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A Short Guide to UK Employment Law for Employers


This short guide provides an overview of UK Employment Law. The writer following almost 30 years of working in the area of Employment Law, has written this guide intending it to highlight some of the areas where employer's often experience difficulties, which may result in damages being awarded to employees. The writer firmly believes that most employers do not deliberately set out to break employment regulations, but often do so, because of a lack of understanding of their legal obligations.

This booklet is not intended to be a definitive statement of law and employers should always seek advice in respect of a particular situation.

Part 1 - Contracts of Employment, Written Statements and Policies
Part 2 - Wages, Working Time and Holiday Entitlement
Part 3 – Dismissal, The Equality Act and Disability

Part 1 - Contracts of Employment, Written Statements and Policies

a) Contracts of Employment

A contract of employment is created as soon as the employer and potential employee agree the main terms under which employment is offered (for example pay, hours of work, holiday entitlement and the nature of the work) and that offer is accepted by the potential employee. There is no requirement that the contract of employment be produced in a written form or signed by either the employer or employee. Where a dispute arises over the terms of the contract a court or tribunal may rely on supporting information such as the original advertisement for the post and any job offer letters and any other document which appear to indicate the terms of the contract.

The fact that there is no legal requirement that a contract of employment must be in writing, can of course lead to future disputes of what was agreed. The Employment Rights Act 1996 (ERA1996) makes it a statutory requirement that all employees are issued with a Written Statement of their Principle Terms and conditions of employment.

b) Written Statement of Terms and Conditions of Employment

Section 1 of the ERA1996 provides that an employee must be provided with a “statement of initial employment particulars” within 2 months of the commencement of their employment. We would recommend that it is issued as soon as possible as it can avoid future dispute as to what was agreed.
Section 1 and 2 provide details of what must be included in the written statement. Some items must be included in the actual statement of “initial employment particulars” and other details may be provided in supplementary documents, which must also be provided within the two months following the start of employment.

The “Statement of initial employment particulars must include:
• The name of the employer and the employee.
• The date employment began
• The date on which the employee’s period of continuous employment began.
• The scale and method of remuneration.
• The intervals that remuneration will be paid.
• The hours of work.
• Terms and conditions relating to holiday entitlement and bank holidays.
• Job Title and a brief description of work to be undertaken.
• The place or places the employee is required to work.

In respect to the following items the statement may refer to other documents
• Terms and conditions relating to sickness and sick pay entitlement.
• Details of pensions and pension schemes.
• Provisions relating to notice to be given.
• Where the employment is for a fixed term the date employment will end.
• Whether or not the employment is subject to a collective agreement.
• Where an employee is expected to work outside the UK, various details relating to pay and conditions.
• Details of grievance and disciplinary procedures.

A “initial statement of initial employment particulars” is not a contract of employment but will be treated by a Court or Tribunal as persuasive evidence to what the main terms of the contact are.

The written statement is of course produced by the employer and can be said to be the employers understanding of the principle terms of employment. Whilst not required by law, the employee is not required to sign that he has received the Statement, however, it is good practice for an employer to obtain written confirmation from the employee he has received the statement. The employer’s duty is to issue the statement and the written confirmation can be used to show they have complied.

An employee will be treated as accepting the Written Statement as a true record of the agreement between employer and employee unless they dispute the contents within a reasonable period.

c) Changing Terms and Conditions of Employment

Once the terms of employment have been agreed an employer cannot unilaterally change the terms and conditions under which the employee works. If the change is significant, to do so could lead to a successful claim of constructive dismissal based on a fundamental breach of contract.

Changing the terms and conditions under which an employee or employees are engaged, is not without risk, and the only safe way is by mutual consent following meaningful consultation.

If consent cannot be obtained then the only way to go forward is to, serve contractual or statutory notice on employee or employees who will not consent to the change and confirm in writing, that the contract of employment under which they are currently employed will come to an end at the end of the notice period but offer new employment on a new contract following the ending of the old contract. If they accept the new terms, then continuity of employment is preserved. An employee who has been employed for 2 years or more may decide not to accept the new contract and may lodge a claim for unfair dismissal.

To defend such a claim an employer will need to show:

• They had good reason to make the change.
• That meaningful consultation took place.
• They acted procedurally fairly.

Another option open to a disgruntled employee, is to continue working under protest and lodge a claim with the ordinary civil courts claiming breach of contract.
Where the terms and conditions of employment change for whatever reason, section 4 of ERA1996 provides, an employee should be issued with a new statement of particulars within one month of the change taking place.

Where an employee makes a claim to an employment tribunal, for example claiming unfair dismissal. A tribunal may make an addition award of 2 or 4 weeks’ pay to the employee if the employer has failed to comply with either section 1 or 4 of the ERA1996.

There is no prescribed form that a Statement of Terms and Conditions of Employment may take, and an employer may comply with the requirement if they issue a comprehensive Job offer letter complying with requirements of section 1 ERA1996. Where an employer opts to issue contracts of employment, they must provide all the information required by section 1 ERA1996.

d) Should I issue Contracts or Written Statements?

Many employers issue written statements to the majority of employees but may issue contracts to senior employees.

The problem with issuing a Contract of Employment, is that it will be accepted by a court or tribunal as being the entirety of what was agreed, if a particular term has been omitted it will be unenforceable. A Written Statement allows for greater flexibility, having only to confirm the basic terms and conditions of employment, it allows the employer to rely on other documents to show the full extent of the contract.

e) Should I issue employee handbooks?

There is no legal requirement that an employee issues an employee Handbook. An employer can comply with Section 1 of the ERA1996 without providing employee handbooks.

However, an employee handbook can be a way of grouping together key documents and covering other areas of the employment relationship not required by section 1. For example, a handbook could include an Equal Opportunities Policy. An employer is vicariously liable for any acts of discrimination carried out by an employee in the course of their employment. Employment Tribunals have interpreted “in the course of Employment” broadly and have considered attending a local pub for a Christmas party organised by an employer as being “in the course of employment”. A defence an employer may be able to put forward, is they have taken all reasonable steps to stop acts of discrimination. A good starting point would be the issuing of an equal opportunities policy.

We recommend that an employee Handbook should include the following basic procedures/policies:
1. Absence Policy
2. Disciplinary & Capability Policy
3. Redundancy Policy
4. Equal Opportunities Policy
5. Whistleblowing Policy
6. Harassment & Bullying
7. Grievance Policy
8. Bribery Policy
9. Holiday Policy
10. Maternity & Family Friendly
11. Social Media Policy

f) Should I make my Disciplinary Procedure Contractual?

Most companies’ disciplinary procedures include a statement to the affect that a disciplinary procedure is not contractual, and employer will endeavour to observe the policy.

The problem with making a disciplinary policy contractual is that it can give rise to claims of breach of contract if it is not rigidly observed. This could lead to an employer having to pay compensation to a dismissed employee for breach of contract (for a period of time it would have taken the employee to comply with the Procedure), where a dismissal was otherwise fair.

g) Disciplinary and Frievance Procedures

As stated above all employer should have a disciplinary procedure that should be issued or accessible to all employees. The procedure should comply with the ACAS code of Practice, the key points of which are:

• Many potential disciplinary and grievance issues can be resolved informally.
• Employment Tribunals are legally required to take the ACAS Code of Practice into account when considering relevant cases.
• Tribunals can adjust any awards made in relevant cases by up to 25 per cent for unreasonable failure to comply with any provisions of the code.
• Employers and employees should always look to resolve disciplinary and grievance issues in the workplace.

Disciplinary issues and Grievances should be dealt with fairly.
• Employers and employees should raise and deal with issues promptly and should not unreasonably delay meetings, decisions or confirmation of those decisions.
• Employers and employees should act consistently.
• Employers should carry out any necessary investigations, to establish the facts of the case.
• Employers should inform employees of the basis of the problem and give them an opportunity to put their case in response before any decisions are made.
• Employers should allow employees to be accompanied at any formal disciplinary or grievance meetings.
• Employers should allow an employee to appeal against any formal decision made.

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