Employment

What is employment law?

UK employment law can be more complicated than you think. Individuals may be classified as employees, workers or independent contractors. Each of these different classes will have different rights and obligations.

Generally, ‘independent contractors’ have little or no employment rights, ‘workers’ are given some employment rights, but only ‘employees’ receive full protection, and then only after a certain time period has passed (for example, two years, in the case of unfair dismissal).

What is an employment contract?

An employment contract or employment agreement sets out the rights and obligations of the employee and the employer. Under UK law, every employee is entitled to receive a minimum set of Terms and Conditions of Employment (effectively a short form employment agreement) within two months of starting work.

Even without the legal requirement to do so, it obviously makes sense to put down in writing the terms which have been agreed, or the working practices which the employer expects from the employee, in order to avoid disputes down the line.

Do part-time employees have less rights?

No, by law, there is no difference between the rights of a part time and a full time employee.

How can a contract of employment be terminated?

If your contract of employment is for a fixed-term (say, 12 months), or it is stated to last until a specified task has been completed, then the contract will automatically terminate at that point.

Most employment contracts, however, are not for a fixed-term. Instead, they simply continue until one of the parties, the employer or employee, gives notice to terminate. The contract should state the length of the notice period which either side must give before terminating. By law, there is a minimum requirement of not less than one week for each completed year of service (up to a maximum requirement of 12 weeks’ notice).

It is perhaps not well known that, in most cases, employees can simply walk away from an employment contract without giving the correct notice period. Although, this is technically a ‘breach of contract’ by the employee, there is usually no legal penalty which can be applied to an employee in this case. However, the same is not true for the employer who would have to pay compensation if they were to terminate without giving the correct notice period.

Even if the correct notice period is given by the employer, after two years have passed from the commencement of the employment, the employer is not permitted to terminate unless it does so for a ‘fair reason’ (see below). Otherwise, the employer may face a claim of ‘unfair dismissal’.

What is unfair dismissal?

After two years or more working for an employer, an employee has a right not to be dismissed unless it is for one of the following ‘fair reasons’:

  • Lack of capability.
  • Misconduct.
  • Redundancy.
  • Illegality (if it would be illegal to continue the employment, for example if the employee can no longer work lawfully in the UK).
  • Some other substantial reason of a nature which justifies dismissal.

Even if one of these fair reasons exists, the employer should still go through a carefully planned procedure before terminating the employment, to avoid claims being made against them.

What is constructive dismissal?

Constructive dismissal occurs where an employee is forced to leave their job or to resign due to the conduct or actions of their employer. Examples, may include where the employee has been poorly treated or bullied, or the employer has attempted to unilaterally change their working terms and conditions (for example, by changing their role or reducing their salary).

In such a case, it may be possible for the employee to claim compensation against the employer for wrongful dismissal or unfair dismissal.

What is wrongful dismissal?

Wrongful dismissal means the employer has breached your contract. This can occur, for example, if the employer terminates the employment without giving the correct notice period, or breaches its duties and obligations to the employee, which may result in the employee leaving due to ‘constructive dismissal’.

What is redundancy?

Employers sometimes terminate the employment of an employee, by declaring that the employee is ‘redundant’. The employer may assume that this is an automatic right which they can use whenever they simply want to dismiss an employee. However, this is not correct, legally.

Redundancy is a very specific term that is defined in legislation as occurring where employment comes to an end because there is no longer a need for the employee’s role due to a reduction in demand for the business or due to changes in working practices. If this definition is not met correctly, then the employee will have a claim of unfair dismissal.

One tell-tale sign that a redundancy is not genuine, is where the employer simply replaces the leaving employee with someone else who carries out exactly the same role.

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