Employment Law for Business
The information on this site is not a substitute for taking legal advice, and if you have any concerns in relation to the matters raised here or in relation to any other employment law issue, please contact a member of our Employment Department.
This is not an exhaustive list of all the rights available to your employees. In particular their contracts or collective agreements may give them great rights. Not all of these rights will be available to them as there are exclusions. Employment rights increase in number and importance the longer staff work for you.
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Business Transfers and Takeovers
Businesses take over other businesses, or are taken over themselves. Under the Transfer of Undertakings (Protected Employment) Regulations, the employees may be 'transferred' to the 'purchasing' business together with their accumulated employment rights. The regulations also provide details of a procedure for providing employees with information and, when necessary, consultation. The Regulations are complicated and if the business gets it wrong it could face claims of unfair dismissal - which arise automatically if they are due to the tranfer. Advice should be taken.
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Contracting and Outsourcing
The Transfer Regulations can apply to outsourcing and contracting arrangements, so that a business taking over a contract from a previous service provider can find itself having to continue the employment of the staff that were doing the work through the previous service provider. The Regulations are complicated and advice should be taken.
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Contracts of Employment
Many employers believe they do not have any. There is ALWAYS a 'contract' of employment between an employer and employee. The Contract need not be in writing. It may be partly oral, it may incorporate the letter offering the job. It is likely to include 'implied' terms. There are terms of a contract of employment that have, through case law, been 'implied' into the employee's contracts of employment. There may be terms 'implied' by custom and practice in the particular trade of the employees.
EVERY employee is entitled to receive a written statement of the terms of employment with his/her employer within 2 months of starting employment specifying eg. Job, Title, Pay, Hours. However, this does not necessarily form the contract of employment. It is essential that all employees are given full written contracts of employment, in order to clarify the precise details of the terms of the contract, and give certainty to the relationship between the parties. The more responsibility the employee has, the more important it is that he/she is given a written contract of employment.
For senior employees, employers can protect themselves with restrictions limiting solicitation of customers, competing and disclosure of confidential information. Such restrictions must, however, be reasonable in scope.
The Employment Tribunal is able to order compensation to any employee that has not received the terms of employment in writing.
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Disciplinary and Grievance Procedures
An employer is obliged to provide an employee within two months of commencing employment with written details of the disciplinary and grievance procedures that will be operated with respect to him/her. The employer must either give a document to the employee with the details, or alternatively inform him/her where and how he/she may see a copy of those procedures.
It is important that all businesses have set procedures that will be adopted in disciplinary matters. This assists a careful and considered approach to dealing with under-performing employees or instances of misconduct. It will help a Tribunal in considering the fairness of a dismissal in the event of any claim being made against the employer. It is important the employer operates a standard, well defined procedure, which allows flexibility in unusual cases, to maintain a fair approach, and thus reduce the risk of unfair dismissal claims.
The procedures need to be carefully worded, to produce a fair system which is appropriate to the needs and circumstances of the business. A study published by the DTI in July 1998 highlighted that the most common reason for employers losing cases of unfair dismissal was for procedural irregularities. It pays to follow the proper procedure every time. Time spent in preparation of comprehensive procedures should reduce litigation costs in the future.
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Discrimination, Victimisation and Harrassment
It is illegal to discrimate on grounds of gender, sexual orientation, marital status, gender reassignment, race, colour, nationality, natural origin, ethnic origin, disability, age, religion or belief. This behaviour still persists and the law provides workers with protection and powerful remedies.
The law protects individuals against discrimination in a number of ways including -
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on the selection and appointment of staff
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the arrangements for and access to promotion and training
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from detrimental treatment including harassment, and on selection and reasons for dismissal
There is also legal protection for employees from discrimination in the way in which any policies, procedures or practices are operated by the employer. This type of discrimination is known as 'indirect discrimination'.
There is also an obligation on employers to make reasonable adjustments to the workplace and work practices to enable disabled people to do their work as effectively as possible. Not every type of adjustment will be 'reasonable'. The legislation and court cases provide some guidance on this. We can advise you on your obligation to make the reasonable adjustments.
The law on protection against discrimination on grounds of sexual orientation, on religion and on belief came into effect in December 2003. It provides protection from direct discrimination on these grounds, including harassment, and 'indirect' discrimination. The protection against discrimination on grounds of sexual orientation also includes protection from discrimination on the basis of the perceived sexual orientation of the employee, as well as actual sexual orientation. It protects people of all sexual orientations, heterosexuals, homosexuals and bisexuals. We can explain these rights and guide you through the legal process to obtain proper redress.
Claims of discrimination can be made against an employer even when the individual concerned has never worked for that employer - such as in connection with a job application. There is NO upper limit on the compensation awards that may be awarded to a victim of discrimination. The Employment Tribunal is not afraid to make substantial punitive awards where it finds discrimination.
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Employed or Self Employed?
In many businesses workers sign contracts specifying they are self-employed contractors.
The Employment Tribunal will look beyond the wording of the contract. If the worker can be hired and fired, if the business controls the way that the workers undertake the role, is paid exclusively by the business, is provided with tools and transport by the 'employer' and has to provide the work personally (cannot send a substitute) - the Tribunal are likely to conclude that the independent contractor is in fact an employee.
The worker will then have the rights that an employee would have. The Tribunal will not be persuaded by words used in one document if the reality of the relationship between the parties suggests a different status. This has signficant tax implications for the Employer, as well as possibly giving rise to Employment Tribunal claims should the relationship be terminated.
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Employee Rights
Employment rights increase in number and importance the longer the staff work for their employer. A common error is to assume that employment rights only begin after one year of service. This section is included to show how rights increase as length of service increases, but is not a complete or detailed list of rights.
Applying for a job and attending interview not to be discriminated against on grounds of gender, marital status, race, disability, sexual orientation, religion, beliefs or age.
Immediately on commencing employment -
- not to be discriminated against on grounds of gender, race, marital status, disability, sexual orientation, religion, beliefs or age
- to have an itemised pay statement
- to be paid Statutory Sick Pay after three days of incapacity
- not to have money deducted from wages without their prior written consent
- not to be dismissed or selected for redundancy because of pregnancy
- to be given time off if pregnant to attend ante-natal care appointments
- when pregnant to have 26 weeks maternity leave if they properly notify you of the pregnancy and the date they leave work
- right to be accompanied (by a trade union representative or work colleague) at any disciplinary or grievance hearing
- right to at least National Minimum Wage (at the prevailing rate)
- right to rest breaks, daily breaks, maximum hours work per week
- right to take time off to attend to family emergencies
| After one month |
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a statutory minimum of 1 week's notice of dismissal |
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After two months
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To receive a written statement of details of their employment including details of - pay job title hours entitlement to holiday and holiday pay entitlement to sick pay and pension any disciplinary or grievance procedure You must have the disciplinary and grievance procedures in writing. |
| After six months |
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to take additional maternity leave of a further 26 weeks after the end of the ordinary maternity leave period to take paternity leave the right to apply for a flexible working arrangement to take adoption leave |
| During the first year |
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a right to paid holiday on an accured basis through the year |
| After 1 year of continuous employment |
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not to be unfairly dismissed to have a written statement of the reasons for the dismissal to receive at least 1 week's notice of dismissal and an extra week for each complete year of service after two years up to a maximum of 12 weeks' notice after 12 years service to take parental leave (available to men and women) a dismissal can occur even if you do not intend it to happen. An employee can claim 'constructive' dismissal if you behave in a manner so as to bring the contract to an end, eg. by unilaterally varying a fundamental contract term. |
| After 2 years of continuous employment |
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If redundant - to a statutory redundancy payment and a written statement indicating how the redundancy payment is calculated
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These rights are in addition to any additional rights granted by virute of the employee's contract of employment.
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Employment Tribunals
There are very limited circumstances when costs can be ordered to be paid by the losing party but normally the losing party does NOT pay the legal costs of the winning party. There is no initial fee for issuing proceedings. We are experienced in representing employers in the Tribunals, and can assist you if a claim is made.
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Flexible Working Arrangements
Parents of children aged under 17 or of disabled children aged under 18 have had the right to apply to work flexibly, providing they have the qualifying length of service. Employers have a statutory duty to consider their applications seriously. The law does not provide an automatic right to work flexibly.
The aim of the law is to facilitate discussion between employers and employees to find a solution that suits them both and meets their needs. There is a statutory procedure that must be followed, which includes various time limits. An employee can bring a claim to an Employment Tribunal if the proper procedure is not followed. Employees can also make an application for flexible working in order to care for an adult, eg. an elderly parent. In such cases additional rules apply. Employers should take advice when dealing with such requests.
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Giving a Reference
There is no absolute legal obligation to give a reference, but if one is given it must be fair and accurate. If it is not fair and accurate the former employee may be entitled to sue the ex-employer if he or she has suffered a loss as a direct result of the inaccurate reference. This might occur when an offer of employment is made subject to a satisfactory reference, and then the offer is withdrawn due to an inaccurate reference.
Employers should also be aware of the potential discrimination claim that might arise if an inaccurate reference is given, or where the ex-employer refuses to give a reference for an employee that has made an allegation of discrimination against the employer. References should therefore be written very carefully. We can give guidance and assistance on this difficult issue.
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Monitoring Staff
The concerns of employers over abuse of email and internet access can be a potential point of conflict with an employee's personal rights under the Human Rights Act, and Data Protection entitlements.
However, the law does allow some monitoring of staff where it is for a legitimate purpose, a limited period, and is proportionate to the rights of the employee.
This area of law is a minefield, and it is crucial that legal advice is sought before embarking on the process of monitoring any member of staff.
It is recommended that you consider having policies in place in relation to the use of IT and communications systems.
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National Minimum Wage
This came into operation on 1st April 1999. The rate of payment depends on the age of the worker. It covers almost all workers over compulsory school age.
Employers are required to keep records to show compliance. If underpaid, the employee may bring a claim in the Employment Tribunal to recover the money, the presumption will first be that the employee has been under paid. There are criminal sanctions for failure comply.
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Part-Time Workers
Since July 2000 part-time workers are entitled to both access to and benefit from the same terms and conditions as their full-time colleagues (subject to some entitlements being ona pro-rata basis). Notably this includes entitlement to bonus/commission where applicable, and pension rights.
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Protecting Confidential Information and Trade Secrets
Confidential information and 'Trade Secrets' are important to a business. The security of them can be enhanced by including properly worded confidentiality clauses in the Contract of Employment.
It is important to take advice on the wording and scope of appropriate clauses in a contract - known as 'Restrictive Covenants'. Such clauses can prevent certain employees from soliciting customers or even setting up or working for a competitor.
Such restrictive covenants must however be limited in time and, where relevant, geographical distance. If the restriction is inappropriately or too widely worded a Court may reject the entire clause, thereby depriving the employer of its protection. They need to be appropriate to the particular employee, and reasonable, to be enforceable in the future.
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Working Time Regulations
On 1st October 1998 regulations came into force giving both employees and the self-employed a range of new rights including -
- a maximum average of 48 hours working week (subject to some exceptions)
- a minimum of 28 days paid holiday (for those working a 5 day week)
- a right to 24 hours off in every 7 day period
- an entitlement to a break of 20 minutes if working for 6 hours
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Contact our Employment Department to discuss any problem to see if we can be of help.
To make an appointment please email Mark Ridley
or alternatively telephone the Department direct 024 7649 3118 and speak to Sue Mace, the Department's PA.
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