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?

• 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…

• 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

• 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.