer providing a safe and secure working environment
- a legal requirement like the right to a minimum of 5.6 weeks’ paid holidays
- something necessary to do the job like a driver having a valid licence
- something that’s been done regularly in a company over a long time like paying a Christmas bonus
You must be given a notice period before your employment ends.
The statutory redundancy notice periods are:
- at least one week’s notice if employed between one month and 2 years
- one week’s notice for each year if employed between 2 and 12 years
- 12 weeks’ notice if employed for 12 years or more
Check your contract. Your employer may give you more than the statutory minimum, but they cannot give you less.
As well as statutory redundancy pay, your employer should either:
- pay you through your notice period
- pay you in lieu of notice depending on your circumstances
Payment in lieu of notice
Your employment can be ended without notice if ‘payment in lieu of notice’ is included in your contract. Your employer will pay you instead of giving you a notice period.
You get all of the basic pay you would’ve received during the notice period. You may get extras such as pension contributions or private health care insurance if they’re in your contract.
Your employer may still offer you payment in lieu of notice, even if your contract does not mention it. If you accept, you should receive full pay and any extras that are in your contract.
Statutory Sick Pay
An employee who is unable to work because they are too ill may be entitled to statutory sick pay.
You can get £94.25 per week Statutory Sick Pay (SSP) if you’re too ill to work. It’s paid by your employer for up to 28 weeks.
You need to qualify for SSP and have been off work sick for 4 or more days in a row (including non-working days).
You cannot get less than the statutory amount. You can get more if your company has a sick pay scheme (or ‘occupational scheme’) - check your employment contract.
There are different sick pay rules for agricultural workers.
Only employees who work under contracts of employment are entitled to maternity leave. All pregnant women are entitled to up to 52 weeks’ maternity leave.
The first 26 weeks are known as ordinary maternity leave and the remaining 26 weeks are known as additional maternity leave. There are some differences between the two regimes.
When you take time off to have a baby you might be eligible for:
- Statutory Maternity Leave
- Statutory Maternity Pay
- paid time off for antenatal care
- extra help from the government
There are rules on when and how to claim your paid leave and if you want to change your dates.
You can work out your maternity pay and leave online.
You may also be eligible to get Shared Parental Leave and Pay.
Employment rights when on leave
Your employment rights are protected while on Statutory Maternity Leave. This includes your right to:
- pay rises
- build up (accrue) holiday
- return to work
Fathers are entitled to a maximum of two paid weeks’ paternity leave following the birth of a child.
When you take time off because your partner’s having a baby, adopting a child or having a baby through a surrogacy arrangement you might be eligible for:
- 1 or 2 weeks’ paid Paternity Leave
- Paternity Pay
- Shared Parental Leave and Pay
You may not get both leave and pay, and there are rules on how to claim and when your leave can start.
Employment rights when on leave
Your employment rights are protected while on paternity leave. This includes your right to:
- pay rises
- build up (accrue) holiday
- return to work
You can get time off to accompany your partner (or the surrogate mother) to 2 antenatal appointments.
If you’re adopting a child, you can get time off to attend 2 adoption appointments after you’ve been matched with a child.
Disciplinary and Grievance Procedures
Statutory procedures to deal with discipline and grievance issues at work have been replaced by an ACAS Code of Practice.
The ACAS code of practice requires an employer:
(i) establish the facts;
(ii) notify the employee in writing of the alleged conduct etc;
(iii) hold a meeting;
(iv) decide on appropriate disciplinary action;
(v) inform the employee of the decision;
(vi) provides employee with an opportunity to appeal the decision.
When it is not possible to resolve the grievance informally then the code of practice requires:
(i) the employee informs the employer of the grievance in writing;
(ii) hold a meeting to discuss the grievance;
(iii) decide on appropriate action;
(iv) allow the employee to appeal the decision if not satisfied.
Your employer must provide you with a payslip.
They do not have to do this if you’re:
- not an employee or ‘worker’, for example a contractor or freelancer
- in the police service
- a merchant seaman
- a master or crew member working in share fishing (paid by a share in the profits or gross earnings of a fishing vessel)
Your payslips can be used as proof of your earnings, tax paid and any pension contributions.
Employers can choose whether they provide printed or electronic (online) payslips.
Payslips must be provided on or before payday.
What should be on your payslip
Your payslip must show:
- your earnings before and after any deductions
- the amount of any deductions that may change each time you’re paid, for example tax and National Insurance
- the number of hours you worked, if your pay varies depending on time worked
Employers must also explain any deductions fixed in amount, for example repayment of a season ticket loan. They can choose to do this either on a payslip, or in a separate written statement.
This separate statement must be sent out before the first payslip. Employers must update this every year.
Redundancy payments should be paid to all workers who have been continuously employed for two years or more if and when they become redundant. The payments are as follows:
- Half a week’s pay for employees up to the age of 21;
- One week’s pay for each complete year of employment between the ages of 22 and 40;
- One and a half week’s pay for each complete year of employment from the age of 41.
If an employer proposes to make 100 or more people redundant, at one establishment, within a 90 day period, they must first consult with ‘appropriate representatives’ of the employees atre least 90 days prior to the first dismissal taking effect.
If planning more than 20 but less than 100 redundancies, the consultation must be at least 30 days prior.
The Secretary of State at the Department of Business, Innovation and skills must also be notified within the timescales.
If an employee commits a repudiatory breach of contract, an employer is entitled to treat the contract as discharged i.e. dismiss the employee without notice.
If an employee resigns from his job, as a result of his employer’s behaviour, it may be considered constructive dismissal. The employee would need to show that:
(i) the employer committed a serious breach of contract;
(ii) the employee felt forced to leave as a result of that breach;
(iii) the employee has not done anything to suggest that he has accepted the breach or a change in employment conditions.
An employee will have a claim for damages against his employer if the employer has dismissed him in breach of contract. This breach of contract action is known as wrongful dismissal.
The action can be pursued in the civil courts or through the employment tribunal.
It should be noted that there are limitation periods, currently 6 years.
This is a statutory claim which can only be brought by certain employees who satisfy the eligibility criteria. It can only be brought before an employment tribunal.
The success of the claim rests on whether or not there was a fair reason for dismissal and the reasonableness of the employer’s actions.
A successful applicant may receive a basics award of compensation, calculated in accordance with a set formula. In addition, he can receive a compensatory award to compensate for actual loss suffered.
The Equality Act 2010 replaced most of the previous discrimination legislation.
An employer may be in breach of statutory requirement if he discriminates against a person on the grounds of:
(ii) religion and belief;
(iii) sexual orientation;
(iv) gender reassignment;
(v) sex or marital status;
(vi) pregnancy and maternity;
(ix) trade union membership;
(x) part time work;
(xi) fixed (limited) term work.
It is always advisable to seek early professional advice on employment issues.