START OF THE EMPLOYMENT RELATIONSHIP
Who can work in the UK?
Subject to some restrictions which apply to nationals of the newer member states, all citizens of the European Economic Area (EEA) and Switzerland have the right to free movement within the EEA, including the UK, and may work for employers, in self-employment, or establish a business. Any spouse or other qualifying family member will have virtually the same rights to enter, reside in and remain in the UK as the relevant EEA national.
Otherwise and except for Swiss nationals and Commonwealth citizens with a right of abode, nationals of countries that do not belong to the EEA generally do not have any right to enter the UK. Permission to enter and work in the UK can be obtained:
• as a business visitor (but the right to work is very limited and does not include taking employment);
• through the points-based system; or
• by one of the few routes which remain outside of that system
What are the main sorts of employment contract in the UK?
The main sorts of employment contract are the indefinite term contract and the fixed term contract. It is possible for an employee working under either sort of contract to work part-time.
A business may also choose to engage a casual workforce (who would not normally be employees) and this is usually done under a casual or zero-hours contract. Alternatively, a business may source labour via an employment agency but would not have a direct contractual relationship with the agency worker(s) supplied as part of such an arrangement.
What are their main features?
The main difference between an indefinite term and fixed term contract is that the former is terminable on notice whereas the latter usually terminates automatically on the expiry of the fixed term. The content of both is otherwise largely similar and it is advisable, in any event, to include a notice period in a fixed-term contract to bring it to an end earlier than the expiry of the fixed term if needed.
Casual workers’ or zero-hours contracts should be flexible and avoid imposing any obligation to offer or accept work. There is a relatively new prohibition on including “exclusivity clauses” in such contracts to avoid casual workers from being unable to accept work elsewhere when work is not available.
What information should employees be given in the UK?
All employees who have worked for more than one month, with the exception of certain people employed as seamen are entitled to receive a statement of minimum employment particulars. This should include the following:
The statement must contain:
• the names of the employer and employee;
• the date when the employment began;
• the date on which the employee's continuous employment began;
• the scale or rate of pay or the method of calculating pay;
• the intervals at which the employee is entitled to be paid (i.e. weekly, monthly or other specified intervals);
• the notice that the employee is required to give and entitled to receive;
• the employee's job title or a brief description of the work they are employed to do;
• the employee's place of work or, if the employee works at various locations, an indication of that and the address of the employer; and
• any collective agreements which directly affect the terms and conditions of the employment, including, where the employer is not a party, the names of the parties to the collective agreements;
• any terms that have been agreed concerning hours of work;
• any terms relating to holidays (including public holidays) and holiday pay. The particulars given must be sufficient to enable the employee's entitlement, including any accrued entitlement on termination of employment, to be precisely calculated;
• any terms relating to sickness absence and sick pay; and
• any terms relating to pension and pension schemes.
If the employment is not intended to be permanent, the statement should also give the period for which it is expected to continue, or, if it is for a fixed term, the date it is to end.
Additionally, where the employee is required to work outside the UK for a period of more than one month, the statement should specify:
• the period for which they are to work outside the UK
• the currency in which remuneration is to be paid while they are working outside the UK
• any additional remuneration payable to him, and any benefits to be provided to, or in respect of, him by reason of his being required to work outside the UK; and
• any terms and conditions relating to their return to the UK.
The statement must also include a note:
• specifying any disciplinary rules applicable to the employee (or referring the employee to a reasonably accessible document containing them, e.g. a handbook)
• specifying any procedure applicable to the taking of disciplinary decisions relating to the employee, or to a decision to dismiss the employee (or referring the employee to a reasonably accessible document containing them)
• specifying (by description or otherwise) a person to whom the employee can apply if dissatisfied with any disciplinary decision relating to him or any decision to dismiss him and a person to whom the employee can apply for the purpose of seeking redress of any grievance relating to his employment, and the manner in which any such application should be made
• where there are further steps consequent on any such application (e.g. a right of appeal), explaining those steps (or referring the employee to a reasonably accessible document containing them).
If any of the terms that have to be included in the statement change, the employer must provide the employee with a written statement of the changes at the earliest opportunity and, in any event, not later than one month after the change in question. If the change results from the employee being required to work outside the UK for a period of more than one month, the written statement of change must be given when they leave the UK to begin work, if that is earlier.
DURING THE EMPLOYMENT RELATIONSHIP
What are the main employment rights in the UK?
The main rights for employees are as follows:
• The right to receive minimum employment particulars (see above);
• The right to be paid the National Minimum Wage (known as the National Living Wage for those aged 25 and over);
• The right to be paid Statutory Sick Pay depending on certain conditions;
• The right to be auto-enrolled into a suitable pension scheme (and for minimum contributions to be made) depending on certain conditions;
• The right not to be unfairly dismissed after two years’ employment;
• The rights not to be automatically unfairly dismissed at any time in certain, specified circumstances,
• The right to daily and weekly rest breaks (see below);
• The right to annual paid leave (again, see below);
• The right to minimum periods of notice upon termination; and
• The right not to be discriminated against.
Workers enjoy some but not all of these rights – importantly workers are not entitled to protection from unfair dismissal nor do they have the right to receive a statutory redundancy payment.
What are the maximum daily, weekly, monthly and annual working hours permitted by law?
Daily working time
Under the Working Time Regulations 1998 (WTR), workers are entitled to an eleven hour uninterrupted rest break in any 24 hour period. Thus, the maximum amount of daily working time cannot therefore be more than thirteen hours so as to allow this rest break to be taken. In very limited circumstances (in which case compensatory rest will usually have to be given as soon as possible), the rest period may be modified.
Workers working more than six hours are entitled to a twenty minute rest break.
Weekly working time
Workers must normally work no more than 48 hours per week, averaged out over a 17 week reference period.
Workers can, however, choose to work longer by opting out of the limit but must be allowed to cancel the opt out by giving between 7 days’ and 3 months’ notice.
Additionally, workers are entitled to a 24 hours’ uninterrupted rest per week (or 48 hours’ uninterrupted rest per fortnight), in respect of which a worker cannot opt out (although see general comments below).
Monthly and annual working hours
Although there is no maximum prescribed by law, a workers’ monthly and annual working hours are limited, indirectly, by the requirements for them to take weekly rest breaks as set out above and also 28 days’ annual leave across the holiday year (pro-rated for part-time workers).
Workers can voluntarily choose to work additional hours and, in effect, thereby forego their rest entitlements under the WTR, provided that their employer does not breach the rules on night working (which are outside the scope of this survey) and there is no additional foreseeable risk to the worker’s health and safety.
If it is genuinely the worker’s choice to forego his or her rest entitlements, there is no requirement for his or her employer to provide compensatory rest for any such forgone rest breaks. However, in order to comply with its general health and safety duties, it is recommended that employers monitor those working overtime to ensure they get adequate time off.
Employers must not refuse to allow the relevant rest breaks and/or otherwise oblige or require a worker to work during a period which would otherwise be a rest period or rest break unless they can rely on one of the special cases or exemptions permitted by the WTR, for example in respect of shift workers and autonomous decision-makers.
The WTR also contain special regulations for young workers which are outside the scope of this survey.
Is there a required minimum number of hours?
Employment contracts are not subject to a minimum number of hours.
What is the minimum holiday entitlement?
Full-time workers are entitled to a minimum of 28 days’ holiday in each holiday year which can either be the calendar year or a annual period set by the employer. Holiday entitlement for part-time workers (including casual workers when they are actually working) is pro-rated according to the hours they work.
This minimum holiday entitlement can include bank and public holidays if the employer wishes of which there are usually eight in England and Wales – NB – bank holidays in Scotland and Northern Ireland may vary.
Can an employment contract be modified while it is still in force? If so, under which circumstances?
Employment contracts can be modified by agreement between the parties – usually this is done in writing.
Additionally, some employment contracts may contain a power entitling the employer unilaterally to amend the contract although case law suggests that this power is limited to relatively minor changes only.
Where the employer recognises a trade union, certain terms in individual contracts may be amended by the result of any particular collective bargaining round for those employee who fall within the relevant collective bargaining unit.
Are any particular employment relationships subject to special protection?
All employment relationships are protected by the Equality Act 2010, with all employees (and most workers) being entitled to protection from discrimination on the basis of the various protected characteristics set out in that Act.
Pregnant employees and those who are on maternity, adoption, paternity or shared parental leave benefit from additional protections around returning to work after maternity leave (the exact rights depend on the exact length of leave taken) and there are additional protections regarding redundancy situations arising during some of these periods of leave.
Employees who blow the whistle on any malpractice or breach of legal obligation in the workplace (provided they do so in a particular way) are protected from detriment and dismissal as a result.
Finally, there are a number of categories where dismissal would be automatically unfair and which require no length of service before a claim can be brought. These include pregnancy/maternity, health and safety, acting as a union or works council representative and where the employee is dismissed for asserting a statutory right but the complete list is longer.
Are there any obligations to consult with a works council and/or to undertake collective bargaining?
Trade union recognition is, for the most part, voluntary in the UK although in some circumstances a trade union may seek compulsory recognition via the Central Arbitration Committee. Where a trade union is recognised, the employer should undertake collective bargaining as set out in the relevant recognition agreement.
In certain circumstances, employers may be required to set up and consult with a works council both within the UK and with a European Works Council where certain conditions are met.
Otherwise, in circumstances involving a business transfer or service provision change or a collective redundancy situation, an employer is obliged to consult with employee representatives.
The employee representatives with whom the employer must consult in these situations are any trade union representatives recognised for any category of affected employee, or in any other case, elected employee representatives for any other category of affected employee. If there are no relevant trade union representatives, the employer can choose to consult with either:
• existing employee representatives, if they were appointed or elected by the affected employees, and they have authority from those employees to receive information and to be consulted about the transfer or service provision change on their behalf (this is assessed by considering the purposes for, and the method by, which they were appointed or elected); or
• employee representatives elected specifically for the purpose, in an election satisfying the requirements of the relevant regulations.
There is a limited exception for micro-businesses who employ less than 10 employees and who can consult with the employees direct in a business transfer/service provision change situation.
In the case of a collective redundancy situation, there are set periods for which the consultation must last depending on the numbers involved. Consultation on a business transfer or service provision change must take place long enough before the transfer or the date of the service provision change to enable meaningful consultation to take place.
END OF THE EMPLOYMENT RELATIONSHIP
When and how can an employer terminate an employment relationship?
Save in cases of gross misconduct or gross negligence (where immediate termination without notice may be appropriate), an employer should normally terminate the employment relationship by giving the employee the notice required under the contract of employment. The period of notice in the contract must be at least equal to the statutory minimum notice periods prescribed by law (i.e. one week’s notice after one month’s service, increasing by one week for each completed year of employment up to a maximum of twelve weeks).
The employer should have a fair reason for the dismissal of which five are recognised by law – conduct, capability, redundancy, illegality and ‘some other substantial reason’. In addition, and depending on the reason for the dismissal, a fair procedure must be followed – the exact steps to be taken will depend on the chosen reason for the dismissal. Where the employer does not have a fair reason and/or does not follow a fair procedure, it is at risk of a claim for unfair dismissal from the dismissed employee. Employees must, however, normally have two years’ service to be able to bring such a claim although a claim for automatic unfair dismissal which is not dependent on any length of service is possible in certain, specified categories and where the dismissal is itself discriminatory.
When and how can an employee terminate an employment relationship?
An employee should normally terminate an employment relationship by giving the notice set out in their contract of employment. However, and in cases where the employee claims that the employer’s behaviour towards or treatment of them has made the employment relationship untenable, an employee may resign immediately and without giving notice. In such cases, the employee may then seek to bring a claim for wrongful and/or unfair dismissal.
What are the economic consequences in each case?
Regardless of the circumstances of termination, an employee should normally be paid in respect of any accrued but unused holiday entitlement as at the date of termination. Additionally, the employee should be allowed to work his/her notice period or receive a payment in lieu of it save in cases of gross misconduct or gross negligence.
Employees with more than two years’ service and who are made redundant are entitled to a redundancy payment which is calculated according to a set statutory formula which is based on the employee’s age, length of service and weekly pay (capped at £479 per week).
Employees who believe they have been unfairly dismissed may take their case to an Employment Tribunal but must normally have at least two years’ service to do so. If they are successful, the Tribunal may award them compensation which would consist of two elements: a basic award (which is calculated in the same way as a statutory redundancy payment) and a compensatory award which is usually capped at the lower of a year’s salary or a set statutory amount (currently £78,962 although this changes every April).
Employees who believe they have been dismissed for a discriminatory reason or because they are a whistleblower may also take their case to an Employment Tribunal and no minimum length of service is required. In the event of a potential claim, compensation is potentially unlimited (although this is determined by reference to the loss of earnings caused by the dismissal) and an award for injury to feelings is also potentially available.
Are there any situations in which an employment relationship would terminate automatically and without the need for action by either party? If so, what are they?
Fixed term contracts will end, without the need for any notice, at the end of the specified fixed term although the expiry of a fixed term contract does amount to a dismissal under English law and so care should be taken before proceeding with the expiry.
The death of the employee terminates the contract automatically. Additionally, the death of the employer will also terminate the contract automatically unless (in the case of a personal employer) his/her trustees or personal representatives choose to continue the employment. If the death of the employer does terminate the contract, this is deemed to be by reason of “frustration” but the employee is then entitled to receive a statutory redundancy payment.
In other rare cases, an employment contract may terminate by reason of frustration where the contract can no longer be performed but this is only in limited circumstances.