The Employment Relationship
PowerPoint presentation produced by Dr
Peter Jepson using ‘Employment Law
Made Easy’ - which was written by
Melanie Slocombe 2004.
This Lecture …
• Prior to this lecture you should have
read and précised pages 27-57 of
‘Employment Law Made Easy’.
• Please raise your hand to ask any
question.
• Do not chat while I am talking.
What is an employee?
• As per s.230 of the Employment Rights
Act 1996 an employee is “… an individual
who has entered into or works under a
contract of employment.”
• An employer might be sole trader,
partnership, company, unincorporated
association, private individual.
General Principles
Like all contracts - a contract of employment
must have essential elements. These are:
• An offer.
• An acceptance.
• Valuable consideration.
• Reasonable certainty as to the terms.
• An intention to create legal relations.
The contract of employment
Contract can be oral or in writing (or a
mixture of both).
• It is governed by ‘express’ and
‘implied’ terms.
• Employers have a legal duty (as per s.1
of ERA 1996) to issue the employee
with a written statement of the main
terms and conditions of employment
under which they are employed.
Contract of employment
• The statement of terms and conditions of
employment must be issued within two
months of the start of employment.
• It is the employers view of employment
terms and it is not part of the contract of
employment unless both parties have
expressly agreed. [A signature related to
receipt is not enough.]
What evidence relates to a
contract of employment?
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Job advert
Letter offering job
Job description
Pay slips
Contract of employment (if
given/agreed)
• Statement of particulars of
employment.
Statutory rights …
• (1) National Minimum Wage = £4.50
per hour over 22 (unless within first six
months of employ and under specific
training), £3.80 for those 18-21
(inclusive). Those aged 16 and 17 are
not entitled to NMW.
• For details see www.tiger.gov.uk
• How can you complain about low pay?
Statutory rights
• Equal opportunities
• Itemised pay statements (gross
earnings - net pay - fixed and variable
deductions).
• Equal pay for like work
• Maternity rights and benefits
Can complain via ET if denied any.
Notice of Termination
• Statute lays down minimum notice periods
[s.86 ERA 1996] (contract can extend these
periods).
• By the employer - less than a month = nil
period. 1 month to 2 years = one week. 2 to
3 years = two weeks and an additional week
for each year of continuous employment up
to a maximum of twelve weeks.
• By the employee: one week.
Statutory rights
• Guarantee payments (if laid off after a
months employment and no work is
available [must be agreed in advance]).
• Redundancy Pay
• Healthy and safe working conditions
• Sickness benefit (make a note of
limitations pages 31-34).
Statutory rights
• Remuneration on suspension on medical
grounds (s64-65 ERA 1996).
• Time-Off (e.g. holidays minimum of 20 days
paid leave a year - this can include 8 public
holidays). Part-time pro-rata. Workers
entitled to pay for each week of statutory
leave. Note: Employment contracts are often
more generous.
Statutory rights
• Provide a list of reasons why an
employee may be eligible to time off
from work (see pages 34-38 of
textbook) - s.50 ERA 1996.
Statutory rights
• Protected TUPE rights (TUPE 1981)
• Right not be unfairly dismissed (s.94
ERA 1996)
• Written reasons for dismissal (s.92 ERA)
• Written statement of terms and
conditions of employment (s.1 of ERA)
[see page 39 of textbook].
• Access to Stakeholder Pensions.
The Sunday Trading Act 1994
• Sunday shop working - if you are
employed to work only on a Sunday you
do not have these rights.
• You cannot be dismissed, selected for
redundancy or suffer any detriment for
refusing to work on a Sunday. There are
rights to opt out of Sunday working
(complex so look it up when required)
Types of contract
• The majority of contracts are for an
indefinite period.
• These contracts can be terminated by
either party giving notice - the period
of which should be specified within the
contract.
• If it is not, the contract may be
terminated upon reasonable notice …
What is reasonable notice?
Factors taken into account…
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The seniority of the employee.
The remuneration of the employee
The age of the employee
The length of service of the employee.
What is custom and practice in the
trade.
What else might an employer consider?
What is reasonable notice?
• The contractual notice must not be
less than the statutory minimum.
What is the statutory minimum notice
period?
Fixed Term Contracts
• This has a termination date. If there is
no notice provision - the contract lasts
for the full term of the contract.
• A fixed-term contract automatically
expires at the end of the term. Failure
to renew a fixed-term contract on
termination may lead to a valid claim
for unfair dismissal or redundancy pay.
Fixed Term Contracts
• Fixed-term employees have a right to
complain to an ET about an objectively
unjustified unfavourable treatment
compared to a comparable permanent
employee.
• Fixed-term employees should have the
same rate of pay as comparable
permanent staff.
Fixed Term Employees
• Should not be discriminated against in
areas like redundancy selection.
• They should have the same maternity
and paternity leave entitlement as are
available to permanent employees.
• They should have the same training
opportunities etc.
Other types of fixed contracts
• Contracts for specific tasks (e.g. to
build a bridge - sick pay only allowed if
contract is for more than 3 months).
• Short-term contracts - less than three
months so not entitled to statutory sick
pay (if extended they are).
• Service contracts (e.g. To play football
for Chelsea for 5 years).
Part-time contracts
Such people have a right not to be
treated less favourably than full-time
employees doing broadly similar work.
Read pages 47 and 48 of ELME and
produce a précis of these rights and
the employer obligations. Note also the
rights of both male and female
employees in relation to child care.
Terms of contracts
• Express and implied terms.
• Express terms are placed in writing.
• Implied terms can be implied if it is
necessary (for example: the contract
may say that you must arrive for 9pm but it can be implied that you are
entitled to go home at the end of the
day [even if it is not expressed].)
Express & implied terms
• The courts will only imply terms if it is
necessary (Liverpool City v Irwin
confirms it must be ‘necessary’ and not
‘reasonable’ to do so).
• However, provided the meaning of
express terms are reasonably clear,
they will uphold express terms.
Common implied terms
• They are too obvious to be recorded
• Common practice within the particular
business or industry
• Necessary to make the contract work
• Parties by their behaviour have shown
their acceptance of such terms.
Can you think of implicit terms?
Unenforceable terms
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To avoid tax.
Terms to opt out of statute.
Discriminatory terms
Restraint of trade (e.g. a footballer
will never play for any other club).
• Terms which purport to exclude or
restrict liability for death or injury.
Variation of contract
• An employment contract is an
agreement between the parties. It
follows that one side cannot
unilaterally change a contract.
• Thus, any flexibility in terms must be
accommodated within the terms of the
contract.
Variation of contract
• How can flexibility be built into a
contract?
• If, for example, the contract refers to
the Staff Handbook - as issued from
time to time - it follows that change is
built into the contract via the staff
handbook.
Variation of contract
• However, even flexible terms must be
applied reasonably.
• For example, suppose you work in
Staines and there is a mobility clause
that requires you to work anywhere in
the UK. Does that mean you must
start tomorrow in Glasgow?
Offering new terms
• If an employer offers new terms - the
employee can either accept or reject
them.
• If I am offered a new job of Manager
and I accept it by doing it - my action
of doing it could be enough to signify
acceptance. However, if I write back “I will do it but want more money” the terms remain un-determined.
Offering new terms
• If I reject the terms the only other
option may be to dismiss me and then
offer employment on new terms.
• The problem with this approach is that
the employer could be seen to be in
breach of contract and face unfair
dismissal and/or a redundancy claim.
Staff Handbook
• Should contain - Equal Opps Policy
• Disciplinary Rules and Procedures
• Grievance Procedure (now very
important)
• Health and Safety Policy.
See model Staff Handbook on page 62 of
ELME.
Use of telephone and email
• Employers need to make clear the
extent to which they will allow use of
telephone calls/emails.
Read, précis and discuss the issues raised
on pages 53-55 of ELME.
Self-employed
• Often referred to as a ‘contract for
services’ • Break up into Law Firms - provide a
list of issues that distinguish a self
employed person from an employed
person.
• Also, list the practical and legal
implications
Read, discuss, present
• Break into Law Firms - as per E5 - to
discuss and present pages 58-77.