INTRODUCTION TO EMPLOYMENT LAW

The 3 areas of employment law which most concern the individual are:-

  • whether an employee has been “unfairly dismissed”; and, if so, what are the employee’s rights and remedies (how is the employee in title to by way of compensation for unfair dismissal);
  • is an employer entitled to dismiss an employee on grounds of “redundancy”; and, if so, what are the employee’s rights and remedies (how is the employee in title to by way of compensation in respect of redundancy);
  • whether an employee has been dismissed for “discriminatory” reasons.

The Contract of Employment: the right to claim against an Employer on dismissal

In every case, the first hurdle that an employee has to get over is to demonstrate that he, or she, is indeed an “employee”, as opposed to an “independent contractor”. The traditional distinction between an “employee” and an “independent contractor” was that whereas the employer could merely direct “what” work was to be done by an independent contractor, in respect of an employee and employer could direct “how” such work is to be done by the employee. The real test of whether someone is an employee of not is the “degree of control” exercised by the employer over the employee. The greater the exercise of control by the employer a more likely it is that the individual concerned is indeed an employee. An employer normally has the power to direct and control the work of an employee.

The reason it is important to distinguish between an employee and an independent contractor is that compensation for unfair dismissal, redundancy and discrimination only accrue employees, not independent contractors. It may also be important to distinguish between a contract of employment and a “contract of apprenticeship”.

In most cases, it will be readily apparent whether someone if an employee or not, and will usually have a written contract of employment (though a written contract of employment is not essential in order to establish that a person is an employee). The payment of “wages” or “salary”, or holiday pay, is another important pointer to the relationship of employment. Normally a regular, fixed sum is payable to an employee.

The law does not require any particular form for contracts for employment, but legislation imposes on employers the obligation to give to employees written particulars of the terms of their employment. By section 1 of the Employment Rights Act 1996, an employer, subject to certain exceptions, is obliged not later than two months after the beginning of an employment to give an employee a written statement identifying the parties, specifying the date when the employment began, and giving particulars of the terms of employment as follows:

  • the scale all rate of remuneration (pay) or the method of calculation;
  • intervals at which remuneration (pay) is paid;
  • any terms and conditions relating to hours of work including terms relating to normal working hours;
  • any terms and conditions relating to-
    • holidays and holiday pay (including entitlement to accrued holiday pay on the termination of employment);
    • incapacity for work due to sickness or injury, including provisions for sick pay;
    • pensions and pension schemes.
  • The length of notice which the employee is obliged to give an entitled to receive to terminate his contract of employment;
  • the title of the job which the employees employed to do, or a brief description of the work for which the employees employed;
  • where the employment is not intended to be permanent, the period for which it is expected to continue or, if it is for a fixed term, the date when it is to end;
  • even the place of work or an indication that the employee works at various places;
  • any collective agreements directly affecting the terms and conditions of employment; and
  • where the employee is required to work abroad for more than one month, various details of that employment abroad.
  • The written particulars must, in addition, specify any disciplinary rules applicable to the employee (or at least referred to a document reasonably accessible to the employee which specifies the rules). With effect from October 2004, these particulars must also cover the procedure which applies when an employee is disciplined or dismissed. If an employer fails to comply with his obligation to give his employee a written statement of the specified terms of employment, the matter may be referred to an employment tribunal which is empowered to determine which particulars ought to have been given. The tribunal is also empowered to “substitute other particulars”, as it may determine to be appropriate, when an incomplete or inaccurate statement has been given. In addition, with effect from October 2004, employment tribunal’s are entitled to award compensation (between 2 and 4 weeks pay) to an employee where the lack, incompleteness or inaccuracy of the employment particulars provided by the employer is established in the course of proceedings (eg for unfair dismissal).

Termination Employment: Periods of Notice

The contract of employment legislation prescribed minimum periods of notice which must be given to terminate contracts of employment of persons who have been continuously employed for one month or more. For less than two years’ continuous employment, not less than one week’s notice must be given by the employer; for two years or more, but less than 12 years, not less than one week’s notice for each year of service; four 12 years or more, not less than 12 weeks’ notice. An employee who has been continuously employed for one month or more must give not less than one week’s notice to terminate his contract of employment. The particular contract of employment in question should also be analysed, but such a contract takes effect subject to the above. In other words, the statutory minimum periods of notice cannot be excluded, or limited, by the express terms of the contract of employment.

Either party may “wave” his right to notice, or accept a payment in lieu of notice. This is often done. A payment in lieu of notice is normally to be regarded as “liquidated damages” for a breach of contract (by the employer) consisting in the refusal to allow the employee to work out his notice. Some payments in lieu of notice can be viewed as an ordinary giving of notice accompanied by a waiver of services by the employer which is accepted by the employee.

Not only does the contract of employment legislation provide for minimum periods of notice, it also provides for guaranteed minimum remuneration (pay) during such periods. If during “normal working hours” during the period of notice the employee is “ready and willing to work” but no work is provided by the employer, the employer must pay him or her for the normal working hours he or she has lost at an average hourly rate of remuneration (pay) based on the statutory calculation of a weeks pay.

Summary Dismissal

Summary dismissal, being dismissal of an employee without notice, is reserved for those cases where the employee’s conduct amounts to “gross misconduct”. As the justify ability of dismissal is normally raised as an issue within the broader category of “unfair dismissal” summary dismissal is now of less significance, and is only material in cases of grave misconduct by an employee.

The general rule, justifying summary dismissal of an employee, is that if the employee does anything which is incompatible with due or faithful discharge of his or her duty to his or her employer, he or she may be dismissed without notice. The employee’s conduct need not be dishonest. It is sufficient if it is “conduct of such a grave and weighty character as to amount to a breach of the confidential relationship” between employer and employee. For example where a manager of a betting shop of borrowed money from petty cash to place a bet in another betting shop, knowing his employer would not have granted permission for this borrowing had he been asked, the employer was justified in dismissing him summarily, even though the manager put an IOU in the till, and was not surreptitious. Other examples of conduct amounting to grounds for summary dismissal include “insubordination” (although it has been held that his use of obscene language on one occasion was not sufficient to justify summary dismissal); breach of confidence and disclosing trade or other secrets; taking a secret commission; drunkenness affecting the performance of duties; dishonesty or fraud. A conviction of a crime sufficient only if the conduct constituting the crime is inconsistent with the proper performance of his or her duties as an employee. Dishonesty committed by the employee outside the hours of employment will justify summary dismissal where it reveals the employee as “unfit for a position of trust and confidence”. And employee may be summarily dismissed if he or she wilfully disobey is any lawful and reasonable order of his employer provided that the disobedience must at least have had the quality that it is “wilful”. An employee is liable to be summarily dismissed if he or she performs his work so negligently that his or her employer’s business is likely to be seriously injured. An employer, when he or she dismisses his employee, did not allege any specific act of misconduct on the employee’s part as a ground for the dismissal; it is sufficient if such a ground did exist, whether or not the employer knew of it at the time of dismissal. But if the employer does know of the misconduct in question and thereafter continues the employment, he or she may be taken to have “waived” his or her right to dismiss the employee on that ground.