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Employment Law


Top 10 FAQ

1. Why does the law seem so favourable to employees and so onerous for the employer?

With over 25 Statutes, 100 Statutory Instruments, 36 European Directives and 20 Codes of Practice regulating how an employer should act in an employment relationship, it is no wonder that employers feel that they can never get to grips with all that is required.

The temptation is to ignore the issues and hope they go away, but all too often this is not going to be a safe way of dealing with employees. A minor gripe can end up as a costly tribunal case if not handled promptly and sensitively. It’s understandable that employers take a ‘common sense’ approach and equally understandable that they are amazed when sometimes it turns out that this leads to a successful tribunal claim by their current or ex-employee.

It is worth remembering, employment law exists to protect the best interests of both employers and employees!

2. What is a contract of Employment?

There is always a contract between an employee and employer. There may not be anything in writing, but a contract will still exist. This is because the employee’s agreement to work for the employer and the employer’s agreement to pay the employee for the work forms a contract.

A contract gives both the employee and the employer certain rights and obligations. The most common example is that the employee has a right to be paid for the work he/she does. The employer has a right to give reasonable instructions to the employee and for the employee to work at the job. These rights and obligations are called contractual terms.

The rights that an employee has under a contract of employment are in addition to the rights he/she has under law, such as, for example, the right to a national minimum wage and the right to paid holidays. Generally, the employee and the employer can agree to whatever terms they wish to be in the contract, but they cannot agree to a contractual term which gives the employee less rights than they have under law.

All employees, regardless of the number of hours they work per week, are entitled to receive a written statement from their employer, within two months of starting work. The statement describes the main terms of the contract of employment.

The statement must give details about:

  • Names of the employer and employee
  • Date the employment began
  • Job title
  • Place of work
  • The rate and frequency of pay, holidays, sickness pay and pension scheme(s)
  • Hours of work
  • Notice details
  • Reference to any incorporated collective agreements
  • Details of grievance and disciplinary procedures.

3. What do I need to do if I wish to make changes to employee contracts?

You may as an employer wish to change the contract with one or all of your employees. In effect it is a proposal to change the contract of employment if, for example, you as the employer want to:

  • change the type of work that they do
  • change their place of work
  • cut their pay
  • change the number of hours they work

A contract of employment is like any other contract in that to change any of ther terms consent of both parties is required. Therefore, you should consult the employee(s) or their representative (for example, a trade union official), explain the reasons, and listen to alternative ideas. Changes can be agreed directly between the employee and employer, or through a ‘collective agreement’ between the employer and a trade union.

If the employee(s) don't agree, you are not allowed to just bring in a change.

4. Are workers employees or self-employed?

If you can answer 'Yes' to the following questions, it will usually mean an individual is self-employed:

  • Do they have the final say in how the business is run?
  • Do they risk their own money in the business?
  • Are they responsible for meeting the losses as well as taking the profits?
  • Do they provide the main items of equipment they need to do the job, not just the small tools many employees provide for themselves?
  • Are they free to hire other people on their own terms to do the work they have taken on? Who pays these people and how?
  • Do they have to correct unsatisfactory work in their own time and at their own expense?

Remember, having a salaried job means the individual is employed in that job, but legally they can be self-employed at the same time. For instance, they might earn an extra income through part-time work at evenings and weekends that would count as self-employment.

If you can answer 'Yes' to the following questions, the individual is probably employed:

  • Does the individual have to do the work rather than hire someone else to do it for them?
  • Can someone tell the person at any time what to do or when and how to do it?
  • Are they paid by the hour, week, or month? Can they get overtime pay?
  • Do they work set hours, or a given number of hours a week or month?
  • Do they work at your premises or at a place or places you decide?
5. What is a Compromise Agreement?

It is a legally recognised agreement that terminates an employee’s employment and finalises all settlement between the employer and the employee. The employee agrees to sign away their right to complain to and Employment Tribunal in exchange for a “full and final” financial settlement from their employer.

6. What is redundancy?

A redundancy situation exists where:
  • an employer's business, or part of the business, has ceased to operate; and/or
  • the business has moved to a different place; and/or
  • the needs of the business for work of a particular type to be done has ceased or diminished.

7. What are the time limits for an Employment Tribunal claim?

Most claims to Employment Tribunals must be made within very strict time limits. In most cases the tribunal must receive a claim within three months. This three months begins with the date employment ended or when the matter being complained about happened.

If the claim is received outside the time limit, the tribunal will probably not be able to consider it unless there are exceptional reasons for the delay. For example, the claimant may have been in hospital for the period when they should have made their claim.

If a claim is accepted, the tribunal office will send the employer (who will be called the responspondent for the purposes of the claim) a copy of the claim form (ET1) together with a form for their response (ET3). If no response is received within 28 days, a tribunal may consider issuing a default judgment. A default judgment allows a tribunal chairman to give a decision about the claim without the claimant having to go to a hearing.

8. I recently lost a tribunal case even though the reasons for the employee’s dismissal were sound and proven. Why did I not succeed in defending the company’s actions?

As well as needing a valid reason for the dismissal, you need to prove that you have acted reasonably in all the circumstances in dismissing the employee for that particular reason – not only the way in which the dismissal was carried out, but also whether or not you acted reasonably in relation to the situation leading up to the decision to dismiss.

Since 1 October 2004 you must show that you have followed the statutory procedures laid down for dealing with discipline and dismissal. The mandatory three-step process must be followed as part of the dismissal process and employee rights, e.g. to be accompanied to meetings, must be granted.

Failure to follow due process, even if you have a water-tight case and the employee is clearly guilty of a serious offence for dismissal, means an employee would win a case of unfair dismissal AND, worse still, failure to follow procedures will also leave you liable to have to pay the employee additional compensation.

9. What sort of awards do employment tribunals make?

It depends on what is claimed. Certain claims, such as a claim for unpaid statutory redundancy pay, have a cap on them so there is a maximum that a tribunal could award. Claims concerning matters such as discrimination have no such maximum. Awards in cases depend on a number of factors but can run into tens of thousands of pounds. By way of an example, in the year 2005/06 the highest award given by a tribunal was £984,465 – this was in a race discrimination case, the average award that year for race claims was £30,361.

10. Does an employee bringing a tribunal claim have to have a certain amount of service with the organisation before they can approach a tribunal?

Yes and no. Looking at some of most common claims brought last year, examples of service requirements are:

Reason for Tribunal Claim:

Length of Service Required

Redundancy Pay

2 complete years

Unfair dismissal

Generally 12 months

Discrimination

None

Unauthorised deductions from wages

None

Breach of Contract

None

FAQs are for general guidance only and should not be considered a comprehensive statement of Law; they do not remove the need for seeking specific professional advice on specific issues particularly when a claim may ensue.





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