Employment Law FAQS: Questions and Answers
On this page, we answer some common questions on employment law in alphabetical order. Can’t see the answer to your question? – Ask us today using our Contact Form.
ACAS: What is an ACAS COT3 settlement? ACAS is the government mediation service for employees and employers. The ACAS service is free of charge and helps parties reach agreement. An ACAS ‘COT3’ agreement formalizes settlements. There is no need to obtain independent legal advice (unlike a Settlement Agreement): Read more at the ACAS website.
Constructive Dismissal: What is Constructive Unfair Dismissal? Constructive Dismissal is when the employee resigns in response to a breach by the employer of an express or implied term of employment, often the implied term of ‘trust and confidence’. Read more at: What is Constructive Dismissal?
Contract Breach: What should I do if my employee or employer is in breach of contract? The employment contract may be set out in an offer letter, a formal contract or sometimes in policies and procedures.
Contract of Employment: Does my employer have to give me a contract of employment? Employers should provide employees with a statement of main terms and conditions of employment in writing under s1 Employment Rights Act 1996. See also Government Guidance on Employment Contracts. In practice, employers would be advised to provide this information either before employment commences or on the first date of employment. This does not however have to be done in formal contract, but could also be provided in the offer letter or even an email. If an employer fails to provide a statement of main terms, in certain circumstances the Employment Tribunal may make an award to the employee of between 2 and 4 week’s pay (subject to the statutory cap – currently £700 pw). There are however a number of additional clauses that an employer would be wise to have in an employment contract. Read more at employment contract.
Deductions from Pay: What deductions can my employer make from my pay? In addition to PAYE tax and National Insurance, employers can make deductions for things like student loans and court orders. Employers can deduct overpayments of salary or expenses. Other than that, they can only make deductions if the employee agrees. Read more at: Deductions from Pay.
Deductions from Pay: Can my employer recoup an overpayment of salary or holiday? Employers can normally recoup overpayments of salary or holiday from your wages, even if the overpayment was not your fault. In limited circumstances you may be able to argue that the employer is ‘estopped’ from recovering the overpayment. See: overpayment of wages and estoppel.
Discrimination (age): What is Age Discrimination? Employers must not discriminate against an employee because of age, unless the decision can be objectively justified as a proportionate means of achieving a legitimate aim. For the majority of roles, compulsory retirement is no longer lawful. For example, it is potentially unlawful to pass someone over for a promotion because they either appear too young, or are considered to be too old.
Discrimination (disability): What is a disability? Under the Equality Act 2010, a disability is a physical or mental impairment with a substantial effect on your ability to carry out day to day activities and which has or is likely to last for a year or more. Many conditions potentially qualify as a disability under the act, including cancer, back problems, depression, dyslexia, and many more.
Discrimination (disability): What is disability discrimination? Under s15 Discrimination arising from a disability will be when the employer treats the employee unfavourably because of something arising out of their disability. The employer can defend the claim if they can show that doing so was a proportionate means of achieving a legitimate aim. For example, it might be discriminatory to withhold a bonus from a disabled employee because of the time off the had to take for medical appointments
Discrimination (disability): What are ‘Reasonable Adjustments’: Under s20 Equality Act, the employer has a duty to make ‘reasonable adjustments’ to the system of working if it applies a ‘provision, criterion or practice’ that puts the disabled employee at a substantial disadvantage compared to colleagues. For example, a reasonable adjustment for someone with depression might be to allow them to work on flexi hours or provide them with additional line management support. What adjustments are reasonable will depend on the individual in question, the nature of the role and the resources of the employer.
Discrimination (sex): What is Sex Discrimination? Sex discrimination may be direct; namely when the employer treats a female employer less favourably than it treats a comparable man. An example of direct discrimination may be offering a man a job when he is less well qualified than a woman.
It may be indirect discrimination, which is when the employer applies a provision, criterion or practice which puts her at a disadvantage compared to male employees. An example may be requiring staff to work late, when women are more likely to need to leave on time for child-care duties.
Discrimination (race): What is race discrimination? Race discrimination is when the employer treats an employee less favourably because of their colour, nationality, or ethnic / national origins (see s9 Equality Act). The employee needs to say that they were treated less favourably than someone without their Protected Characteristic. For example, this may occur if a person of colour is scored more harshly at an interview than a white interview.
Discrimination (harassment): What is unlawful harassment under the Equality Act 2010? Unlawful harassment takes place when person A engages in unwanted conduct (relating to race, sex, religious belief, disability, sexual orientation age etc) that has the purpose or effect of violating person B’s dignity or )creating an intimidating, hostile, degrading, humiliating or offensive environment for person B.
This might include unwelcome ‘jokes’ of a sexual or a racial nature, or homophobic comments. The harassment can take place at work, or possibly at a social event such as after-work drinks or a Christmas party. It could include person A picking on person B because she rejected his sexual advances.
Discrimination (victimization): What is unlawful victimization under the s27 Equality Act 2010? It is unlawful to subject someone to a detriment doing a ‘Protected Act’.
A ‘Protected Act’ is when you bring proceedings, give evidence, or make an allegation of unlawful discrimination under the Equality Act 2010.
So for example if you make a complaint of unlawful discrimination and your employer denies you a promotion / denies you a bonus / gives you a warning / dismisses you as a result, you may have a claim of unlawful victimization. This applies even if your initial allegation turns out to be wrong; as long as it was not given in bad faith. Read more on our Unlawful Discrimination page.
Disciplinary: What is a fair disciplinary procedure? The essence of a fair disciplinary procedure is to carry out a reasonable investigation and to then to hear what the employee has to say before reaching any decision. If a formal sanction is imposed, the employee should be given the right to appeal. Read more at: What is a fair disciplinary procedure?
Employee status: What is an Employee? In the majority of instances, it will be obvious that someone is an ‘employee’ and working under a contract of service (written or implied) under s230 Employment Rights Act 1996. However it can be less clear if the worker is engaged as a freelancer or consultant or if the business is trying to avoid employment liabilities arising. The Employment Tribunal will always consider the reality of the working relationship, with particular reference to:
- Mutuality of obligation – (the employer is obliged to provide work, the employee is obliged to carry it out)
- Personal service – (ie only the employee can do the work; they cannot send a substitute)
Remember, even if someone is not an ‘employee’, they may be a ‘worker’ and entitled to paid holiday and the National Minimum Wage.
Employment Tribunal Time Limits: What is the deadline for submitting an Employment Tribunal claim? In the majority of cases, claims must be instigated within three months of the date of the act complained of. Read more at: Employment Tribunal time limits.
Employment Tribunal: What is a Case Management Discussion? This is a preliminary hearing in the Employment Tribunal to clarify the legal and factual issues to be determined by the Tribunal and to give directions on the future conduct of the case. Directions may include the date that both parties are obliged to give disclosure, the date the parties are due to exchange statements, whether a medical report is required, and to fix a date for the full merits hearing. Generally speaking, the Tribunal will not hear ‘evidence’ at a Case Management Discussion and will not give any opinion normally on the merits of the claim.
Employment Tribunal: What is a full merits hearing? This is the hearing at which the Employment Tribunal will hear evidence from witnesses, consider any documents they are referred to, and then reach a decision on whether the claim should succeed.
Employment Tribunal: What is a Schedule of Loss? This is a document setting out what a Claimant in a Tribunal claim is seeking financially. This might include i) a basic award, ii) compensatory award for loss of earnings and benefits and iii) injury to feelings in a discrimination or whistleblowing claim. Read more at Awards for Unfair Dismissal.
Employment Tribunal: What is a witness statement? A witness statement is the written statement of a witness in a Court or Employment Tribunal hearing. Normally the Tribunal will read the statement. Here are some pointers for preparing a witness statement:
- Use numbered paragraphs, and 1.5 spaced text
- Tell your story chronologically, in date order.
- Put everything in the statement that you want the Tribunal to consider in evidence from you.
- Give the facts; don’t argue your case (Claimant’s and Respondents have the opportunity to make closing arguments at the conclusion of the hearing)
- Refer to all relevant pages in the hearing bundle; don’t expect the judge to read the page in the bundle unless you have referred to that page in your statement
Employment Tribunal: What claims can be brought with less than two years’ service? Ordinarily, Unfair Dismissal claims can only be brought by employees with two or more years continuous service. There are however a number of claims that can be brought with less than two years service, including i) discrimination claims, whistleblowing claims, ‘automatic’ unfair dismissal for the assertion of a statutory right (for example the right to take paid holiday) and various other claims.
Grievance: What should I do if I have a complaint at work? You may be able to resolve any concerns informally by speaking to your Line Manager. However, if your concerns are more serious, or if you cannot sort them out by speaking to your manager, you should put them to your manager or HR in writing and mark it as a formal Grievance. If you are an employer and would like a free grievance procedure, do drop us a line.
Grievance: What is a fair grievance procedure? The essence of a fair grievance procedure is that your employer investigates your grievance, holds a meeting with you to discuss your grievance, notifies you of their decision, and gives you the right to appeal that decision. See the ACAS Grievance Procedure.
Gross Misconduct: What is Gross Misconduct? Gross misconduct is misconduct by the employee that is so serious that it completely destroys the relationship of trust and confidence with the employer. There are many examples, not just the obvious ones such as theft, fighting at work, racial harassment and so on. Read more at: What is Gross Misconduct?
Holiday Pay: What is my entitlement to paid holiday? Under the Working Time Regulations 1998, workers are entitled to 5.6 weeks paid holiday per annum. For someone working full time, that normally equates to 28 days per annum (including public holidays). For someone working 2 days a week part time, that would equate to 11.2 days holiday per annum. This becomes more complicated for Holiday Pay for Workers with Irregular Hours.
National Minimum Wage: What is the National Minimum Wage? For up to date details, see the government page on the National Minimum Wage.
Protected Conversations: What is a Protected Conversation? Employers can now have ‘Protected Conversations’ with employees, off the record, for the purposes of pre-termination negotiations with a view to ending employment on agreed terms. (s111A Employment Rights Act 1996). For example, an employer might have a Protected Conversation to discuss when someone proposes to retire. Protected Conversations can be used when there is not pre-existing dispute. A ‘Without Prejudice’ off the record conversation is normally only used when there is a dispute. Read more at: Protected Conversations.
References: Is my employer allowed to provide a negative reference about me? It is well established (in the case of Spring v Guardian Assurance Plc 1994) that an employer who provides a reference about a current or ex- employee is under a duty to take reasonable care in the preparation of that reference and may be negligent if the reference is inaccurate and the employee suffers a loss as a result. Therefore, a reference should balance positive as well as negative feedback. For this reason most employers restrict references to confirming job title and dates of employment. Read more at Work References.
Restrictive Covenant: What is a Restrictive Covenant (aka a Post Termination Restriction)? A restrictive covenant is a contractual term designed to prevent an employee from stealing clients, customers, employees or suppliers. Such post termination restrictions are only reasonable in terms and scope to protect legitimate business interests.
A restriction preventing a sales person poaching or dealing with customers after leaving might be enforceable in the courts. A restriction preventing the office junior from doing so may not be reasonable. The longer the restriction lasts, the less likely it is to be enforceable; so a 3 month restriction is more likely to be enforceable than a 12 month restriction. A restriction preventing the employee from working for a competitor is less likely to be enforceable if it prevents him or her from earning a living in their chosen field. Post Termination Restrictions need to be very carefully drafted if the employer wishes to enforce them.
Redundancy: What is a Fair Redundancy? Redundancy is defined as the reduction in the need for people to do work of a particular kind in a particular place. If a factory closes, everyone working there may be made redundant. However in most work places, it is not so straightforward. Read more at Redundancy Definition.
Redundancy: When can redundancy be unfair? Many employers get the redundancy process wrong, either because the definition of redundancy is not satisfied, because they don’t follow a fair redundancy procedure, or because they target the individual employee rather than the role that they perform. Read more at: When Redundancy Goes Wrong.
Tax: Can £30,000 be paid to an employee on termination without tax? The first £30,000 of a payment to an employee on termination of employment or in settlement of a Tribunal claim can be paid without deductions of tax, as long as it is not a contractual payment. A payment in lieu of notice (a ‘Post Employment Notice Payment’), or in lieu of holiday pay will always be taxable, as will a bonus or commission. Read more at Tax and Settlement Agreements.
Unfair dismissal: What is Unfair Dismissal? A dismissal will be unfair for employees with over two years’ service unless dismissed for certain prescribed reasons, mainly; Capability, Conduct, Redundancy or ‘Some Other Substantial Reason’. Read more at Unfair Dismissal Definition.
Unfair Dismissal: How long do I need to be employed to claim unfair dismissal? For most employees, they need to have at least two years continuous employment before they can bring a claim of unfair dismissal. However, you can claim ‘Automatic’ unfair dismissal with less than two years’ service if you are dismissed for asserting certain statutory rights, or if you are dismissed for being a whistleblower. Read more at Unfair Dismissal.
Unfair Dismissal: What award will I receive if I win my unfair dismissal claim? This will comprise two parts; a Basic Award (equivalent to a statutory redundancy payment) and a Compensatory award for loss of earnings etc. Read more at: Unfair Dismissal Award.
Settlement Agreements: What is a Settlement Agreement? A settlement agreement is one of two ways of settling statutory unfair dismissal claims, such as Unfair Dismissal. The essence of a Settlement Agreement is that the employee has to get independent legal advice. The other way of setting an employment claim is an ACAS Early Conciliation Agreement (see above). Read more at: What is a Settlement Agreement?
TUPE transfers: What are my rights under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘TUPE’)? If your employer is proposing to TUPE transfer you, they should carry out group consultation with you and any other affected colleagues. If there is a TUPE transfer, your continuity of employment and terms and conditions will be transferred to the new business. The new employer should not end your employment or change your contract unless there is a valid ‘Economic, Technical or Organisational’ reason to do so.
Whistleblowing: What is a whistleblowing claim under the Protection from Harassment Act? You blow the whistle if you inform your employer (or other prescribed organizations) that something illegal or unlawful, contrary to health and safety or contrary to natural justice is happening (a Protected Disclosure). Your disclosure has to be made in the Public Interest (not normally just about yourself). If your employer subjects you to a detriment as a result, a whistleblowing claim may arise. Read more at What is a Whistleblowing Claim?
Without Prejudice: What does ‘Without Prejudice’ mean? If you receive a letter marked ‘Without Prejudice’, or your employer has a Without Prejudice conversation with you, and there is an existing dispute, it means that the conversation is off the record and should not be referred to the Judge in a Court or Tribunal hearing. There are some exceptions to that principle though, for example when an offer is made ‘Without Prejudice Save As to Costs’ which is when a party reserves the right to refer to the offer in the context of a costs application. Sometimes Without Prejudice communications can be referred to if there is ‘unambiguous impropriety’.
Wrongful dismissal: What is Wrongful dismissal? Wrongful dismissal means dismissal in breach of contract. For example an employer may dismiss someone for Gross Misconduct without notice, but without reasonable cause. In that case the employee could bring a claim for notice pay.