Employees and employers have a variety of rights and obligations towards each other. These rights and obligations are either imposed by law (statutory), or agreed between the parties (contractual).
In simple terms, an employee agrees to work for an employer in return for wages. A contract is made when the offer of employment is accepted.
A contract of employment (contract of service) contains the terms governing the relationship between employer and employee. It is usually in writing but can be oral. Although the contract itself need not be in writing, employees who have been employed for one month or more are entitled to a written statement of particulars of employment within two months of starting employment.
The following details must be included in the written statement:
the employer’s name
the employee’s name
the job title or a brief job description
the date employment began, the place of work and the address of the employer
the amount of pay and the interval between payments
hours of work
holiday pay entitlement
sick pay arrangements
pension arrangements
notice periods
where the employment is not permanent, the period it is expected to continue
where the employment is for a fixed term, the date when it is to end
grievance and appeal arrangements
disciplinary rules and any disciplinary or dismissal procedures
any collective agreements which directly affect the terms and conditions
where the person is required to work outside the UK for more than one month: the period he/she is to do so; the currency in which salary will be paid; any additional remuneration payable by reason of working outside the UK; and any terms and conditions relating to his/her return to the UK.
An employment contract can only be lawfully altered with the consent of both parties.
The courts have established that all employment contracts have the following terms in them:
to maintain trust and confidence through co-operation
to act in good faith towards each other
to take reasonable care to ensure safety and health in the workplace.
Notice period
A contract of employment should state the notice period that either party must give to the other to terminate the contract. Employees have a statutory right to receive a minimum period of notice from employers once they have been employed for one month.
These notice periods are:
One week’s notice for those with between one month and two years service.
Thereafter, an additional week’s notice for each continuous year of service, up to a maximum of 12 weeks’ for 12 complete years’ service.
In certain circumstances, both parties can waive their right to receive notice. Contracts can also require either party to give longer periods of notice.
Wages
The national minimum wage applies to all
workers over compulsory school leaving age. National minimum wage rates vary according to the age of the worker and whether or not he/she is in training.
The current rates are:
Adults over 22: £5.35 per hour
18 - 21 year olds: £4.45 per hour
16 - 17 year olds: £3.30 per hour
Hours
The number of hours an employee or worker may work in a week and the rest breaks they are entitled to are set out in the Working Time Regulations 1998. For general guidance on the Regulations see: www.dti.gov.uk/employment/employment-legislation/working-time-regs/index.html. There are further specific regulations that apply to mobile workers working in the road transport industry. All mobile workers (except the self-employed) have their hours of work regulated by the Road Transport (Working Time) Regulations.
Workers may not work, on average, for more than 48 hours per week (usually across a reference period of 17 weeks), 60 hours in any week or 10 hours in any 24 hour period if working overnight.
Mobile workers are not permitted to opt out of the average weekly working limit. However, they may agree by collective or workforce agreement, to extend the reference period from 17 to 26 weeks.
Under the Regulations, workers are entitled to a statutory minimum of four weeks paid holiday entitlement a year. Public holidays form no part of the four weeks minimum entitlement.
Statutory entitlement cannot be carried over from one year to the next. Workers cannot be paid in lieu of taking statutory holiday, except on termination of the employment.
Mobile workers are entitled to adequate rest, meaning regular breaks to guard against tiredness.
Sickness
Employers are required to pay statutory sick pay to employees who are off work due to illness or injury, after the third day of absence (subject to certain qualifications). This is currently £70.05 a week. Employers sometimes supplement statutory sick pay with contractual sick pay for a specified period.
Pensions
All employees are entitled to join an occupational pension scheme with the company after three months of service. If at such time the employer cannot provide an occupational pension scheme, it is obliged to offer a stakeholder pension scheme. The employer is not obliged to make contributions to the scheme.
Data protection
Employers have a duty to protect the personal and sensitive information of their employees. However, employers are allowed to process their employees’ data for internal administrative purposes. Information must be processed fairly and lawfully. See www.ico.gov.uk.
Part-time and fixed term workers
It is unlawful for employers to treat part-time workers less favourably than comparable full-time workers in their terms and conditions of employment, unless different treatment can be objectively justified. It is also unlawful for employers to treat fixed-term employees less favourably than similar permanent employees, unless different treatment can be objectively justified.
Health and safety
Employers have extensive obligations to safeguard the health of all of their employees, see
www.hse.gov.uk
Grievances
There are two statutory procedures, the standard grievance procedure and the modified grievance procedure. Where an employee has a grievance that could form the basis of an employment tribunal claim, one of these procedures should be followed.
The steps involved in a standard statutory grievance procedure are as follows:
The employee must set out the grievance in writing and send the statement to the employer.
The employer must invite the employee to attend a meeting to discuss the grievance.
After the meeting, the employer must inform the employee of his decision and notify the employee of the right to appeal against the decision.
The employee then has a right to appeal and must inform the employer of his or her wish to do so. The employer must then invite the employee to attend a further meeting.
After the appeal, meeting the employer must inform the employee of its final decision.
Where the employee has left employment the parties may use the modified grievance procedure.
This comprises the following steps:
The employee must set out in writing the grievance and the basis for it.
The employer must set out his response in writing and send the statement or a copy of it to the employee.
If the employer has requested the employee to attend the grievance procedure meeting, a worker will normally have the right to be accompanied by a colleague or trade union official.
See: http://www.acas.org.uk/media/pdf/s/g/acas_Disciplinary_folder_1.pdf
Another area of law to be wary of is that governed by the Transfer of Undertakings (Protection of Employment) Regulations 2006, which is known as TUPE. It applies to protect employees when businesses are bought and sold and when businesses outsource functions or bring them in-house.
When an organised group of people, eg employees - known as a stable economic entity - is transferred from one business to another and retains its identity after the transfer, the transfer falls under the scope of TUPE.
TUPE preserves employees’ terms and conditions when a business or undertaking, or part of one, is transferred to a new employer.
TUPE applies equally to relevant transfers of large and small businesses, and to public and private undertakings. This means there would be a relevant transfer if you sold your business or partnership or if your business bought and operated another business.
On the transfer of a business where TUPE applies, you should be aware of the following:
All employees of the seller who are employed immediately before the transfer automatically become the employees of the buyer on their existing terms of employment without breaking their continuity of service.
All rights, powers, duties and liabilities under the employment contract pass to the buyer.
Any dismissal will be automatically unfair where the sole or principal reason for the dismissal is the transfer itself or a reason connected with the transfer that is not an economic, technical or organisational (ETO) reason entailing changes in the work force. It will also be necessary to show that the dismissal was procedurally fair.
Employees may refuse to transfer to the buyer, but the effect is to terminate their employment without any right to compensation.
The seller and the buyer must inform and consult elected employee representatives or trade union representatives of their own affected employees in relation to the transfer. If these obligations are breached an employment tribunal can award up to 13 weeks’ actual pay for each affected employee.
However, not all transfers are relevant transfers. TUPE does not apply in the following instances:
Transfer by share takeover. When a company’s shares are sold to new shareholders, there is no transfer of the business - the same company continues to be the employer.
When a business transfers assets only eg if equipment is sold.
Transfers of undertakings situated outside the UK - although similar provisions apply in the EU.
Change of business identity, eg if the work or organisational structure changes radically.
Whether TUPE applies in any particular case depends on all relevant circumstances. In the event of a dispute, only an employment tribunal or a higher court can decide this. Guidance can be found on the dti website at www.dti.gov.uk/employment/trade-union-rights/tupe/page16289.html.
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