Employment Law – Myth 2

Myth: An employee has no rights without a written contract

Many employers think this is the case! However, following on from last week’s blog about contracts of employment, you should be aware that employees have a contract with you, whether or not there is anything in writing. They will therefore have basic contractual rights which can be implied, for example, from what you both do on a daily, weekly and monthly basis.

However, you need to understand that employees also have many statutory employment rights which will impact on how you deal with your staff.

For example, employees have the right to:

National Minimum Wage

The standard hourly rate for employees over the age of 21 is currently £6.31, rising to £6.50 from 1 October 2014.

There is also a development hourly rate for employees between 18 and 20 (inclusive) which is currently £5.03, rising to £5.13 from 1 October 2014 and a younger workers hourly rate, currently £3.72 and rising to £3.79 from 1 October 2014.  And finally, the apprenticeship hourly rate is currently £2.68, rising to £2.73, again from 1 October 2014.

[Please note that it is not just employees who are entitled to the national minimum wage but also workers.  Workers are those who agree to work or provide services for you personally but are not doing this as part of their own business eg: they are not genuinely self-employed].

Holiday

All employees (and workers) are entitled to a statutory minimum period of holiday, that is, 28 days or 5.6 weeks per year.  This period of holiday can include the 8 bank holidays.  The right to holiday applies to all types of employee and worker eg: part time, casual and temporary – although “temps” recruited through an agency are dealt with slightly differently.

Section 1 Statement of terms of employment

As mentioned in my previous blog, all employees are entitled to receive a written statement of some basic terms of their employment within 2 months of starting their employment.  This applies even though employees may not yet have completed their probationary period.

Notice of Termination

Employees who have been employed for more than 1 month are entitled to receive a statutory minimum period of notice from you, dependent on their length of service as follows:-

Less than 1 month’s employment – Nil

More than 1 month but less than 2 years – 1 week

2 complete years or more – 2 weeks

And then 1 week for each complete year of service up to a maximum of 12 weeks after 12 complete years’ service.

Please be aware though that the entitlement to notice when there is no written contract is not just the statutory minimum periods of notice referred to above but to reasonable notice.  If there are other employees in the business with written contracts who do a similar role and receive a longer period of notice than the statutory minimum, the longer period of notice could apply.

Also, in reverse, if there are written contracts of employment but which provide for a shorter contractual period of notice than those referred to above, an employee is entitled to the statutory period, as a minimum – this is an area where many employers come unstuck!  And it gets worse – even though you are obliged to give the statutory minimum period of notice, an employee only has to give the employer a week’s notice, if there is no longer period in the written contract or indeed there is no written contract.  This sometimes catches employers by surprise!

Discrimination and Dismissal

Lastly, but importantly, employees also have statutory protection against discrimination and dismissal.  Protection against discrimination, on grounds of sex, race, disability, age, sexual orientation, religion or belief, starts even before someone is employed eg: during the recruitment process but protection against dismissal (with some exceptions – including where the dismissal is also discriminatory!) only starts once someone has been continuously employed for 2 years (increased from 1 year in April 2012).  I am sure we will come back to this topic in a later blog!

Please comment or come back to me with any questions you may have on this or a related topic.

 

 

Employment Law – Myth 1

Myth: There is no contract of employment if there’s nothing in writing

Employees have an agreement with their employer, even if they have never received a written contract of employment.

At its most basic,  the employee turns up for work at their place of work, does the job their employer asks them to do, finishes work at a specific time and gets paid for their work, either weekly or monthly, at a rate of pay which has been agreed at the outset of the relationship. Also, if there’s nothing in writing, an employee is entitled to a reasonable period of notice should the employment be terminated.The relevant period of notice will be determined by looking at the notice period to which other employees doing the same role or of a role of similar status are entitled to.  This could have unintended consequences for an employer, particularly for example, should the employment be terminated during a probationary period when an employer might want the flexibility to terminate on a much shorter period of notice.

Even a verbal agreement can be enforced by the employee in the courts or tribunal.

To avoid these unintended consequences, and to comply with their statutory obligations, an employer should issue all employees, whose role is intended to last for 1 month or more, what is referred to as “a written statement of employment particulars” (as required by section 1 of the Employment Rights Act 1996).  This is required to be done within 2 months of starting employment and applies even though the employer may require the employee to undergo a probationary period before confirming their employment.

The terms required by section 1 cover: employer’s name, job title, start date, continuous employment date, place of work, hours of work, pay – how much and when paid, holiday, sickness and sick pay, notice periods and termination, notes about disciplinary and grievance procedures, pension provision, the duration if the work is temporary or the end date if the role is on a fixed term contract, any requirement to work abroad for more than one continuous month and, if so, the specific terms which apply to that work and any applicable collective agreements (for certain industry sectors).

An employee cannot bring a tribunal claim solely on the basis that their employer has failed to provide them with a written statement but can combine such a claim with a claim of, for example, unfair dismissal. In those circumstances, an Employment Tribunal can award the employee between 2 and 4 weeks’ gross pay for failing to provide them with a section 1 statement or to provide them with some of the required particulars.