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EMPLOYMENT LAW GUIDE

Employment law problems can be painful and expensive.   This guide is written for both employees and employers and aims to explain the outline position.

Contents

Recruitment

Contracts of Employment

Equal Opportunities

Disability Discrimination

Discipline and Grievance

Maternity and parental leave

Termination of Employment

Unfair dismissal and redundancy

Compromise Agreements

Young&Pearce Employment Unit

RECRUITMENT

Advertising

It is unlawful to discriminate in recruitment advertising by:-

• Placing advertisements which suggest that the vacancies are open only to one sex, race or marital status or which suggest that people without disability will be preferred.

• Using words with a sexual connotation, e.g., "sales girl".

Selection methods

It is unlawful to discriminate on grounds of sex, marital status, disability, sexual orientation, age, religion or belief in the way in which candidates are assessed for selection.

Discrimination may be direct or indirect. Neither direct or indirect discrimination are permitted.

Direct discrimination

This occurs when an employer treats a person less favourably than others on the grounds of sex, race, ethnic origin, marital status, sexual orientation, religion or disability.

Indirect discrimination

This occurs when the employer applies to the employee a provision, criterion or practice which he or she applies or would apply equally to persons of a different racial group, religion, sex or sexual orientation, but:

• The proportion of the employee's racial group, religion or sex etc. who can comply with it is considerably smaller than the proportion of persons not of the employee's racial group, religion, sex etc. who can comply

• It is not justified irrespective of the colour, race, nationality, religion, sex or sexual orientation of the person to whom it is applied; and

• It is a detriment to the employee because he or she cannot comply.

The law recognises that for some jobs the sex, race, sexual orientation or religion of the successful candidate may be a "genuine occupational qualification". There are very few exceptions of this nature.

Disability

It is unlawful to discriminate against disabled people.

References

There is no obligation in law to provide a reference. References if given should be accurate. An employer who negligently gives an inaccurate reference may be liable to pay compensation to the employee.

Rehabilitation of offenders

An offender becomes rehabilitated after a period of time set for the particular sentence imposed. It is unlawful for employers or prospective employers to take into account offences in relation to which the person is deemed to be rehabilitated.

CONTRACTS OF EMPLOYMENT

Relationship

Where any person works for another for remuneration there is a contractual relationship. The lack of written evidence in the form of a written contract does not nullify that contractual relationship.

Statement of terms and conditions

There is no requirement for a contract to be in writing. Within two months of starting employment employees must be issued with a written statement of the terms and conditions under which they are employed. This statement must set out:-

• The name of the employer and employee;

• The date when the employment began and the date when the employee’s period of continuous employment began;

• The method of calculating pay and the intervals at which it would be paid.

• Holidays and holiday pay;

• Hours of work including any terms relating to normal working hours

• Sickness notification and payment;

• Length of notice;

• Job title;

• Disciplinary and grievance rules.

Contractual terms may be express, (i.e., actually written down) or implied (i.e. not written down but obvious). Conditions may also be implied because of custom and practice or by being accepted by the behaviour of both parties.

Variation of contracts of employment

Once terms and conditions have been agreed neither party may vary the contract unilaterally. Before a contract may be varied by the employer in any substantial way the employee must agree.

Implied term of mutual trust and confidence

This is implied into every employment contract. The relationship between employer and employee depends upon mutual trust and confidence and the implied term is that neither side will breach that trust. Many constructive dismissal cases are founded on the allegation that the employer has breached this implied term.

National minimum wage

A worker must be paid at least:-

• Workers aged 22 and over, £5.80 per hour;

• Workers aged 18 to 21 inclusive, £4.83 per hour. This is called "the development rate".  Note that the development rate can also apply to workers aged 22 and over during their first 6 months in a new job with a new employer and who are receiving accredited training.

• Workers aged 16 to 17 inclusive, £3.57 per hour.  This is called "the young workers rate".

Note that tips cannot be used to top up wages to make them meet the minimum wage.

A "worker" for these purposes is someone 18 or older employed in the UK who has entered into or works under "any contract whether express or implied and (if it is express) whether oral or in writing whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract, that of a client or customer of any profession or business undertaking carried on by the individual".

Deductions from pay

An employer may not make a deduction from a worker’s pay unless:-

• It is authorised by statute;

• It is authorised by the worker’s contract; or

• The worker has previously signified his agreement in writing.

This does not apply to the clawing back of an overpayment of wages but care has to be taken with this especially if the employer may have misled the employee.

Maximum working week

The maximum working week is 48 hours including overtime over a seven day period averaged over four months. It is possible for employers and employees to agree that the employee will work a longer period. There are specific rules relating to recording of hours and the requirement for a written agreement.

Full time employees are entitled to 5.6 weeks annual leave, including bank and public holidays.  The regulations specify it in this way to assist employers to calculate the paid leave entitlement for part-timers (whose entitlement is pro rata).   Employers may give employees more paid holidays than this if they wish to but may not give less.

Statutory rights to notice

An employee employed for one month or more must give the employer one weeks notice.

These are minimum periods of notice and may be extended by agreement between the parties usually set out in the written terms of employment.

EQUAL OPPORTUNITIES

Employees may not be discriminated against on the grounds of race, sex, marital status, sexual orientation, religion or belief disability or age in areas of pay, terms and conditions of employment, promotion, transfer and training opportunities, benefits, selection for redundancy.

Sexual harassment is a form of sex discrimination. Other forms of harassment may be other forms of discrimination.  Employers may be liable for the acts of their employees.

DISABILITY DISCRIMINATION

Discrimination for a reason related to a person’s disability is unlawful both at the recruitment stage and during employment.

At the recruitment stage an employer may not discriminate on grounds of disability :

• in arrangements for determining to whom employment is offered, or
• in the terms on which employment is offered, or
• by refusing to offer employment

During employment an employer may not discriminate on grounds of disability against an employee:

• in the terms of the employment,
• in opportunities for promotion, transfer, training or receiving any other benefit,
• by refusing such an opportunity,
• by dismissing that person or subjecting him or her to any other detriment.

"Disability"

A disabled person is one who:-

has a physical or mental impairment, which has substantial adverse effects that are long term on normal day to day activities.

Where an employee shows that he or she has been treated less favourably for a reason related to his or her disability the employer may defend the claim on the basis that the less favourable treatment was justified.

Duty to make reasonable adjustments

An employer is under a duty to make reasonable adjustments where any arrangements made by or on behalf of an employer or any physical feature of the premises occupied by the employer places the disabled employee concerned at a substantial disadvantage in comparison with non disabled people. The employer is not under such a duty if he, his employees or agents, did not know and could not reasonably be expected to know that the employee or job applicant is disabled.

Compensation

Compensation for Disability Discrimination is not subject to a maximum limit.

DISCIPLINE AND GRIEVANCE

Employers must include within the written statement of employment particulars details of:-

• Any disciplinary rules;

• The name or description of the person to whom the employee may apply if dissatisfied with any disciplinary decision and the name of any person to whom a grievance may be taken.

• The way in which any grievance will be proceeded with.

Disciplinary Action

It is important that any disciplinary action taken against an employee can be demonstrated to have been carried out fairly.  The procedure used should therefore contain the following elements

Investigation – The employer must carry out a proper investigation without unreasonable delay to establish the facts of the case.  This may involve an investigatory meeting with the employee.

Information – the employer must notify the employee in writing of the case against him or her.  This notification must contain sufficient information about the alleged misconduct or poor performance and its possible consequences to enable the employee to prepare to answer the case at a disciplinary meeting.

Meeting -  A meeting with the employee should be held without unreasonable delay whilst allowing the employee reasonable time to prepare his or her case. The employer should explain the complaint and go through the evidence. The employee should be given a reasonable opportunity to ask questions, present evidence, call witnesses and raise points about about any evidence provided by witnesses.  Where either party wishes to call witnesses they must give the other party advance notice of this. The employee is entitled to be accompanied by a work colleague or trade union representative.

Decision – This can be the taking of no action, giving a written warning, a final written warning or dismissing the employee. The decision should be given to the employee in writing who should also be notified of the reason for the dismissal, the date on which the employment contract will end, the appropriate period of notice (if any) and  that he or she may appeal against that decision.

Appeal – This will take the form of a further meeting and should be  conducted by a manager who was not previously involved in the case.  The person conducting the appeal should do so conscientiously and should look at all of the evidence and if necessary make further enquiries.  The employee should be notified of the result of the appeal in writing.

This may lead to:-

• No action;

• Verbal warning;

• First written warning;

• Final written warning;

• Dismissal.

It is not always necessary to follow all of these stages. Serious misconduct may lead directly to a final written warning while gross misconduct could lead to dismissal without notice.

Any employer considering disciplinary action should take legal advice at the outset.

It is important to keep written records of all investigations and all disciplinary interviews.

MATERNITY AND PARENTAL LEAVE

Ante-natal care

Employees are entitled to paid time off to receive ante-natal care.

Maternity leave

Workers are entitled to maternity and/or parental leave.

Ordinary maternity leave

All female employees are entitled regardless of how long they have worked to 52 weeks leave.

Compulsory maternity leave

There is a statutory prohibition on women working during the two weeks after the week of childbirth. The employer is liable to a fine.

Paternity leave

Fathers who have completed 26 weeks service by the 15th week before the expected week of birth are entitled to two weeks' paid paternity leave.  This is in addition to the right to 13 weeks' parental leave.

Parental leave

Parents who have been with their employer for at least a year have the right to take up to 13 weeks unpaid parental leave per child over the first five years of the child’s life.

Time off for dependents

Every employee, regardless of length of service, is entitled to reasonable time off:-

• To help when a dependent gives birth, falls ill or is injured or assaulted;

• To make longer term arrangements for the care of a sick or injured dependent;

• As a result of a dependent’s death;

• To cope when arrangements for caring for a dependent unexpectedly break down;

• To deal with an unexpected incident involving a dependent child during school hours.

TERMINATION OF EMPLOYMENT

Dismissal means bringing a contract of employment to an end.

Statutory protection from Unfair Dismissal only applies after a person has been continuously employed for 12 months. An employee with less than 12 months may be dismissed by giving reasonable notice (at least the statutory minimum of one week.). He or she must also be given pay for any holiday that has accrued but which has not been taken.   Problems may arise if notice is given near the end of the 12 month period and advice should be taken.

The law recognises six fair reasons for dismissal. These are:-

• A lack of capability or qualifications to carry out the work for which the employee is employed;

• Unsatisfactory conduct;

• Redundancy;

• Contravention of statute;

• Retirement;

• Some other substantial reason.

Dismissal under one of these heads will only be fair if:-

• The employer has acted reasonably in dismissing the employee for one of the reasons stated; and

• The employer has followed a fair dismissal procedure. This will only be the case if:-

1. The company’s disciplinary procedure has been followed where appropriate;

2. The employee has been given the chance to improve his or her work performance or conduct (except in the case of gross misconduct);

3. The employee has been given a chance to explain the reasons for his or her behaviour; and

4. The employee’s appeal has been heard if he or she has chosen to exercise that right.

Note:  A fair disciplinary procedure must be followed and in addition the employer must follow any procedure laid down in the terms and conditions of employment.

Where an employee's contract of employment is being terminated due to retirement there is a complex statutory procedure which must be followed.

UNFAIR DISMISSAL AND REDUNDANCY

Employees given statutory protection

Statutory protection against unfair dismissal is given to employees with at least one year’s continuous employment.

It is therefore very important that if consideration is being given to the dismissal of an employee with statutory protection that proper procedures are followed and that the dismissal is for proper reasons.

An Employment Tribunal has power to award compensation for unfair dismissal up to £66,200.

Legal advice should always be taken when you are considering dismissing an employee.

Awards made by Employment Tribunals for the calculation of compensation are made up of the Basic award and the Compensatory Award.

Basic Award

For service below the age of 22 this is half a week’s pay for each year of service. For service between the ages of 22 and 40 inclusive one weeks pay for each year of service and for ages 41 to 65 one and a half week’s pay for each year of service.   A week's pay is capped at £380 and the basic award is subject to a maximum of £11,400.

Compensatory Award

The maximum compensation is £66,200 except for discrimination cases where there is no maximum.

The Compensatory Award is intended to included compensation for:-

• loss of earnings
• employer’s pension contributions
• loss of other benefits e.g. company car or any other perks.

An employee has a duty to mitigate his loss i.e. look for other work and failure to do so can result in a reduction of compensation.

A Tribunal can also reduce the award to have regard to the employees contribution to his or her dismissal.

See above for reduction or increase of the award for non-completion of the statutory disciplinary procedure.

Additional Award

If the tribunal has ordered the employer to re-employ the employee and the employer has failed to do this an Additional award of between 26 and 52 weeks’ pay can be ordered.

There is no qualification period in relation to a complaint to a Tribunal for sexual, racial or disability discrimination. There is no maximum compensation in relation to these areas.

Sexual harassment

Sexual harassment by one employee of another employee in the course of employment may result in a complaint in a Tribunal in respect of that employee but the employer may also be joined in those proceedings. The employer can also be liable for compensation. It is therefore very important that the employer takes all possible steps to prevent such sexual harassment taking place. The same applies in respect of all forms of discrimination, e.g. sexual, sexual orientation, religious, racial and disability discrimination. Employers must have comprehensive policies which could then be used as evidence to show that they have taken all possible steps to avoid such discriminatory actions taking place.

Definition

A redundancy occurs where a dismissal is wholly or mainly because

• The employer has ceased to carry out his business or intends to cease to carry out his business for the purpose for which the employee is employed;

• The employer has ceased or intends to cease to carry on that business in the place where the employee was so employed;

• The requirements of that business for employees to carry out work of a particular kind have ceased or diminished or are expected to do so;

• The requirements of the business for employees to carry out work of a particular kind in the place where they were so employed have ceased or diminished or are expected to do so.

The tribunal will apply a three stage test comprising the following questions:-

• Was the employee dismissed?

• Had the requirement of the employer’s business for employees to carry out work of a particular kind ceased or diminished or were they expected to cease or diminish?

• If the answer to the second stage is "yes", was the dismissal of the employee caused wholly or mainly by the cessation or diminution?

Dismissed employees are entitled to a redundancy payment if they have been dismissed wholly or mainly because of redundancy.

There is a statutory requirement of consultation if the employer is proposing to make 20 or more employees redundant. The requirement is to consult recognised or trade unions or any appropriate representatives elected by the employees about ways of avoiding the dismissals, reducing the numbers to be dismissed and mitigating the consequences of the dismissals.

Generally there is a right to individual consultation. It is important to consult with each individual employee who it is proposed to consider making redundant.

"Fair consultation" has been defined as:-

• Consultation when the proposals are still in the formative stage;

• Adequate information on which the employee can base a response;

• Adequate time in which to respond;

• Conscientious consideration by the employer of the response.

The amount of redundancy pay to which an employee is entitled depends upon his or her contract of employment and on the statutory minimum. If a contract sets out the redundancy entitlement then that contract has to be followed. If there are no such redundancy entitlements set out in the contract then statute governs what must be paid. The statutory limits are:-

• Service under the age of 18 does not count;

• For years of service between the ages of 18 and 22 the employee receives half a week’s pay for each year of service;

• For service between the ages of 22 and 41 the employee receives one week’s pay for each year of service;

• For service over the age of 41 the employee receives one and a half week’s pay for each year of service.

For the purpose of calculating redundancy pay the statutory limit on the amount of a week’s pay applies. This is £380 per week.

Maximum service which can be taken into account is 20 years and the greatest amount of redundancy pay which is payable is 30 weeks. This means that at the present time the limit is £9,300.

An employee must have two years’ service with his or her current employer to be entitled to any payment whatsoever for redundancy unless the contractual agreement states otherwise.

It is advisable to take legal advice before any action in relation to redundancies is taken.

COMPROMISE AGREEMENTS

The law only allows employers and employees to settle pending claims under closely regulated circumstances. However it is possible for the parties to agree the terms under which an employee will leave and if this is done under an agreement known as a compromise agreement the employee is prevented from applying to an Employment Tribunal.

The following conditions must be satisfied:

• the agreement must be in writing;
• the agreement must relate to the particular complaint;
• the employee must have received independent legal advice;
• the adviser must be covered by an insurance policy covering the risk of a claim for losses because of the advice;
• the agreement must state that the conditions regulating compromise agreements are satisfied.

YOUNG & PEARCE EMPLOYMENT LAW UNIT

Advising employers and employees on all employment law issues including:-

• contracts of employment;

• policies on discrimination;

• disciplinary issues;

• dismissal;

• redundancy;

• compromise agreements.

We are experienced in:-

• negotiating either through ACAS or face to face;

• successfully representing clients in the Employment Tribunal;

• appeals to the Employment Appeals Tribunal.

Contact Tony Wilkinson to discuss your employment law needs.