PRE EMPLOYMENT CHECKS
An employer's first obligation is to check that all potential employees have the right to work in the UK.
Carrying out a right to work check, which is normally done on the first day of employment, involves a 4 stage process:
Seeing a copy of the employee's original passport or visa. A National Insurance card is not sufficient;
Checking the document for any restrictions on the right to work or obvious signs of fraud;
Taking a copy of the original document and storing it securely. The person who carried out the check should write on the copy document that they have seen the original and the date they saw it. They should then sign and date the copy.
If the employee holds a temporary visa, steps should be taken to diarise the visa expiry date so a follow up check can be carried out at that stage.
If the above process is not followed, and the employee is found not to have the right to work, the company can be fined and directors could face criminal proceedings.
WRITTEN STATEMENT OF TERMS AND CONDITIONS OF EMPLOYMENT
An employer is under a legal obligation to provide both employees and workers who begin work on or after 6 April 2020 with written particulars of terms and conditions of employment on or before their first day of work. Employees who were employed prior to that date must be issued with terms and conditions within two months of their start date.
If no terms and conditions are issued it is possible for an employee (or a worker who began work on or after 6 April 2020) to make an application to an Employment Tribunal who can then determine what particulars ought to have been included. Practically speaking, the main disadvantage if there is no written contract of employment is that issues of dispute can arise if the terms of employment are not sufficiently clear. However, it is also possible for compensation to be awarded to an employee who has not been provided with terms and conditions of employment in certain circumstances.
All employees with two years' service have the right to raise a claim for unfair dismissal.
- The maximum unfair dismissal award is £104,659 (a basic award of £16,140 and a compensatory award of £88,519).
- The cap on the compensatory award is the lower of £88,519 or 52 weeks' gross pay. 52 weeks' gross pay for the purposes of the statutory cap excludes pension contributions, benefits-in-kind and discretionary bonuses. Dismissals for whistle blowing or related to certain health and safety reasons remain uncapped, as do dismissals relating to unlawful discrimination.
- The median unfair dismissal award in 2018/19 was £6,243.
- The amount a Tribunal will award for unfair dismissal will depend almost entirely on the employee's salary and benefits at the date they were dismissed and how quickly an employee is able to obtain alternative comparable employment, as a Tribunal will compensate the individual for their loss rather than making any punitive award against the employer.
- In certain specific circumstances, there is no limit on the amount that a Tribunal can award. These circumstances include dismissal for health and safety reasons or dismissal following the employee making a protected disclosure (whistleblowing). In addition, there is no limit on the amount that can be awarded where the dismissal is related to unlawful discrimination (i.e. discrimination on the grounds of sex, race, disability, age, marriage and civil partnership, sexual orientation, gender reassignment, pregnancy and maternity and religion or belief).
- If an employee wishes to raise a claim for unfair dismissal then they must first attempt ACAS early conciliation within three months of their employment terminating. If early conciliation is unsuccessful or either party does not wish to progress it then an Early Conciliation certificate will be issued. The Claimant can then proceed to make a claim to the tribunal. The time limit for making a claim will be extended to take account of the early conciliation process. The requirement for early conciliation applies for the majority of claims that can be made to a Tribunal.
It is also possible for an employee to raise a claim for constructive unfair dismissal. This occurs where the employer has materially breached the employee's contract of employment in such a way that the employee is entitled to resign and treat themselves as having been dismissed.
In order to terminate employment fairly the dismissal must be for one of the following grounds:
- Capability (including competence to do the job and ill-health).
- Contravention of a statutory enactment.
- Some other substantial reason.
In order to dismiss an employee fairly a fair procedure is essential. Employers are advised to seek guidance prior to proceeding in order to minimise the risk of a claim being made or, if a claim is made, to be in a stronger position to defend it.
- With regard to capability issues, generally speaking, a series of warnings should be issued (with a process at each stage which is compliant with the ACAS code – see below - being followed) over a period of time advising the employee of the particular shortfalls in their performance and any improvements required.
- Similarly, with regard to conduct which does not amount to gross misconduct, again, a series of warnings should be issued. The process at each stage should be compliant with the ACAS code.
If the conduct is sufficiently serious then an employee could be dismissed for gross misconduct without any previous informal or formal warnings. However, in such circumstances, it is still essential that a proper procedure (compliant with the ACAS Code) is followed which will often involve suspending the employee at the outset whilst a full investigation is carried out. Once the employee has been suspended they would then be invited to a disciplinary hearing but, employers are advised to seek advice should such a situation ever arise.
EMPLOYEES WITH LESS THAN TWO YEARS' SERVICE
Employees usually require two years’ service before they can raise an unfair dismissal claim. There are a number of exceptions to this qualifying service requirement. These exceptions include (but are not limited to) dismissals for whistleblowing, dismissals related to certain health and safety reasons or dismissals relating to unlawful discrimination. However, in most cases, provided there is no discriminatory reason underpinning the decision, it will very often be possible to dismiss an employee with less than two years' service without any significant procedure being followed. Having said that, employers should still, as far as possible, take into account the procedural recommendations in the ACAS Code of Disciplinary and Grievance Procedures (see below) in most cases.
For more information on this point see our article on dismissing employees with less than two years' service.
As a risk management tool, employers should have a diary system in place to review the employment relationship with any new employees at the end of their probationary period and perhaps also after six months, twelve months, eighteen months and twenty months. Probationary periods are a useful way to monitor a new employee’s performance and, in most cases, an employer can terminate the employment relationship, relatively easily, during or at the end of the probationary period. Another option is to extend the probationary period for a further period of time, such as three months, with a view to flagging up to the employee that all is not well. If the probationary period is to be extended there should be a contractual right to do this and the period should be extended prior to the original period expiring.
ACAS CODE OF PRACTICE ON DISCIPLINARY AND GRIEVANCE
The ACAS Code of Practice on Disciplinary and Grievance Procedures provides a guide for “expected” practice which employers should follow. This code can be referred to in tribunal proceedings and the tribunal has the power to award an increase of up to 25% on any compensatory award where the employer has unreasonably failed to follow the ACAS Code. The Code can be found and downloaded from the ACAS website: www.acas.org.uk.
As indicated above, it is unlawful to discriminate against an employee on the basis of age, sex, race, disability, marriage and civil partnership, sexual orientation, gender reassignment, pregnancy and maternity, and religion or belief. In addition, under the Equality Act 2010 it is unlawful to offer different and less favourable pay and conditions where women and men are doing the equal work (i.e. like work or work rated as equivalent or work of equal value).
It is also unlawful to discriminate against someone on the basis that they work part‑time or on the basis that they have a fixed‑term contract.
Employers should have an Equal Opportunities Policy in place. This can be of assistance in the event that an employer requires to defend a discrimination-based claim. Managers and employees should also be provided with relevant training in respect of the policy. Again, this can be of assistance in the event that a discrimination claim is raised.
WORKING TIME REGULATIONS
The Working Time Regulations 1998 apply to all "workers" which includes employees. The main features of the Regulations are as follows:
- The employer must take all reasonable steps to ensure that the worker does not exceed the limit of an average of 48 hours per week over a reference period of normally 17 weeks.
- Workers can opt out of the working time limit of 48 hours by signing an agreement.
- Employers must keep a record of workers who have agreed to work longer hours.
- Workers cannot be forced to sign an opt-out agreement and can cancel at any time by giving the notice as agreed between the employer and worker.
- Employers are required to keep certain records regarding the working time of their employees.
- Full time workers are entitled to 28 days’ paid annual leave per year (pro rata for part‑time workers).
- The 28 day period includes any public and bank holidays, i.e. the entitlement under the Working Time Regulations is 28 days not 28 days plus statutory holidays.
- Subject to specific rules for workers under 18, workers are entitled to a rest break of 20 minutes if they work more than six hours.
- There is a right to have 24 hours off per week and at least 11 hours of uninterrupted rest each day.
There are certain specific rules regarding night‑time workers including the right to a free health assessment. There are also more stringent rules in relation to the 48 hour working week and rest periods for night workers.
NATIONAL MINIMUM WAGE
All workers are covered by the national minimum wage legislation. The minimum hourly rates as of 1 April 2020 are as follows:
- National living wage rate for workers aged 25 and over: £8.72
- Standard adult rate for workers aged 21 to 24: £8.20
- Development rate for workers aged 18-20 inclusive: £6.45
- Young workers rate for 16 and 17 year olds: £4.55
- Apprenticeship rate for apprentices under 19 years of age or those aged 19 and over but in the first year of their apprenticeship: £4.15
These rates will change again in April 2021.
Employers are only required to pay statutory sick pay (SSP) if the employee is absent because of sickness for a continuous period of four days or more. If the employee is absent for less than four consecutive days then they are not entitled to SSP. Employers must keep records of payments and absences in excess of four consecutive days. Employees may not claim SSP for more than 28 weeks in each period of sickness absence.
Most employees qualify for SSP. If the employee is not entitled to SSP then they may be able to claim incapacity benefit instead. However, this claim is made via the Government and not via the company, albeit the company may be asked to provide certain information in respect of the employee's claim.
It is possible for an employer to pay more than just SSP in the form of occupational or contractual sick pay. The specific sick pay terms would be set out in each employee’s contract of employment.
The Government's Fit for Work Service no longer provides occupational health assessments for employees who have been absent from work for four weeks or more. However, the service continues to provide access to a telephone helpline and website which can be used by employees, employers and GPs. The website allows both employers and employees to chat online to a specialist adviser or email them a question. On the website there is also a "library of advice" which provides resources to employees, employers and GPs on a variety of topics relating to health and work.
The website can be accessed here:-
Fit for Work - Scotland
Fit for Work - England and Wales
The law relating to pensions changed with the implementation of “auto-enrolment”. Basically, employers are obliged to automatically enrol their eligible jobholders into a pension scheme from their relevant staging date.
FAMILY FRIENDLY LEAVE
There are certain family friendly rights which employees enjoy. Very broadly, these are as follows:
1. Maternity leave
Employees are entitled to six months' ordinary maternity leave (OML) and six months' additional maternity leave (AML).
OML is a period of 26 weeks' leave available to all employees, regardless of length of service, who give birth and comply with the notification conditions. AML follows immediately after the end of OML and lasts for a further 26 weeks, giving a total entitlement of 52 weeks' statutory maternity leave.
An employee will be entitled to statutory maternity pay (SMP) where she has:
- 26 weeks' continuous employment with the employer up to and including the 15th week before the expected week of childbirth (EWC); and
- average earnings of at least the lower earnings limit for National Insurance during the eight-week period ending with the 15th week before EWC.
If the employee satisfies the criteria above she will receive payment in respect of the initial 39 week period of maternity leave. The first six weeks are paid at 90% of the employee's usual rate of pay (before tax) for the employee in question. Thereafter, for the remaining 33 weeks of the paid portion of maternity leave, only the flat rate of SMP is paid. The current SMP flat rate is £151.20. The amount of maternity pay which can be recovered from the Government by the employer depends on the employer's National Insurance contributions in the appropriate tax year. However, at least 92% of SMP will be recoverable and, in many cases, 100%
2. Shared parental leave
Shared parental leave (SPL) is completely separate from and does not affect the parental leave which is discussed at point 5 below.
A mother or primary adopter is entitled to 52 weeks of maternity/adoption leave. SPL allows the mother or primary adopter to give notice to end their maternity leave early and share what would have been the remainder of the maternity/adoption leave with the child's father or the mother's husband or civil partner or partner; or, in the case of adoption, the secondary adopter (the "other parent"). The mother's partner for these purposes is a person (whether of a different sex or the same sex) who lives with the mother and with the child in an enduring family relationship but is not the mother's child, parent, grandchild, grandparent, sibling, aunt, uncle, niece or nephew.
For more details see - Shared parental leave
3. Adoption leave
Adoption leave operates in much the same way as maternity leave and in the event that the conditions are met, an employee adopting a child will benefit from Statutory Adoption Pay. This is paid for 39 weeks.
4. Paternity leave
An employee who has a child born or expected to be born or placed for adoption and satisfies certain conditions is entitled to two weeks’ paternity leave. This can be taken at any time up to eight weeks after the date of birth or placement for adoption. In order to qualify for paternity leave, the employee must be the father of the child or be married to or civil partner of the mother or adopter of the child, or be his or her partner. In addition, the employee must have or expect to have responsibility for the upbringing of the child. The employee also requires to give notice to the employer and must have 26 weeks’ continuous employment ending with the 15th week before the EWC. Paternity pay is paid at the same flat rate as SMP.
5. Parental leave
Any employee who has completed one year's continuous employment and who "has, or expects to have responsibility, for a child" has a legally enforceable right to take unpaid parental leave while the child is under the age of eighteen, subject to an overall maximum of 18 weeks leave in respect of each child (4 weeks per year in terms of the default scheme).
6. Other rights
All employees with 26 weeks of service are entitled to request a flexible working arrangement. Employers require to consider any such request reasonably. ACAS have published a Code of Practice for Handling Requests to Work Flexibly in a Reasonable Manner.
In addition, employees have the right to time off (unpaid) to deal with certain domestic emergencies.
DATA PROTECTION - employment aspects
Employers require to comply with the General Data Protection Regulation (GDPR) and also the Data Protection Act 2018 including when processing the personal data of job applicants, workers, employees, consultants, volunteers and others.
The GDPR sets out seven key principles which lie at the heart of the data protection regime and must be complied with in relation to:
- Lawfulness, fairness and transparency
- Purpose limitation
- Data minimisation
- Storage limitation
- Integrity and confidentiality (security)
Additional restrictions apply to the processing of (a) "special category" data relating to an individual's race, ethnic origin, politics, religion, trade union membership, genetics, biometrics (where used for ID purposes), health, sex life or sexual orientation and (b) criminal offence information.
Individuals also have extensive rights under GDPR including:
- The right to be informed
- The right of access
- The right to rectification
- The right to erasure
- The right to restrict processing
- The right to data portability
- The right to object
- Rights in relation to automated decision making and profiling.
It is important for employers to comply with GDPR not least given the possibility of substantial fines which can be imposed by the ICO (up to a maximum of €20 million, or 4% of total worldwide annual turnover, whichever is higher).
HEALTH AND SAFETY
Under the Health and Safety at Work etc Act 1974 certain obligations are placed on employers with regard to health and safety such as the general duty on employers 'so far as is reasonably practicable' to protect the health, safety and welfare at work of all employees. In addition, employers must provide safe plant and systems of work, safe methods for the use, handling, storage and transport of articles and substances, necessary information, instruction, training and supervision, a safe and well-maintained workplace, including safe access and egress and a safe working environment with adequate welfare facilities. In addition to its own employees, an employer owes statutory duties to:
other people's employees working on the employer's premises; and
members of the public who are affected by the activities of the employer.
Section 7 of the Health and Safety at Work etc Act 1974 also places a duty on employees to take reasonable care of their own health and safety, and that of anyone who could be adversely affected by their 'acts or omissions at work' and to co-operate with their employer in taking steps to meet legal requirements. Therefore where reasonable care has not been taken by the employee and the employer has done everything in his power 'so far as reasonably practicable' to comply with the various obligations placed on him, the employer may not be liable for the breach.
Under the Management of Health and Safety at Work Regulations 1999 the employer should appoint one or more persons he believes are competent to assist him in carrying out his health and safety obligations. It is for the employer to decide on the person suitable for the post and therefore whether they are competent. Factors to be considered in judging competency are whether they have sufficient training and experience or knowledge and other qualities to enable them properly to assist in undertaking the necessary measures. The employer will still be ultimately responsible for health and safety – the fact that they have appointed people to assist will not absolve them from responsibility.
There are more detailed regulations setting out specific health and safety requirements for employers relating to:
assessing risks to health and safety at work;
devising a written health and safety policy where there are five or more employees (where there are fewer than five employees appropriate measures still require to be taken but there is no need to commit this to writing);
providing employees with adequate first aid facilities;
notifying employees of general matters under health and safety law.
Any breach of these obligations will result in the employer being held liable. Liability can be both civil and criminal. Responsible managers and officers of the company may be personally liable in addition to the company. Employers are obliged to maintain insurance against liability for bodily injury or disease sustained by employees arising out of or sustained in the course of their employment in the UK. The insurance must be taken out under one or more approved policies with authorised insurers.
Over and above the legislation already referred to there are a vast number of more detailed regulations that target specific work related hazards including safety of the workplace and work equipment, fire hazards and lifting or other strenuous activities to name but a few.
The Health and Safety Executive enforce compliance with the regulations but they also produce a lot of helpful information for employers that can be accessed on their website http://www.hse.gov.uk/. For employers working in low risk environments the HSE have an area of their website dedicated to making health and safety simple. That information can be accessed here.
PAYROLL AND TAXATION
It is necessary to register with HM Revenue & Customs (HMRC) for employee income tax and national insurance purposes. Before an employer registers with HMRC it is necessary to gather certain preliminary information which the employer will then need during the registration process (which in most cases can be done over the telephone or by email). The pieces of information required relate to general facts about the company (e.g. business name, address, nature of business), details about how many employees will be involved and information on where the payroll will be run from and the names, addresses and phone numbers of those looking after the payroll. With these items, employers can register with the HMRC who will then send all the information required to set up the payroll. More details can be found on HMRC’s website: www.hmrc.gov.uk.
EMPLOYMENT LAW FACT CARD 2020/21
Our employment law fact card is full of useful information for employers. You can access the PDF version at the link below, or if you would like a free hard copy, please email firstname.lastname@example.org with your name and address.
EMPLOYMENT LAW REFORM TIMELINE
For a timeline of recent and future changes see Employment Law Reform Timeline.