Global Employment Law Guide |
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England and Wales |
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(Europe) Firm Womble Bond Dickinson Updated 15 Apr 2021 | |
What are the different categories of employment status (for example, employee, worker, self-employed individuals, etc)? | Under the current law, there are three categories of individuals providing their services in the job market:
An employee is defined by statute as an individual who has entered into or works under a contract of employment. A worker is defined as an individual who has entered into or works under (a) a contract of employment, or (b) any other contract, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not that of a client or customer of any profession or business undertaking carried on by the individual. It is clear from the first part of the test ("limb (a)") that all employees are workers. However, it is the second part ("limb (b)") that has been subject to extensive scrutiny by the tribunals and courts to determine what types of working arrangements fall within its scope. Individuals who are not employees but who satisfy the worker test are sometimes referred to as "limb (b) workers". Anyone who is neither an employee nor a worker will be self-employed for employment law purposes. There has been discussion globally on whether workers in the 'gig economy' e.g. Uber drivers are considered workers, employees, self-employed or an entirely new status. Presently in the UK, they are considered to be workers but each case turns on its facts so it is hard to generalize in relation to employment status. |
Are there different types of employment contracts (for example, fixed-term, indefinite)? | There are many different types of employment contracts:
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What requirements need to be met in order for an employment contract to be valid? | The terms of a contract are the rights and obligations that bind the parties to the contract. They can be express, implied or incorporated from other sources. The basic principles of contract law are that there must be:
These general principles apply to an employment contract in the same way that they apply to any other type of contract. Employees and workers have the right to be provided with a written statement of their terms and conditions on or before the first day of work. The Employment Rights Act 1996 sets out various information that must be included. |
Are part-time employees afforded the same rights as full-time employees? | Discrimination against part-time workers Is prohibited. Under the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000, a part-time worker has the right not to be treated less favorably than a full-time worker doing the same or a similar job for the same employer. It should be noted that the full-time individual used for comparison must be real and not hypothetical. |
Can employment contracts be assigned? | A contract for personal service cannot be assigned from one employer to another without the employee's consent, because of its personal nature. This is known as the Nokes principle (Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014). |
What rights do employees have (to object, to severance), if any, when the company they work for is transferred as a going concern? | When a business is transferred as a going concern the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) will usually apply. TUPE introduced several forms of protection for employees employed by an organization being transferred in this way.
With regard to an employee's ability to influence a transfer as a going concern, they can object to their employment being transferred to a new employer under TUPE but they cannot stop the transfer. Instead, if they object then the starting point is that their employment is simply treated as coming to an end on the date of the transfer without there being a dismissal. |
Do you have statutory rights for employees on change of control of an employer? If so, please give the statute. | No consent is required from the employees, but the Nokes principle as above is honored by virtue of the fact that the employee may exercise their right to opt-out of the transfer. TUPE, also explained above, offers protection where a change of control occurs. |
In what circumstances can employers unilaterally change the terms of employment, and what remedies (if any) are afforded to an employee? | An employer who imposes a contractual change without the employee’s express or implied agreement will be in breach of contract. The employee can respond to the breach in the following ways:
As a note, the employee may have claims for both constructive wrongful and constructive unfair dismissal. A constructive wrongful dismissal claim will arise where the employee has resigned without notice and comprises a claim for damages for the notice period. The normal unfair dismissal principles apply in relation to constructive unfair dismissal claims (see below). |
Is your jurisdiction an employment-at-will jurisdiction? What are the employer’s termination rights? | The UK is not an employment-at-will jurisdiction. The employer's termination rights are:
In order to avoid successful claims by the employee, the employer will have to ensure that the correct procedure is followed. |
Are there remedies for dismissal without cause or wrongful termination? | In the UK wrongful dismissal is a dismissal in breach of contract. Fairness is not an issue: the sole question is whether the terms of the contract, which can be express or implied, have been breached. The employee will have a claim in damages if the employer, in dismissing them, breached the contract, thereby causing them loss. This will usually apply if the employee has not been given the notice period to which they are entitled. A wrongful dismissal claim may arise out of actual or constructive dismissal. It is important to note the distinction between wrongful and unfair dismissal before moving on to consider the remedies for wrongful dismissal:
Remedies for wrongful dismissal:
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Are there protections for whistleblowers? | Yes, the Public Interest Disclosure Act 1998 (PIDA) provides protection for workers reporting malpractice by their employers or third parties against victimization or dismissal. Case law has also developed this concept to acknowledge that there are circumstances in which public policy (or interest) overrides an implied or express duty of confidentiality including those owed by employees to their employer (Initial Services v Putteril [1968] 1 QB 396). Though it is important to note that there is no general legal duty on employees to disclose wrongdoing, the courts have in a number of cases developed the implied term of fidelity so as to impose a duty on employees with a managerial or supervisory status to report the wrongdoing of others (Swain v West (Butchers) Ltd [1936] 3 All ER 261). PIDA creates two levels of protection for whistleblowers. The dismissal of an employee or employee shareholder will be automatically unfair if the reason or principal reason, for their dismissal is that they have made a "protected disclosure". PIDA also protects workers from being subjected to any detriment on the grounds that they have made a protected disclosure. Finally, there is no financial cap on compensation in whistleblowing claims and no requirement for a minimum period of service. |
Do employees have a right to privacy? If so, what are the remedies for a breach? | Many principles of human rights in the UK are designed to protect individuals at home and at work. Article 8 of the European Convention on Human Rights, the right to privacy, applies to both of these environments. |
Are employees afforded any anti-discrimination protection? | Yes, protection is afforded to employees against discrimination by the Equality Act 2010. Its key provisions provide protection against:
The Act is concerned with discrimination and harassment in respect of the following protected characteristics:
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Are there statutory rights to vacation, medical leave and parental leave? Have there been any changes to leave benefits in the past 12 months? Is there any proposed legislation that employers should be aware of that will impact leave benefits? | Holidays: There are statutory rights to vacation in the UK as set out by the Working Time Regulations 1998. Under the Regulations, workers are entitled to take 5.6 weeks' paid holiday in each leave year. This is made up of four weeks' leave required by a 2003 EU directive, alongside the UK domestic right to an additional 1.6 weeks' leave. Medical leave: There is no specific statutory right to take time off work in cases of sickness or injury. However, employees may have this right written into their contracts. If not, it is arguable that in most cases there ought to be an implied term, either through custom and practice or the "officious bystander test", that an employee is not required to work if unfit to do so. More importantly, unfair dismissal law recognizes that in most cases an employer cannot simply dismiss an employee for taking sick leave; it must act fairly and reasonably and follow a fair procedure. However, employees must have a least two years' service to benefit from unfair dismissal rights. Furthermore, where the employee is absent due to a disability, the employer must avoid discrimination and may need to make reasonable adjustments for their disability, which may include keeping their job open and helping to rehabilitate them. Dismissing such an employee, because of their disability-related absence, would be unlawful discrimination unless justified. There is no qualifying period to bring a disability discrimination claim. Section 1 of ERA 1996 requires employers to provide employees and workers with a written statement of certain particulars (a section 1 statement). An employer can choose to include "any terms and conditions relating to incapacity for work due to sickness or injury, including any provision for sick pay" in a section 1 statement. This is the recommended approach though note that in the absence of express contractual provision, the courts will only imply a right to sick pay if the circumstances justify it. There is also a statutory provision entitling workers to 'statutory sick pay' set out in the Social Security Contributions and Benefits Act 1982. The scheme entitles qualifying employees who are absent from work due to incapacity to receive a minimum weekly SSP payment for up to 28 weeks in any period of incapacity for work (or series of linked periods of incapacity). The current rate of pay is £96.35. The worker is usually not entitled to this pay until they have been off sick for three days unless they have been off sick and getting statutory pay previously in the last eight weeks. Parental leave - adoption: The Employment Rights Act 1996 and the Paternity and Adoption Leave Regulations 2002 set out the statutory rights for leave where adoption is concerned. The adoption leave and pay scheme are available to:
Statutory leave and pay are not available for:
Parental leave – maternity: The key legislation that governs maternity leave is the Maternity and Parental Leave Regulations 1999. The key rights are:
Employers should be aware that: On 1 May 2019, the Women and Equalities Select Committee published its response supporting a proposed extension to maternity protection and calling on the government to implement the reform as soon as possible. The Pregnancy and Maternity (Redundancy Protection) Bill was introduced to Parliament on 21 May 2019. The private member's bill seeks to prohibit making employees redundant during pregnancy, maternity leave and for six months after the end of maternity leave, except where the employer ceases to carry on a business where the pregnant woman or new mother is employed. On 22 July 2019, the government published its response to the consultation. It has committed to bringing forward legislation "when Parliamentary time allows" to extend the redundancy protection period from the time the employee notifies her employer that she is pregnant, whether orally or in writing, until six months after the end of maternity leave. This is notwithstanding whether the woman takes any other periods of leave immediately after maternity leave. Parental leave – paternity: The Paternity and Adoption Leave Regulations 2002 set out that eligible employees are entitled to take either one whole week or two consecutive weeks' ordinary paternity leave within 56 days of a child's birth or placement for adoption. Parental leave – shared: The Children and Families Act 2014 is responsible for developing parents' shared parental leave rights. It introduced an entitlement for employees who are parents (whether by birth or adoption), to take shared parental leave (SPL) in the first year of their child's life or in the first year after their child's placement for adoption. The scheme makes up to 50 weeks of SPL available for eligible parents to take or share (that is, everything other than the compulsory maternity leave period or an equivalent two-week period in adoption cases). A mother or primary adopter is able to end their maternity or adoption leave, or commit to ending it at a future date, and share the untaken leave with the other parent as SPL. This enables mothers and primary adopters to return to work before the end of their leave without sacrificing the rest of the leave that would otherwise be available to them. SPL can either be taken consecutively or concurrently, as long as the total time taken does not exceed what is jointly available to the couple. Parental leave: Parental leave is a form of statutory unpaid leave available to some working parents in addition to statutory maternity, paternity and adoption leave. It can last up to 18 weeks, and be flexible in terms of the time at which it is taken and the way in which the total leave entitlement may be split up into a number of shorter periods. It must be taken before the child is 18. Parental leave – bereavement: From 6 April 2020, an employed parent has the right to take one or two weeks off work following the death of a child under 18 or a stillbirth after 24 weeks of pregnancy. There is no minimum length of service requirement and the leave must be taken within 56 weeks of the death or stillbirth. Time off for dependants: Employees have a right to reasonable unpaid time off work to deal with unexpected situations affecting their dependants, such as a child falling ill or a parent being taken into hospital. Changes to leave benefits in the last 12 months: The rates of statutory maternity, paternity, adoption, shared parental and parental bereavement pay increase in line with inflation at the beginning of April every year. The rates of pay last went up on 4 April 2021. Proposed legislation that will impact leave benefits: A new right to neonatal leave and pay for up to 12 weeks is expected to be introduced in 2023. |
Are restrictive covenants recognized and, if so, what are reasonable restrictions as to geography, duration and scope of activity? | Restrictive covenants are recognized in the UK both in commercial and employment contracts, although restrictive covenants in the latter are typically scrutinized more stringently by the courts due to the inequality of bargaining power between employer and employee. The court applies the following key principles in assessing and enforcing restrictive covenants:
Each of the above factors must be considered and satisfy a reasonableness test. If any of the factors do not satisfy this reasonableness test, the covenant as a whole could be unenforceable. However, when determining the reasonableness of a covenant, the time, geographical area and scope of business covered are interrelated factors. For example, restrictions covering a large geographical area or scope of business may be reasonable if they only apply for a short time. Similarly, restrictions covering a narrower geographical area or scope of business may be considered reasonable for a longer period of time.
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Can employees be terminated for refusing to sign a restrictive covenant? What serves as consideration for a restrictive covenant? | Employees can have their offer of employment withdrawn if they do not agree to sign a restrictive covenant. In the case of a senior employee, it would be more usual to negotiate the terms of the contract rather than withdraw the offer. |
Does your jurisdiction require contributions to a pension or retirement scheme? | Yes. Under the UK's auto-enrolment legislation contained in the Pensions Act 2008, any entity employing one or more workers in the UK is required to provide access to a qualifying workplace pension scheme. The contribution and enrolment obligations of the employer will vary depending on the type of worker. Where a worker:
The employer will need to auto-enroll them into an auto-enrolment compliant pension plan and ensure that contributions made to the pension plan are at least equal to:
As of the UK tax year, 2021/22 the qualifying earnings band runs from £6,240 per annum to £50,270 per annum. Qualifying earnings include salary, wages, commission, bonuses, overtime, and various statutory pay (on sickness, maternity, paternity, and adoption leave, etc). The minimum percentages can be higher or lower depending on the elements of remuneration which are pensioned under the plan – for example, if contributions are based on gross earnings from £1 onwards (without taking into account bonus, overtime, commission, etc) then the minimum employer contribution is adjusted to 4% with the minimum employee contribution remaining at 5%. Where a worker is:
For a worker who is not an Eligible Jobholder or a Non-eligible Jobholder (broadly those working or ordinarily working in the UK, who are earning the equivalent of less than £6,240 per annum in a payroll period and who are between ages 16 and 74) there is technically no obligation to make any contributions to a pension plan (although in practice employers often treat such workers in the same way as Non-eligible Jobholders). At a minimum, such workers must have the option to join a workplace pension plan to which they can choose to contribute. The UK Pensions Regulator has guidance available to those who are likely to employ UK workers on their obligations in respect of auto-enrollment and workplace pension plans which also includes a number of template communications (for adoption and use with staff) and details of hiring restrictions which the employer will need to observe to avoid breaching the legislative requirements. (The State Pension Age is the age at which a qualifying person can claim their state pension. It is currently in the process of increasing to 67 by 2028, and then 68 sometime between 2037 and 2039. As of the date of writing a qualifying person will need to be over 66 to claim but worker state pension ages can only be confirmed based on their date of birth.) |
Are certain benefits mandated by your jurisdiction? | In addition to the pensions requirements contained in the auto-enrolment legislation, employees and most workers are entitled to a minimum of 5.6 weeks of paid holiday per year (which may include public holidays). An employer may pro-rate this holiday entitlement for part-time workers.
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Is it permitted to have a mandatory retirement age in your jurisdiction? | The default retirement age in the UK was abolished on 6 April 2011. Therefore unless the mandatory retirement age (MRA) is objectively justified this will generally be unlawful direct age discrimination under the Equality Act 2010. In order to show objective justification, an employer would need to demonstrate that the MRA:
The legitimate aim has been interpreted by the UK and EU Courts to require social or public policy aims rather than the private commercial interests of the employer. Case law suggests that an MRA may be justified on the grounds of "inter-generational fairness" (in that it allows younger employees to be promoted as their careers progress) coupled with the social policy aim of maintaining the "dignity" of older workers by reducing the risk of having to use performance management to remove them. Again however it would be necessary for an employer to show that these were evidence-based business concerns based on the employer's circumstances. |
Is it possible to cease pension or insured benefits (income continuance/disability insurance, healthcare, life assurance, etc.) when work continues beyond retirement age? | There is an exception from the age discrimination provisions contained in the Equality Act 2010 where a benefit is provided under a group risk insured policy. The benefits usually provided in the UK under such a policy include private healthcare benefits, life assurance and income protection. Where healthcare benefits are provided through a healthcare trust rather than an insured product, expert advice should be taken. |
Can an employer make the COVID-19 vaccine mandatory for its employees? Are there exceptions that an employer must make? If an employee simply does not want to get the vaccine (without another reason like disability or religious reason), can an emp... | The current position is that there is no legal requirement for employees to have the COVID-19 vaccine. It would be difficult for an employer to make it mandatory because the vaccine is being offered to people in order of who is most at risk, therefore low-risk groups (such as younger workers) are not being offered it yet. In addition, there are some people who are advised not to have the vaccine for health reasons. Lastly, it is possible that a person who has been vaccinated can still get COVID-19 or pass it to someone else. There are risks involved (such as claims for age, disability, religious and/or pregnancy discrimination) if an employer were to make the COVID-19 vaccine compulsory for all employees. A better approach would be to speak to staff about the vaccine and share the benefits of being vaccinated. If someone does not want to be vaccinated, the employer should listen to their concerns. Employers can encourage staff to get the vaccine by paying them for time off to get the vaccine, paying the full rate of pay if they are off sick with side effects afterward, and not counting vaccine-related absence in any absence record or towards any trigger system they may have for disciplinary action. If it is important for staff to be vaccinated (for example, if they work in a care home), the employer should discuss this with employees or the recognized trade union if there is one and agree to a vaccine policy. If an employee then refuses to get a vaccine without good reason, disciplinary action could potentially be taken. If the employer dismissed an employee for refusing, they could face a claim for unfair dismissal as well as a potential discrimination claim. In order to defend an unfair dismissal claim, the employer would have to have a good reason for dismissal (such as refusal to follow a reasonable management instruction) and would need to follow a fair procedure. An employer would have to show that the decision to dismiss was reasonable and this could be problematic as the employee could argue that a number of other measures could have been taken instead of dismissal, such as requiring them to work from home, redeployment to a different role, testing them regularly for COVID-19, and ensuring that the workplace was COVID-secure. |
Can an employer require that employees return to work in the office (absent government order to shut down)? If an employee refuses to return to the office, can the employer terminate the employee’s employment? | An employer can require employees to return to the office (when employees are no longer advised by the Government to work from home if possible) but if someone does not want to return it would be best to talk to them about their concerns and see if they can be resolved, rather than taking disciplinary action and ultimately terminating their employment. If the employee can work from home, this may resolve the issue. If not and the employee is concerned about using public transport, it may be possible for them to be provided with a parking space so that they can drive to work or their hours could be varied on a temporary basis so that they can avoid traveling during peak times. Other options could include taking holiday or unpaid leave or using the Coronavirus Job Retention Scheme. If this is not possible, the employer should consider the current public health advice, the reason why the employee is concerned about going to work and whether it could be discriminatory to refuse home working or take disciplinary action. If there is no discrimination angle and it is reasonable to require the employee to attend work, the employer could potentially take disciplinary action for failure to follow a reasonable management instruction and for unauthorized absence. However, it is important to find out why the employee is refusing to attend work and to investigate this thoroughly before taking any action. Dismissals relating to raising health and safety concerns amount to automatically unfair dismissals, which do not require a qualifying period of service, and the compensation is unlimited. Action short of dismissal (such as taking disciplinary action) on these grounds could amount to a detriment, which is unlawful. |
Global Employment Law Guide
Under the current law, there are three categories of individuals providing their services in the job market:
- Employee.
- Worker.
- Self-employed independent contractor.
An employee is defined by statute as an individual who has entered into or works under a contract of employment.
A worker is defined as an individual who has entered into or works under (a) a contract of employment, or (b) any other contract, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not that of a client or customer of any profession or business undertaking carried on by the individual. It is clear from the first part of the test ("limb (a)") that all employees are workers. However, it is the second part ("limb (b)") that has been subject to extensive scrutiny by the tribunals and courts to determine what types of working arrangements fall within its scope. Individuals who are not employees but who satisfy the worker test are sometimes referred to as "limb (b) workers".
Anyone who is neither an employee nor a worker will be self-employed for employment law purposes.
There has been discussion globally on whether workers in the 'gig economy' e.g. Uber drivers are considered workers, employees, self-employed or an entirely new status. Presently in the UK, they are considered to be workers but each case turns on its facts so it is hard to generalize in relation to employment status.
To complicate matters, only two categories of individuals are recognized for tax purposes: employed and self-employed. The tests for determining status are different in tax and employment law but workers are currently treated as self-employed so far as tax is concerned.
Under the Government's Good Work Plan (published in December 2018), there are proposals to legislate to improve the clarity of the employment status tests, reflecting the reality of modern working relationships. The Government plans to develop an online tool for people to determine their employment status and to reduce the differences in the tests for employment status in tax and employment law. These proposals have not been actioned yet.
There are many different types of employment contracts:
- Permanent contracts
- Temporary contracts
- Directors' service agreements
- Zero-hours contracts
- Normal contracts create a mutual obligation for the employer to provide work and for the employee to do it, zero-hour contracts weaken that obligation by removing the guarantee of the employer providing work – allowing the employer to call on their employees as and when they need them as opposed to having them available (and getting paid) for a specific number of hours per week.
- Casual work contracts
- This is the typical style of contract used for workers, and its main difference against an employment contract is that the individual is not normally obliged to accept the work given to them by the employer.
- Consultancy agreements
- Typically used where the individual is self-employed and working on behalf of/ for another company.
The terms of a contract are the rights and obligations that bind the parties to the contract. They can be express, implied or incorporated from other sources. The basic principles of contract law are that there must be:
- An intention to create legal relations
- Offer and acceptance
- Consideration between the parties
- Certainty
These general principles apply to an employment contract in the same way that they apply to any other type of contract.
Employees and workers have the right to be provided with a written statement of their terms and conditions on or before the first day of work. The Employment Rights Act 1996 sets out various information that must be included.
Discrimination against part-time workers Is prohibited. Under the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000, a part-time worker has the right not to be treated less favorably than a full-time worker doing the same or a similar job for the same employer. It should be noted that the full-time individual used for comparison must be real and not hypothetical.
A contract for personal service cannot be assigned from one employer to another without the employee's consent, because of its personal nature. This is known as the Nokes principle (Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014).
It is possible that an employment contract could be assigned or novated if all parties consent. However, as a general contractual matter, novation will extinguish the original contract and replace it with a fresh contract. Therefore, novation of an employment contract is likely to result in the dismissal of the employee. Consideration for the new contract will also be required.
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE) is a statutory exception to this rule. TUPE provides for an automatic, statutory novation of the contract of employment of a transferring employee (that is, the automatic transfer by the law of their employment contract from one employer to another). This usually applies in the case of the transfer of a business as a going concern but can also apply in the case of service provision changes, such as contracting out.
When a business is transferred as a going concern the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) will usually apply. TUPE introduced several forms of protection for employees employed by an organization being transferred in this way.
Primarily they are:
- The automatic transfer principle: employees transfer to the transferee who inherits all rights, liabilities and obligations in relation to them.
- Protection against dismissal in connection with a TUPE transfer.
- The obligation to inform and consult with representatives of the affected employees.
With regard to an employee's ability to influence a transfer as a going concern, they can object to their employment being transferred to a new employer under TUPE but they cannot stop the transfer. Instead, if they object then the starting point is that their employment is simply treated as coming to an end on the date of the transfer without there being a dismissal.
No consent is required from the employees, but the Nokes principle as above is honored by virtue of the fact that the employee may exercise their right to opt-out of the transfer. TUPE, also explained above, offers protection where a change of control occurs.
An employer who imposes a contractual change without the employee’s express or implied agreement will be in breach of contract. The employee can respond to the breach in the following ways:
- Work under the new terms under protest and bring a claim for breach of contract or unlawful deductions from wages (if the breach of contract involves a shortfall in wages). This is sometimes known as "standing and suing". It should be noted that in cases where the change imposed is substantial, the employer may be deemed to have dismissed the employee, so it is possible that an employee may also bring a claim for unfair dismissal.
- If the breach of contract is a fundamental breach going to the root of the contract, resign and bring a claim for constructive and wrongful dismissal.
- If possible (for example, in relation to a change to job duties or hours of work), refuse to work under the new terms.
As a note, the employee may have claims for both constructive wrongful and constructive unfair dismissal. A constructive wrongful dismissal claim will arise where the employee has resigned without notice and comprises a claim for damages for the notice period. The normal unfair dismissal principles apply in relation to constructive unfair dismissal claims (see below).
The UK is not an employment-at-will jurisdiction. The employer's termination rights are:
- Termination for lack of competence, but the employer must ensure that proper termination procedures are followed i.e. giving a warning and offering a chance to improve via training
- Termination because of long-term/ persistent illness that prevents the employee from carrying out their responsibilities. But before any action, the employer must look for ways to support the employee i.e. reasonable adjustments or considering whether the job itself is making the individual sick, and give the individual reasonable time to recover from their illness
- An employer can make an individual redundant provided the reasons are not discriminatory
- Summary dismissal is available where an employee displays 'gross misconduct'. This might be used in extreme cases where the individual is violent toward colleagues etc.
- Employment can also be terminated for conduct that does not amount to gross misconduct provided that previous warnings have been given.
- Termination can be carried out for a 'statutory reason' i.e. it would be illegal to continue employing the individual. For example, a logistics firm could terminate a driver who has had their driving license revoked
- Termination can occur for any other substantial reason, for example, the employee unreasonably refuses to accept a company reorganization, or is sent to prison, etc.
In order to avoid successful claims by the employee, the employer will have to ensure that the correct procedure is followed.
In the UK wrongful dismissal is a dismissal in breach of contract. Fairness is not an issue: the sole question is whether the terms of the contract, which can be express or implied, have been breached. The employee will have a claim in damages if the employer, in dismissing them, breached the contract, thereby causing them loss. This will usually apply if the employee has not been given the notice period to which they are entitled.
A wrongful dismissal claim may arise out of actual or constructive dismissal.
It is important to note the distinction between wrongful and unfair dismissal before moving on to consider the remedies for wrongful dismissal:
- Wrongful dismissal gives rise to a common-law action for breach of contract. By contrast, unfair dismissal is solely the creature of statute.
- In a wrongful dismissal claim, the tribunal or court is concerned with whether a breach of contract occurred. In an unfair dismissal claim, the function of the tribunal is to consider the fairness of the dismissal.
- There are certain pre-conditions for bringing an unfair dismissal claim, in particular, a qualifying period, and the statutory scheme excludes certain categories of employment. These do not apply in relation to a wrongful dismissal claim.
- Another key difference between the two types of claims is that when defending a wrongful dismissal claim, an employer may rely on facts that they found out after the dismissal. However, in an unfair dismissal claim, the only question is whether the dismissal was fair on the basis of what the employer knew at the time.
Remedies for wrongful dismissal:
- In the tribunal, the only remedy available for wrongful dismissal is damages
- Unless the claim is one of debt, the employee is under a duty to mitigate their losses.
- This is a general duty to reduce their losses by taking reasonable steps to find another job.
- In civil courts, damages, an injunction and/or a declaration can be obtained.
- In limited circumstances, public law remedies may be used, but this is rare.
Yes, the Public Interest Disclosure Act 1998 (PIDA) provides protection for workers reporting malpractice by their employers or third parties against victimization or dismissal.
Case law has also developed this concept to acknowledge that there are circumstances in which public policy (or interest) overrides an implied or express duty of confidentiality including those owed by employees to their employer (Initial Services v Putteril [1968] 1 QB 396).
Though it is important to note that there is no general legal duty on employees to disclose wrongdoing, the courts have in a number of cases developed the implied term of fidelity so as to impose a duty on employees with a managerial or supervisory status to report the wrongdoing of others (Swain v West (Butchers) Ltd [1936] 3 All ER 261).
PIDA creates two levels of protection for whistleblowers. The dismissal of an employee or employee shareholder will be automatically unfair if the reason or principal reason, for their dismissal is that they have made a "protected disclosure". PIDA also protects workers from being subjected to any detriment on the grounds that they have made a protected disclosure. Finally, there is no financial cap on compensation in whistleblowing claims and no requirement for a minimum period of service.
Many principles of human rights in the UK are designed to protect individuals at home and at work. Article 8 of the European Convention on Human Rights, the right to privacy, applies to both of these environments.
However, employers can still introduce privacy policies and take action, such as monitoring, that conflict with employees’ rights under Article 8, as long as those policies and actions do not disproportionately interfere with the employees’ Article 8 rights. More invasive monitoring will require more cogent justification and, in most cases, a greater degree of warning (Barbulescu v Romania 61496/08 [2017] ECHR 742).
Remedies for a breach of privacy will typically be damages through additional options that may be available depending on the type of action brought by an employee e.g. discrimination, harassment, breach of contract (the implied term of mutual trust and confidence), constructive dismissal (where the employer's breach is so serious that it justifies an employee resigning).
Yes, protection is afforded to employees against discrimination by the Equality Act 2010. Its key provisions provide protection against:
- Direct discrimination
- Direct discrimination occurs where "because of a protected characteristic, A treats B less favourably than A treats or would treat others". An employee claiming direct discrimination should show that they have been treated less favourably than a real or hypothetical comparator whose circumstances are not materially different to their own. The exception to this is pregnancy or maternity discrimination where, because of European case law, formal comparators are not required.
- Indirect discrimination
- Indirect discrimination is concerned with acts, decisions or policies (broadly speaking) which are not intended to treat anyone less favourably, but which, in practice, have the effect of disadvantaging a group of people with a particular protected characteristic.
- Harassment; there are three definitions imposed by the Act
- A harasses B if A engages in unwanted conduct related to a relevant protected characteristic which has the purpose or effect of either:
- Violating B's dignity, or
- Creating an intimidating, hostile, degrading, humiliating or offensive environment for B.
- Conduct of a sexual nature
- Less favourable treatment because of an employee's rejection of or submission to harassment of a sexual nature or harassment related to sex or gender reassignment
- A harasses B if A engages in unwanted conduct related to a relevant protected characteristic which has the purpose or effect of either:
- Victimisation
- Victimisation occurs where A subjects B to a detriment because either:
- B has done a protected act (i.e. bringing a discrimination claim).
- A believes that B has done, or may do, a protected act.
The Act is concerned with discrimination and harassment in respect of the following protected characteristics:
- Age
- Disability
- Gender reassignment
- Marriage and civil partnership
- Pregnancy and maternity
- Race
- Religion or belief
- Sex
- Sexual orientation
Holidays:
There are statutory rights to vacation in the UK as set out by the Working Time Regulations 1998. Under the Regulations, workers are entitled to take 5.6 weeks' paid holiday in each leave year. This is made up of four weeks' leave required by a 2003 EU directive, alongside the UK domestic right to an additional 1.6 weeks' leave.
Medical leave:
There is no specific statutory right to take time off work in cases of sickness or injury. However, employees may have this right written into their contracts. If not, it is arguable that in most cases there ought to be an implied term, either through custom and practice or the "officious bystander test", that an employee is not required to work if unfit to do so.
More importantly, unfair dismissal law recognizes that in most cases an employer cannot simply dismiss an employee for taking sick leave; it must act fairly and reasonably and follow a fair procedure. However, employees must have a least two years' service to benefit from unfair dismissal rights.
Furthermore, where the employee is absent due to a disability, the employer must avoid discrimination and may need to make reasonable adjustments for their disability, which may include keeping their job open and helping to rehabilitate them. Dismissing such an employee, because of their disability-related absence, would be unlawful discrimination unless justified. There is no qualifying period to bring a disability discrimination claim.
Section 1 of ERA 1996 requires employers to provide employees and workers with a written statement of certain particulars (a section 1 statement). An employer can choose to include "any terms and conditions relating to incapacity for work due to sickness or injury, including any provision for sick pay" in a section 1 statement. This is the recommended approach though note that in the absence of express contractual provision, the courts will only imply a right to sick pay if the circumstances justify it.
There is also a statutory provision entitling workers to 'statutory sick pay' set out in the Social Security Contributions and Benefits Act 1982. The scheme entitles qualifying employees who are absent from work due to incapacity to receive a minimum weekly SSP payment for up to 28 weeks in any period of incapacity for work (or series of linked periods of incapacity). The current rate of pay is £96.35. The worker is usually not entitled to this pay until they have been off sick for three days unless they have been off sick and getting statutory pay previously in the last eight weeks.
Parental leave - adoption:
The Employment Rights Act 1996 and the Paternity and Adoption Leave Regulations 2002 set out the statutory rights for leave where adoption is concerned. The adoption leave and pay scheme are available to:
- Those who were "matched for adoption" with a child by an "adoption agency;"
- Those who adopted children from overseas under the law of that jurisdiction;
- Foster parents who are approved for adoption under a "fostering for adoption" scheme;
- Parents of a child born to a surrogate mother ("parental order" parents).
Statutory leave and pay are not available for:
- Private adoption;
- Step-parents who adopt their step-children;
- Parents who have a child with the help of a surrogate but who are not eligible for a parental order (for example where neither of them has supplied the genetic material for the child);
- Special guardians or kinship carers. Special guardianship orders are intended to provide legally secure placements for children who cannot live with their birth parents. Kinship carers are relatives or family friends who provide a home for children who cannot be looked after by their parents.
Parental leave – maternity:
The key legislation that governs maternity leave is the Maternity and Parental Leave Regulations 1999. The key rights are:
- Time off for antenatal appointments
- Up to 52 weeks' maternity leave. Employees are entitled to one year's statutory maternity leave (made up of ordinary maternity leave (OML) and additional maternity leave (AML)), regardless of the length of service.
- Statutory maternity pay (SMP) for 39 weeks
- The right to return to the same job
- Priority for alternative employment in redundancy cases
- The right to request flexible working conditions on return to work
- Protection from dismissal, detriment or discrimination by reason of pregnancy or maternity
- Agency workers will qualify for time off for antenatal appointments (after 12 weeks), and from discrimination, and SMP. Other non-employees will also qualify for protection from discrimination provided they fall within the wider definition of employment in the Equality Act 2010.
Employers should be aware that:
On 1 May 2019, the Women and Equalities Select Committee published its response supporting a proposed extension to maternity protection and calling on the government to implement the reform as soon as possible.
The Pregnancy and Maternity (Redundancy Protection) Bill was introduced to Parliament on 21 May 2019. The private member's bill seeks to prohibit making employees redundant during pregnancy, maternity leave and for six months after the end of maternity leave, except where the employer ceases to carry on a business where the pregnant woman or new mother is employed.
On 22 July 2019, the government published its response to the consultation. It has committed to bringing forward legislation "when Parliamentary time allows" to extend the redundancy protection period from the time the employee notifies her employer that she is pregnant, whether orally or in writing, until six months after the end of maternity leave. This is notwithstanding whether the woman takes any other periods of leave immediately after maternity leave.
Parental leave – paternity:
The Paternity and Adoption Leave Regulations 2002 set out that eligible employees are entitled to take either one whole week or two consecutive weeks' ordinary paternity leave within 56 days of a child's birth or placement for adoption.
Parental leave – shared:
The Children and Families Act 2014 is responsible for developing parents' shared parental leave rights. It introduced an entitlement for employees who are parents (whether by birth or adoption), to take shared parental leave (SPL) in the first year of their child's life or in the first year after their child's placement for adoption. The scheme makes up to 50 weeks of SPL available for eligible parents to take or share (that is, everything other than the compulsory maternity leave period or an equivalent two-week period in adoption cases). A mother or primary adopter is able to end their maternity or adoption leave, or commit to ending it at a future date, and share the untaken leave with the other parent as SPL. This enables mothers and primary adopters to return to work before the end of their leave without sacrificing the rest of the leave that would otherwise be available to them. SPL can either be taken consecutively or concurrently, as long as the total time taken does not exceed what is jointly available to the couple.
Parental leave:
Parental leave is a form of statutory unpaid leave available to some working parents in addition to statutory maternity, paternity and adoption leave. It can last up to 18 weeks, and be flexible in terms of the time at which it is taken and the way in which the total leave entitlement may be split up into a number of shorter periods. It must be taken before the child is 18.
Parental leave – bereavement:
From 6 April 2020, an employed parent has the right to take one or two weeks off work following the death of a child under 18 or a stillbirth after 24 weeks of pregnancy. There is no minimum length of service requirement and the leave must be taken within 56 weeks of the death or stillbirth.
Time off for dependants:
Employees have a right to reasonable unpaid time off work to deal with unexpected situations affecting their dependants, such as a child falling ill or a parent being taken into hospital.
Changes to leave benefits in the last 12 months:
The rates of statutory maternity, paternity, adoption, shared parental and parental bereavement pay increase in line with inflation at the beginning of April every year. The rates of pay last went up on 4 April 2021.
Proposed legislation that will impact leave benefits:
A new right to neonatal leave and pay for up to 12 weeks is expected to be introduced in 2023.
Restrictive covenants are recognized in the UK both in commercial and employment contracts, although restrictive covenants in the latter are typically scrutinized more stringently by the courts due to the inequality of bargaining power between employer and employee. The court applies the following key principles in assessing and enforcing restrictive covenants:
- Reasonableness. Post-termination restraints are enforceable if they are reasonable, having regard to the interests of the parties and the public interest. The question of reasonableness has to be considered at the point when the covenant was entered into, not in the light of subsequent events.
- Legitimate interest. To be enforceable, a restrictive covenant must be designed to protect a legitimate proprietary interest of the employer for which the restraint is reasonably necessary. Legitimate interests include an employer's trade connections with customers or suppliers, confidential information and maintaining the stability of the workforce.
- Preventing competition must not be an end in itself. Restrictive covenants having the sole aim of preventing competition are never upheld by the court. A non-competition restriction must be designed to protect the employer's confidential information, trade secrets or customer connections, and prevent the employee from obtaining an unfair advantage by exploiting these for their own, or another employer's, benefit. Non-solicitation clauses are therefore looked on more favorably than pure non-competition clauses.
- Restrictions must be no wider than necessary. For any covenant in restraint of trade to be treated as reasonable in the interests of the parties, it must afford no more than adequate protection to the benefit of the party in whose favor it is imposed (Herbert Morris Ltd v Saxelby [1916] 1 AC 688).
Each of the above factors must be considered and satisfy a reasonableness test. If any of the factors do not satisfy this reasonableness test, the covenant as a whole could be unenforceable. However, when determining the reasonableness of a covenant, the time, geographical area and scope of business covered are interrelated factors. For example, restrictions covering a large geographical area or scope of business may be reasonable if they only apply for a short time. Similarly, restrictions covering a narrower geographical area or scope of business may be considered reasonable for a longer period of time.
In the UK, the courts will remove particular words from a restrictive covenant if these words are capable of being severed without affecting the remaining part of the agreement. It is not, however, advisable for an employer to draft a non-compete clause too widely in the hope that the courts will sever the provisions so that the clause becomes enforceable. The courts may refuse to do this and rule that the entire clause is unenforceable.
The types of restrictive covenants that tend to be seen in UK contracts of employment include:
- Non-competition
- Non-solicitation of customers
- Non-solicitation of potential customers
- Non-dealing with customers
- Non-interference with suppliers
- Non-poaching of other employees
Employees can have their offer of employment withdrawn if they do not agree to sign a restrictive covenant. In the case of a senior employee, it would be more usual to negotiate the terms of the contract rather than withdraw the offer.
Restrictive covenants must be supported by adequate consideration. Examples include a promotion, pay rise or another contractual term that is beneficial to the employee (such as an additional paid holiday). Problems tend to arise when new covenants are introduced for existing employees: it is not enough to consult with employees and obtain the employee's signature in these circumstances. In the case of new hires, as long as contracts containing restrictions are signed prior to or at the commencement of employment, the remaining terms of the initial contract will be a valuable consideration. It remains important to ensure that, when implementing or amending existing employees' restrictions, good consideration is provided. The employer should set out, in writing, that the pay rise, bonus or other benefit is conditional upon, and provided as consideration for, the employee agreeing to the new restrictions.
Yes. Under the UK's auto-enrolment legislation contained in the Pensions Act 2008, any entity employing one or more workers in the UK is required to provide access to a qualifying workplace pension scheme.
The contribution and enrolment obligations of the employer will vary depending on the type of worker.
Where a worker:
- Works or ordinarily works in the UK; and
- Is between the ages of 22 and the state pension age (see below); and
- Is earning more than an annualized equivalent of £10,000 per annum in a pay reference period (figures in this note are accurate for the tax-year 2021/22, the thresholds are updated annually by the Department for Work and Pensions), then they will be an eligible jobholder.
The employer will need to auto-enroll them into an auto-enrolment compliant pension plan and ensure that contributions made to the pension plan are at least equal to:
- 3% of qualifying earnings as an employer contribution; and
- 5% of qualifying earnings as an employee contribution.
As of the UK tax year, 2021/22 the qualifying earnings band runs from £6,240 per annum to £50,270 per annum. Qualifying earnings include salary, wages, commission, bonuses, overtime, and various statutory pay (on sickness, maternity, paternity, and adoption leave, etc).
The minimum percentages can be higher or lower depending on the elements of remuneration which are pensioned under the plan – for example, if contributions are based on gross earnings from £1 onwards (without taking into account bonus, overtime, commission, etc) then the minimum employer contribution is adjusted to 4% with the minimum employee contribution remaining at 5%.
Where a worker is:
- Working or ordinarily working in the UK, and either
- (a) Aged between 16 and 21; or
(b) Aged between state pension age and 74, and who in either case earns an annualized equivalent of £10,000 per annum; or - 3. Is aged between 16 and 74 but earns between £6,240 per annum and £10,000 per annum, then they will be a "Non-eligible Jobholder" and must have the option to join a qualifying workplace pension scheme and receive the relevant employer and employee contributions set out above.
For a worker who is not an Eligible Jobholder or a Non-eligible Jobholder (broadly those working or ordinarily working in the UK, who are earning the equivalent of less than £6,240 per annum in a payroll period and who are between ages 16 and 74) there is technically no obligation to make any contributions to a pension plan (although in practice employers often treat such workers in the same way as Non-eligible Jobholders). At a minimum, such workers must have the option to join a workplace pension plan to which they can choose to contribute.
The UK Pensions Regulator has guidance available to those who are likely to employ UK workers on their obligations in respect of auto-enrollment and workplace pension plans which also includes a number of template communications (for adoption and use with staff) and details of hiring restrictions which the employer will need to observe to avoid breaching the legislative requirements.
(The State Pension Age is the age at which a qualifying person can claim their state pension. It is currently in the process of increasing to 67 by 2028, and then 68 sometime between 2037 and 2039. As of the date of writing a qualifying person will need to be over 66 to claim but worker state pension ages can only be confirmed based on their date of birth.)
In addition to the pensions requirements contained in the auto-enrolment legislation, employees and most workers are entitled to a minimum of 5.6 weeks of paid holiday per year (which may include public holidays). An employer may pro-rate this holiday entitlement for part-time workers.
Employees are also entitled to certain statutory benefits funded by the employer which are addressed above.
The default retirement age in the UK was abolished on 6 April 2011.
Therefore unless the mandatory retirement age (MRA) is objectively justified this will generally be unlawful direct age discrimination under the Equality Act 2010.
In order to show objective justification, an employer would need to demonstrate that the MRA:
- Is intended to meet a legitimate aim; and
- The MRA meets that legitimate aim; and
- Imposing an MRA is proportionate to meeting that aim.
The legitimate aim has been interpreted by the UK and EU Courts to require social or public policy aims rather than the private commercial interests of the employer.
Case law suggests that an MRA may be justified on the grounds of "inter-generational fairness" (in that it allows younger employees to be promoted as their careers progress) coupled with the social policy aim of maintaining the "dignity" of older workers by reducing the risk of having to use performance management to remove them.
Again however it would be necessary for an employer to show that these were evidence-based business concerns based on the employer's circumstances.
There is an exception from the age discrimination provisions contained in the Equality Act 2010 where a benefit is provided under a group risk insured policy. The benefits usually provided in the UK under such a policy include private healthcare benefits, life assurance and income protection.
Where healthcare benefits are provided through a healthcare trust rather than an insured product, expert advice should be taken.
For the avoidance of doubt, the exemption does not apply to pension benefits and these will need to be continued where the worker continues to work beyond retirement age. In fact, the auto-enrolment obligations may even allow an employee who is in this position and under the age of 74 to opt into pension saving with associated employer contributions.
The current position is that there is no legal requirement for employees to have the COVID-19 vaccine. It would be difficult for an employer to make it mandatory because the vaccine is being offered to people in order of who is most at risk, therefore low-risk groups (such as younger workers) are not being offered it yet. In addition, there are some people who are advised not to have the vaccine for health reasons. Lastly, it is possible that a person who has been vaccinated can still get COVID-19 or pass it to someone else. There are risks involved (such as claims for age, disability, religious and/or pregnancy discrimination) if an employer were to make the COVID-19 vaccine compulsory for all employees. A better approach would be to speak to staff about the vaccine and share the benefits of being vaccinated. If someone does not want to be vaccinated, the employer should listen to their concerns. Employers can encourage staff to get the vaccine by paying them for time off to get the vaccine, paying the full rate of pay if they are off sick with side effects afterward, and not counting vaccine-related absence in any absence record or towards any trigger system they may have for disciplinary action. If it is important for staff to be vaccinated (for example, if they work in a care home), the employer should discuss this with employees or the recognized trade union if there is one and agree to a vaccine policy. If an employee then refuses to get a vaccine without good reason, disciplinary action could potentially be taken. If the employer dismissed an employee for refusing, they could face a claim for unfair dismissal as well as a potential discrimination claim. In order to defend an unfair dismissal claim, the employer would have to have a good reason for dismissal (such as refusal to follow a reasonable management instruction) and would need to follow a fair procedure. An employer would have to show that the decision to dismiss was reasonable and this could be problematic as the employee could argue that a number of other measures could have been taken instead of dismissal, such as requiring them to work from home, redeployment to a different role, testing them regularly for COVID-19, and ensuring that the workplace was COVID-secure.
An employer can require employees to return to the office (when employees are no longer advised by the Government to work from home if possible) but if someone does not want to return it would be best to talk to them about their concerns and see if they can be resolved, rather than taking disciplinary action and ultimately terminating their employment. If the employee can work from home, this may resolve the issue. If not and the employee is concerned about using public transport, it may be possible for them to be provided with a parking space so that they can drive to work or their hours could be varied on a temporary basis so that they can avoid traveling during peak times. Other options could include taking holiday or unpaid leave or using the Coronavirus Job Retention Scheme. If this is not possible, the employer should consider the current public health advice, the reason why the employee is concerned about going to work and whether it could be discriminatory to refuse home working or take disciplinary action. If there is no discrimination angle and it is reasonable to require the employee to attend work, the employer could potentially take disciplinary action for failure to follow a reasonable management instruction and for unauthorized absence. However, it is important to find out why the employee is refusing to attend work and to investigate this thoroughly before taking any action. Dismissals relating to raising health and safety concerns amount to automatically unfair dismissals, which do not require a qualifying period of service, and the compensation is unlimited. Action short of dismissal (such as taking disciplinary action) on these grounds could amount to a detriment, which is unlawful.