The contractual rights of employees

Lawpack on March 27, 2020

When you hire someone, obviously you will express the major terms of their employment to them either orally or in writing. Of course, it’s preferable to detail their terms of employment in an employment contract in order to minimise future disputes; although oral terms may be just as binding as written ones, they are very much more difficult to prove.

But as well as these expressed terms, employment contracts also have what is known as ‘implied terms’ giving the employee contractual rights.

Why are implied terms not stated in the employment contract?

  • They are too obvious to be recorded
  • They are common practice within the particular business or industry and are precise, reasonable and well known
  • They are necessary to make the employment contract work
  • The parties to the employment contract have shown by their behaviour their acceptance of such terms of employment

What are common implied terms?

Your duties as an employer:

  • To pay wages
  • To co-operate with the employee and maintain mutual trust and confidence
  • To take reasonable care for the health and safety of the employee
  • To take reasonable steps to bring to the employee’s attention any contractual rights which are dependent on them taking action, but which the employee may be reasonably unaware of
  • To exercise pension rights in good faith
  • To deal reasonably and promptly with employees’ grievances
  • To give a reasonable period of notice of termination when no specific period of notice has been agreed

Employee’s duties:

  • To work for the employer with due diligence and care
  • To co-operate with the employer, including obeying lawful orders, and maintaining trust and confidence and not impeding the employer’s business
  • To follow a duty of fidelity, i.e. not compete with the employer and not disclose confidential information, unless in the public interest
  • To take reasonable care for their own safety and that of fellow employees
  • To give a reasonable period of notice of termination when no specific period of notice has been agreed

In addition to these implied terms, contract terms may be implied into an employment contract by legislation, for example, equality clauses which are implied by the Equal Pay Act 1970; these terms of employment automatically apply to any employment contract.

Contract terms may also be incorporated into an employment contract from other sources. Prime examples are terms of employment which may be implied into an individual contract through collective agreements and work rules or staff handbooks.

Are there any contract terms that are unenforceable?

  1. Unlawful terms of employment or terms contrary to public policy. For example, an employment contract which has the effect of being a fraud on HM Revenue & Customs or an employment contract under which a foreign employee works illegally without a work permit.
  2. Contract terms purporting to waive an employee’s statutory rights.
  3. Discriminatory terms of employment. For example, on the grounds of sex, race or disability.
  4. Contract terms in restraint of trade if the main purpose is to restrain competition. Such terms of employment are enforceable, however, if their main purpose is to protect something in which you, as the employer, have a legitimate business interest worthy of protection. For any such contract clause to be enforceable it needs to be carefully drafted, taking into account the nature of the employee’s work. If the contract clause is too wide, it will be void.
  5. Terms of employment which purport to exclude or restrict liability for death or personal injury resulting from negligence. In the case of loss or damage other than death or personal injury, a contract term may only exclude or restrict liability for negligence if it satisfies the requirement of reasonableness (Unfair Contract Terms Act 1977)

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Contract types and employer responsibilities

Lawpack on March 27, 2020

When employing staff the tax and employer responsibilities will depend on the type of contract they have and what their employment status is. So it’s a good idea to find out about different types of employment contracts. Read our guide below before you make your mind up.

Full-time/part-time employment contract for an indefinite period

The majority of employment contracts are for an indefinite period. They end by either party giving notice and the period of notice is usually specified in the employment contract but if not, there is an implied term that the contract may be ended by reasonable notice taking into account the ability of the employee, remuneration of the employee and what is usual in the trade.

The contractual notice period must not be less than the statutory minimum period of notice, but if the contractual notice is longer, then the longer period must be given.

As an employer you must give full-time and part-time employees the following:

  • A written statement of employment or contract.
  • The statutory minimum level of holiday.
  • A pay slip showing all deductions.
  • The statutory minimum level of rest breaks.
  • Statutory sick pay and maternity, paternity and adoption pay and leave.

You must also make sure of the following:

  • That these employees don’t work longer than the maximum allowed by law;
  • Ensure that you pay the minimum wage;
  • Have employer’s liability insurance;
  • Register with HMRC; and
  • Consider flexible working requests.

Part-time workers have a right not to be treated less favourably than full-time workers.

Fixed-term employment contracts

A fixed-term contract is one that has a definite end. Fixed-term contracts may provide that a notice to terminate the employment earlier than the original termination date can be given; if there is no notice provision, employment is guaranteed for the full period.

Fixed-term employees are entitled to the same rights as permanent employees. However, if the contract is for less than three months, the employee isn’t entitled to statutory sick pay or medical suspension pay.

Nanny employment contracts

When a nanny or domestic help is employed directly by a family, the family, as their employer, will have legal obligations. Nannies have basically the same statutory rights as all other employees. But there are some rights that they don’t have because their employer is exempt as a small employer.

Nannies have:

  • No right to the National Minimum Wage, if they are living with the family;
  • No right to a stakeholder pension;
  • No rights against discrimination on the grounds of disability;
  • No automatically unfair dismissal rights if the dismissal is due to pregnancy or giving birth (but the nanny will still have the right to claim unfair dismissal, it just won’t be automatically unfair).

As an employer you must:

  • Deduct the correct amount of PAYE from your nanny’s pay;
  • Work out what  National Insurance contributions you and your nanny have to pay;
  • Keep a record of your nanny’s pay, tax and National Insurance contributions; and
  • Pay the total tax and National Insurance contributions to HMRC.

There are organisations that carry out payroll services for families employing nannies. This is a good way to make sure that your legal obligations as an employer are met.

Help from Lawpack

If you want more in-depth information – from an employment lawyer – about all aspects of employment law, then read our guide Employment Law Made Easy. Packed with tips and expert advice on complying with employment legislation.

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Guide to maximum weekly working hours and opting out

Lawpack on March 27, 2020

Your employees don’t have to work for more than 48 hours a week on average unless they want to. But what if your employees are happy to opt out of these rights? Read on to see how it can be done.

The weekly maximum working hours

Normal working hours should be set out in the employment contract or written statement of employment particulars. Adult workers (over 18) can’t be forced to work more than an average 48-hour week. They can work more than 48 hours in one week as long as on average over 17 weeks it’s less than 48 hours per week.

An employee’s working week isn’t covered by the working time limits if they have a job:

  • where they can choose freely how long they will work (e.g. managing executive);
  • in the armed forces, emergency services and police (in some circumstances);
  • as a domestic servant in a private house;
  • as a sea transport worker, a mobile worker in inland waterways or a lake transport worker on board seagoing fishing vessels.

Since 1 August 2009 the 48-hour maximum working hours apply to trainee doctors. The hours are averaged over a 26-week period.

Opting out of the 48-hour week

If an employee (over 18) wants to work more than 48 hours a week, then they can opt out of the 48-hour limit. This is voluntary and must be in writing. It can’t be an agreement with the whole workforce, but employers are allowed to ask individual workers if they’d like to opt out. The only way to ensure that an employee has opted out of the 48-hour limit is to get it in writing. You can ensure this is done legally by downloading Lawpack’s Working Time Regulations 48-hour Opt out Agreement.

There are a number of employees who can’t opt out. They are workers such as airline staff or workers who operate vehicles (e.g. delivery drivers and bus conductors).

An employee can’t be sacked or unfairly treated (e.g. refused promotion or overtime) for refusing to sign an opt-out. If an employee refuses to sign an opt-out agreement and is dismissed, that dismissal is automatically unfair, no matter how long they have worked for.

An employee can cancel their opt-out agreement whenever they want, even if it’s part of their employment contract. They just need to give their employer seven days’ notice. This notice could be up to three months if the employee agrees this with their employer in the written opt-out agreement.

What counts as ‘working hours’?

As well as carrying out their normal duties, an employee’s working week includes:

  • job-related training;
  • job-related travelling time (e.g. as a sales rep);
  • working lunches (e.g. business lunches);
  • time spent working abroad, if the employee works for a UK-based company;
  • paid and some unpaid overtime;
  • time spent on-call at the workplace.

What doesn’t count as ‘working hours’?

An employee’s working week doesn’t include:

  • breaks when no work is done (e.g. lunch breaks);
  • normal travel to and from work;
  • time when they are on-call away from the workplace;
  • evening and day-release classes not related to work;
  • travelling outside of normal working hours;
  • unpaid overtime that they have volunteered for (e.g. staying late to finish something off);
  • paid or unpaid holiday.

What happens if, as an employer, I don’t ensure my staff observe a 48-hour working week?

There are penalties from the Health & Safety Executive and your local authority which include prosecution and fines. In addition, your employee can take action through the civil courts.

Help from Lawpack

This article has been adapted from Lawpack’s Small Business Handbook, a comprehensive guide to running your business efficiently and packed with business management tips and templates.

If you want more in-depth information – from an employment lawyer – about all aspects of employment law, then read our guide Employment Law Made Easy. Packed with tips and expert advice on complying with employment legislation.

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Statutory employee rights: Part 1

Lawpack on March 27, 2020

When your employees enter into an employment contract with you, they automatically become entitled to statutory rights (i.e. rights laid down by employment law) without any need for the
details of these rights to be written into the employment.  

A number of these statutory rights do depend upon the employee attaining a qualifying period of employment with your firm.

Here’s a summary of the statutory rights of employees so you can comply with employment law:

Employee Statutory Right #1: Non-discrimination 

You must not discriminate employees on the grounds of sex, sexual orientation, race, marital status, disability, membership or non-membership of a trade union, religion or religious belief and age.

Employee Statutory Right #2: Itemised pay statements

You must issue an itemised pay statement to all employees at the time of payment. Contents must include:

  • Gross earnings
  • Net pay
  • Fixed and variable deductions from gross earnings
  • The amount and method of payment (if the net pay is paid in different ways)

Employee Statutory Right #3: Equal pay for like work, or work rated as equivalent, or work of equal value

Employee Statutory Right #4: Maternity and adoption rights, and benefits

Female employees who are expecting a baby are entitled to time off for antenatal care, protection from dismissal and detrimental treatment, suspension from work on maternity grounds, the right to take maternity leave and return to work and statutory maternity pay (SMP). Employees (male or female) who adopt a child also have protection from dismissal and detrimental treatment, the right to take adoption leave and return to work and statutory adoption pay (SAP).

See our Maternity, Paternity, Adoption & Parental Leave Policy.

Employee Statutory Right #5: Notice of termination of employment

The minimum notice periods for terminating employment are as follows:

By you:

Length of service Minimum notice period
Less than 1 month Nil
1 month-2 years 1 week
2-3 years 2 weeks

and an additional week for each year of continuous employment to a maximum of 12 weeks.

By the employee: 1 week

Your employment contract can impose a duty to give a longer period of notice.

Employee Statutory Right #6: Guarantee pay

You must make ‘guarantee’ payments’ to employees with at least one month’s service, when they could normally expect to work, but when no work is available. Periods when employees are laid off because there is no work available must be agreed in advance, to avoid you being in breach of contract.

An employee is entitled to a maximum guarantee payment per day for up to five days in any period of three months where they are laid off. Therefore, there is an annual maximum.

Employee Statutory Right #7: Redundancy pay

Employees in a redundancy situation are entitled to a statutory redundancy payment if they have at least two years’ service. The calculation is made by considering the employee’s age, length of continuous service and gross average weekly wage.

Find out more about calculating redundancy pay with our Employment Law Made Easy Guide.

Employee Statutory Right #8: Healthy and safe working environment 

You must provide your employees ‘so far as is reasonably practicable’ with a safe place to work and access to the place of work, a safe system of work, adequate materials, competent fellow employees and protection from unnecessary risk of injury. If you employ more than five employees at any one time, you must prepare and bring to the notice of your employees a written statement of the firm’s health and safety policy.

Find out more on meeting the health and safety guidelines in the workplace with our Health & Safety Legal Guide.

The Working Time Regulations provide for an average 48-hour working week; minimum breaks and 11 consecutive hours rest in any 24-hour period; 5.6 weeks’ paid holiday and an average 8 hours work in 24 hours for night workers. This means that employees are prevented from working any overtime that would result in their average working week exceeding 48 hours. However, the Regulations enable individual employees to ‘opt out’ and work in excess of this 48-hour limit; any Working Time Regulations Opt Out Agreement must be in writing.

Employee Statutory Right #9: Sickness benefit

Subject to satisfying certain conditions, all employees are entitled to receive statutory sick pay (SSP) when they are absent from work for four or more consecutive days, up to a limit of 28 weeks. Unless the employee has a contractual right to normal pay, statutory sick pay is all you’re obliged to pay employees during sickness.

Find out more about calculating statutory sick pay with our Employment Law Made Easy Guide.

Employee Statutory Right #10: Remuneration on suspension on medical grounds

An employee is entitled to be paid for up to 26 weeks if they are suspended on medical grounds in compliance with any regulation or law which concerns the health and safety of workers. An employee is only entitled to claim a medical suspension payment if they have been continuously employed for a period of one month. An employee employed for a fixed term of three months or less, or under a specific task contract which isn’t expected to last for more than three months, isn’t entitled to a medical suspension payment.

Read more on employee statutory rights #11-19 with our article The Statutory Rights of Employees: Part 2.

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Why your company needs a Staff Handbook

Lawpack on March 27, 2020

When you, as an employer, are employing staff it’s vital for you to use an employee handbook to outline in writing the practices and procedures you want your employees to follow. A Staff Handbook is an easy way to let you put the company’s staff policies into one document.

But when should your company use an employee handbook and what should it contain? We answer the all important questions about how you, as an employer, can outline your staff policies:

When should I give my employees the Staff Handbook?

All of your employees should be issued with a handbook at the start of their employment and should then confirm that they have read and understood it.

The Staff Handbook should also be referred to in your employees’ employment contracts.

Can I, as the employer, amend the staff policies mentioned in the Staff Handbook?

You can amend the staff policies in the employee handbook at any time.

What does the Staff Handbook contain?

The handbook may contain a variety of procedures and will vary from employer to employer, but in nearly all cases the employee handbook should include the following:

  • Equal Opportunities Policy
  • Disciplinary Rules and Procedures
  • Grievance Procedure
  • Health and Safety Policy

Lawpack’s Staff Handbook covers all such staff policies.

The handbook can cover all administrative issues, so it’s important that you, as an employer, consider your own needs and requirements when preparing your own.

It’s quite common, for example, that an employee handbook deals with a number of matters, such as the logistics of overtime, taking time off for holiday and public duties, and for taking care of dependants.

Your company’s Staff Handbook should also include your company’s rules on staff sickness and absence, maternity and paternity leave, and parental leave. These arrangements will vary according to your company’s needs, although they will always need to be in line with statutory rules.

If your company wants to have a more detailed staff policy, then Lawpack’s Staff Handbook can help. It incorporates the following:

  • Dismissal and Disciplinary Procedure
  • Drug and Alcohol Policy
  • Staff Email and Internet Policy
  • Equal Opportunities Policy
  • Flexible Working Procedure
  • Grievance Procedure
  • Health and Safety Policy
  • Maternity, Paternity, Adoption and Parental Leave
  • Redundancy Procedure
  • Staff Sickness and Absence Policy
  • Data Protection Policy
  • Whistleblowing Policy

Should a Staff Handbook outline the use of telephones, email and the internet?

Yes. It’s essential for you, as an employer, to outline in your employee handbook the extent to which you will tolerate the use of the telephone, email and internet for personal use.

Outlining your staff policy in your handbook not only reduces the likelihood of employees overusing the telephone, email and internet, but also if they do abuse the system, you are in a stronger position to take disciplinary action against the employee because you can point to a clear procedure in your company’s handbook which has been violated.

An email and internet policy is included in Lawpack’s Staff Handbook but Lawpack’s Staff Email and Internet Policy can also be purchased separately.

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What you can and can’t say in a job advert

Lawpack on March 27, 2020

You can’t just say whatever you like in a job advert because you could find yourself breaking discrimination laws. Job adverts will be illegal if they discourage a certain group of people from applying. For example:

‘Salesman wanted…’

This is gender bias because the word ‘man’ excludes women. In this case it would be much better to say ‘salesperson’ or make it very clear in the advert that both men and women can apply.

Another example of discrimination in an advert is:

‘Single professional sought…’

This is illegal because it discriminates against married people.

Employers should bear in mind the following list when wording their job advert:

  • Never refer to ‘young graduates’ or ‘bright young thing’ or ‘mature applicant’ as they are all ageist.
  • You should always put adverts in publications that will reach the widest spectrum of people and don’t exclude men or women or a particular racial group.
  • Don’t stereotype men and women in a job advert.
  • Be careful about recruiting by word of mouth as this could restrict members of a certain race or sex.
  • Never make the length of residence in, or experience of, the UK a requirement of the job.
  • If a qualification is essential to the job, then don’t restrict it to a UK qualification.
  • You must not state or imply that a job is unsuitable for a disabled person unless there is a very clear job-related reason.
  • You must not state or imply that reasonable adjustments will not be made for a disabled person unless there is a very clear job-related reason.

Now you know what you should avoid putting in an advert. But what sort of things can you put in?

What to include in a job advert 

It’s important to have a written job description. You can use this to specify the most important duties and requirements of the post and use it to form the basis of your advert. The advert should include:

  • The qualifications and experience required
  • Any specific skills required
  • Experience with specific equipment
  • The salary and benefits offered
  • The person to contact
  • The required references

When you can discriminate legally in a job advert

It’s possible to legally discriminate in a job advert, if it’s a requirement of the job that the applicant is from a certain group; for example, only over 18s can sell alcohol.

You should consider including in your advert a statement of commitment to equal opportunities. This will show that you welcome applicants from all sections of the community.

If you want more in-depth expert information – from an employment lawyer – on how to employ someone, then read our guide Employment Law Made Easy. Packed with tips and expert advice on complying with employment legislation.

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A guide to employing temporary workers

Lawpack on March 27, 2020

Employers hoping to take on temporary workers could benefit from downloading a solicitor-approved temporary employment contract template that highlights your obligations to temporary workers as outlined by employment law.

The benefits of temporary working

Temporary workers are those employed on a short-term basis to fulfil certain duties, perhaps within a given time frame. One of the main benefits of employing a temporary worker is that they can be used to help companies meet demand for products or services during busy times of the year, for example at Christmas.

Employers must ensure that the worker has the appropriate qualifications required for the role where necessary.

The legal aspects of employing temporary workers

Temporary workers may be employed on a fixed-term contract which allows them to work either until the task is complete or up until a specified termination date. This matter will be decided when the employment contract is drawn up and the employer must comply with the agreement.

As such, employers would not be within their rights to terminate the contract ahead of time if the understanding was that the worker would continue to an end date. That is as long as they had no valid reason to terminate the agreement, such as in instances of misconduct.

Fixed-term contracts may also end when a specified event does or does not take place.

The employment rights of temporary workers

Unless there are outstanding circumstances, temporary workers on a fixed term are entitled to the same working conditions as their permanent employee counterparts after 12 weeks in the job. This means that they should receive the same pay, holidays, rest periods and working hours as everyone else employed by the company.

According to the Fixed-term Employment (Prevention of Less Favourable Treatment) Regulations, any employee on a fixed-term contract for four or more years is typically defined as a permanent employee by law if their contract is renewed or they are given a new fixed-term contract to fulfil by the same company.

There are exceptions to this provision, such as if the company needs to lengthen the extent of the original contract beyond four years under a collective or workplace agreement.

Fixed-term employees are subject to the same tax arrangements as permanent employees and in instances where the employers employ the worker directly, it is up to the employer to ensure that all the relevant paperwork is in order.

Employing temporary workers through an agency

If you employ a temporary worker through an agency, there are other pros and cons regarding quality, pay and paperwork.

Because the agency has hired the candidate itself, it means that they have been subject to their levels of scrutiny. This could mean that their suitability to the role is not within the same standards set by you. For this reason, it is a good idea to shop around with agencies and uncover the one you feel has exercised the most rigorous recruitment procedures. This would mean questioning the agency about the process and perhaps seeking evidence of their procedures.

The agency is responsible for ensuring that the temporary worker receives their rights under the Working Time Regulations and national minimum wage law. This reduces the onus of responsibility on you.

You will not pay the temporary worker directly but will pay the agency instead, who will take into account national insurance payments and holiday and sick pay on their bills. It could prove a more costly expense than employing the worker directly, after administration fees and profit margins are added to the expenditure.

As the employer, you need to forward your work and pay conditions to the agency which will ensure that these rights are passed on to the employee.

As employment law does not distinguish between permanent and temporary workers, they are entitled to the same pay and working conditions as those in the same or similar roles, qualifying for certain employment rights once the minimum period of continuous employment has been reached.

For more information about temporary workers, download Lawpack’s temporary employment contract form.

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