There are three main types of statutory restriction:
Discrimination because of any of the ‘protected characteristics’ featured in the equality legislation is unlawful.
Membership of a trade union
It is unlawful to refuse employment on grounds that a person:
◉ is, or is not, a member of a trade union
◉ will not agree to become, to cease to be, to remain or to refuse to be a member of a trade union
◉ will not agree to make payments or have deductions made from pay for not being a member of a trade union
◉ features on a prohibited ‘blacklist’ (see below).
Compensation for a successful complaint to an employment tribunal can be up to £86,444.
Note: legislation prohibits the making, use, sale or supply of ‘blacklists’ of trade unionists. Infringements are subject to an action for breach of statutory duty. The court can issue orders to restrain or prevent a party from breach and can award damages (which may cover injury to feelings). Separately, proceedings in the employment tribunal are available for alleged refusals to employ (see above) and for discrimination and dismissal to do with reliance on information on a ‘blacklist’.
Employment of illegal migrants
For employment that started on or before 28th February 2008, it is a criminal offence to employ a migrant aged 16 or over who does not have permission to work in the UK. The offence carries a fine of up to £5,000.
For employment that started after 28th February 2008, there are two types of offence:
◉ negligently employing an illegal migrant. This carries a ‘civil penalty’ of up to £20,000. The employer has a possible defence if it conducted a pre-employment check of one or more acceptable documents (the legislation provides a list of these) that prove the person’s right to work in the UK, either indefinitely or for a limited period. However, if it is for a limited period, any defence derived from the pre-employment check will lapse, unless further checks have been made.
If TUPE applies, the incoming employer has 60 days to comply with the checking requirements for this offence.
◉ knowingly employing an illegal migrant. Conviction following indictment for this offence carries a prison term of up to five years and/or an unlimited fine.
In both cases it is not only the employing company that faces prosecution. Its directors, managers and other senior officers can also be prosecuted if the offence is committed with their consent or collusion, or because of their neglect.
It is a defence to show that, before recruitment, the employee produced a document specified in the legislation that appeared to refer to him or her and the employer kept it or took a copy of it. This defence applies even if the document turns out to be fraudulent, unless the employer had reasonable cause to believe that it would be illegal to employ the person.
Slavery and Human Trafficking Statement
Commercial organisations (those supplying goods or services, even if their aims or functions are primarily charitable, educational or public) with a demonstrable business presence in the UK and a minimum annual turnover of £36 million (including that of any subsidiaries, wherever they conduct business) are required, for each financial year ending on or after 31st March 2016, to produce and publish an annual Slavery and Human Trafficking Statement.
The statement must include either a description of steps taken during the year to ensure slavery and human trafficking is not taking place in any part of its own business or supply chain or a declaration that no such steps have been taken.
It must be approved by the organisation's directors, be signed by one and published on the organisation's website (with a clear link from the homepage).
The duty is enforceable by civil proceedings brought by the Secretary of State for Home Affairs.
A contract of employment (and a contract for services) is formed as soon as a candidate accepts an offer of employment from an employer. However, a candidate’s acceptance will have no effect if the employer has communicated withdrawal of the offer before that acceptance is received.
It is also legitimate for an offer to make any agreement on subsequent acceptance conditional on the prospective employer’s receipt of satisfactory references, criminal record checks and medical reports (but do note that enquiries about a candidate’s health before an offer or shortlisting could be the subject of enforcement action. If those conditions are not satisfied, the contract did not, technically, ever come into being and employment can be terminated.
Once a contract is formed, the employee (or worker) and the employer are bound by its terms. A basic contract will be created even before the work has started or payment has been made for it. This contract could be terminated before the person starts work. If, as sometimes happens, an employer terminates the contract without notice (often saying, incorrectly, that ‘the offer is withdrawn’), the amount of damages is normally equivalent to pay for the contractual period of notice or, if none is specified, ‘reasonable notice’.
A contract can be either:
◉ ‘open-ended’, of indefinite duration (sometimes called ‘permanent’) but capable of being ended with a period of notice; or
◉ for a limited term (the parties agree at the outset that it will expire on a given date or on the completion of a particular task or occurrence of a specified event), but often capable of being ended sooner with a period of notice.
Common misconception (1)
‘….the expiry of a limited-term contract cannot have any legal consequences’
It can, even though the parties agreed at the outset that it would come to an end. Expiry without renewal amounts to a dismissal. And, although the employer generally has a head start in defending any allegation of unfair dismissal (the expiry was agreed at the outset and is often because there is no more work), there can be problems.
Difficulties can arise if a particular employee was not offered continuation in the post under another contract (and someone else was recruited) because of some unacceptable reason. Or, it could be that, although the particular post lapsed with the expiry of the contract, there was alternative employment that was not properly considered.
In any event, there is always the need for an employer to notify (or remind) the employee of the prospect that employment will end and to apply an appropriate pre-termination procedure.
To reduce the likelihood of, and scope for, misunderstanding or dispute, a written contract or a written record of the main provisions is desirable.
The written statement of employment particulars
In any event, it is a statutory requirement that an employee must be provided with this statement within two months of starting work. The statement is not, strictly, the contract of employment – it is merely evidence of the main terms of the contract. However, employers often include the subjects required by law (see the list below) in a broader, formal contract of employment, which also contains provisions on other matters (such as company cars, other benefits, and restrictions on post-termination activities).
What the statement of employment particulars must contain:
1 date(s) when employment and continuous employment began
2 scale or rate of remuneration or method of its calculation
3 intervals at which remuneration is paid
4 hours of work
5 holiday entitlement and arrangements
6 place of work or, if various places of work are contemplated, an indication of that and the employer’s address
7 job title or brief description of the work
8 arrangements for sickness and pension
9 disciplinary rules and procedure, and procedures for dismissal
10 grievance procedure
11 particulars of any collective agreements directly affecting terms and conditions or, if none, a statement to that effect
12 entitlement to notice
13 expiry date of a fixed-term contract or the expected duration of any other temporary contract
14 if the employee is required to work outside the UK for more than one month, the duration of that period, any additional remuneration or benefits and any terms and conditions about return to the UK.
Information can be given in instalments and by reference
Employment particulars (1) – (14) may be given in instalments, as long as the employee is provided with all the information within two months of starting.
Points (1) to (7) must, however, be contained in a single document. This is known as the ‘principal statement’. Items (8) to (14) may also be in that document, or in a subsequent statement.
For items (8) to (11), it is permitted to make reference to other documents, specifying where those other documents may be found. For item (12), it is permitted to make reference to legislation or a collective agreement with a trade union.
If no information is to be provided under any heading, this must be stated.If there are changes to the required content
Any change to the required content of the statement must be notified to the employee personally, in writing, within one month of the change.
This does not, in itself, mean that the employer has the legal right to change contractual terms without the employee’s consent – it simply imposes an obligation on the employer to record a change that has occurred.
The employee's right to consult the employment tribunal
An employee can apply to the employment tribunal to determine employment particulars.
In addition, if an employee succeeds in a claim to the tribunal about a separate right (such as unfair dismissal) and the tribunal finds that the employer has not complied with the duty to provide particulars, it can award two or four weeks’ pay (at a maximum of £525 per week) to the (ex-)employee.
Change alert: Changes expected in April 2020 are that the right to receive written terms and conditions will apply to workers, as well as employees, and will need to be provided on the first day of employment.
There are four main types of contractual term:
◉ Express – they have been stated orally and/or recorded in writing. They have been expressly agreed between the parties and can only be overridden by legislation. An express term will be void if it attempts to deprive someone of statutory rights.
◉ Implied – derived from case law, where necessary, to plug gaps left by the express terms and make sense of the employment relationship.
◉ Incorporated – expressly or by implication, from other sources such as a collective agreement, works rules or company handbook. But terminology can be important. In one case, the (unsuccessful) claimant’s statement of employment terms said the ‘basic terms and conditions of [your] employment are in accordance with and subject to the provisions’ of the collective agreement. The collective agreement included a redundancy procedure. But the court decided it was not incorporated. The meaning of the words used was that ‘the basic terms and conditions’ were those in the collective agreement. The basic terms were only those required by the statutory principal statement of employment particulars (see above) – so the redundancy procedure was not contractual.
◉ Statutory – derived from provisions of statutes (such as an ‘equality clause’ inserted by the law on equal pay).
Implied terms exist in every contract. They are not shown in the statement of particulars or a written contract of employment, yet they still place obligations on the employer, the employee, or both. Implied terms are those that are:
◉ regarded as integral to a personal relationship, such as mutual trust and confidence, or the exercise of reasonable care and skill;
◉ considered so obvious to the effective working of the relationship, or a particular aspect of it, that the parties would have included them had they been asked or thought about it; or
◉ based on ‘custom and practice’ or the conduct of the parties.
The relationship between implied terms and express terms
An implied term in a contract cannot override an express (explicitly stated) term that contradicts it on the same subject (an aspect of pay for example, such as overtime rates). However, implied terms are often about standards of conduct. For example, say a contract contains the express right to put the employee on ‘other duties’. It is possible for that right to be exercised in such a harsh or unreasonable way that it amounts to a breach of an implied term (particularly that of trust and confidence).
The importance of trust and confidence
The implied obligation of trust and confidence is so central to employment that any breach of it entitles the injured party to treat the contract as not just breached but also ended. An injured employer will be able to dismiss without notice (generally, only provided that a proper investigation takes place and a satisfactory procedure is followed). A wronged employee will be able to resign and to be treated as ‘constructively’ dismissed.
‘That’s it, I’ve had enough’
How does one decide whether a party has terminated a contract?
In many cases, there will be no doubt. The intention of the employer or employee will be quite clear from the natural meaning of the words used in a letter or a conversation. And subsequent behaviour will generally confirm the fact.
But there are situations in which the context and significance of words and/or actions have to be considered more carefully, either by the party to whom they are addressed or by the employment tribunal. Ambiguity of wordings and contradictory messages are often the problem. On other occasions, even combinations of words with a superficially clear meaning merit further evaluation.
For example, in a heated dispute, an employee says on leaving, ‘That’s it, I’ve had enough’. If the employer takes that utterance literally and proceeds to treat the employee as having resigned, there may be difficulty.
Many of the immediate, post-departure measures that an employer takes (P45, collection of company property, denial of access to the computer system) are the same as those that are taken when there is a dismissal. This means that an overly hasty, unverified or unforgiving response to words spoken by an employee in the heat of the moment can end up as amounting to exclusion by the employer and, effectively, a dismissal.
Contracts of Employment
A contract of employment is contract of service (or apprenticeship), whether express or implied and, if express, whether oral or in writing. Whether or not an individual is working under a contract of employment will determine whether they are entitled to certain statutory rights, such as statutory redundancy payment and statutory maternity pay and the right not to be unfairly dismissed. This can be contrasted with a contract for services where the relationship between the parties is not that of employer and employee. For a contract of employment to arise there must be an obligation to personally perform the work, mutuality of obligations between employer and employee, and a sufficient element of control over the employee's work.
There are different types of contract. Generally, a contract is based on freely-given agreement. So an employer has the freedom to decide with whom to make a contract and with whom not to. There are some restrictions on this freedom, most of which are in the laws against discrimination. The detailed contents, or ‘terms and conditions’, of a contract between an employer and employee or worker record the agreed rights and duties, the provisions for terminating the contract and, sometimes, responsibilities (such as confidentiality) after termination.