About the Lawcards Series
Employment Lawcards
Chapter 1: The contract of employment
- The distinction between employees and independent contractors
- The evolution of the tests at common law
- Application the three tests established in Ready Mixed Concrete (South East) Ltd. v Minister of Pensions and National Insurance (1968)
- Understanding and application of the ‘business on own account’ test for employment status
- Appreciation of the significance of ‘mutuality of obligations’ in determining who is an employee
- The limitations of the parties’ use of labels in establishing employment status
- The sources of the contract of employment
- The major provisions required under s 1 Employment Rights Act 1996, known as the ‘written particulars.
- The implied terms that provide rights and obligations for the employer and the employee
- The protections a restraint of trade clause provides to an employer when an employee leaves the business.
Chapter 2: Equal pay
- All contracts of employment are deemed to include an equality clause.
- The English law (the Equal Pay Act 1970) is to be interpreted in conformity with the European Community laws (Article 141 and the Equal Pay Directive).
- The term ‘pay’ includes any consideration that the worker receives from the employer (such as sick leave, pension contributions, holiday pay etc).
- There are three ‘heads’ under which a claim can be made – like work; work rated as equivalent; and work of equal value.
- Claims have to be made using a comparator from the same employment.
- The comparator may be a predecessor but they must be a member of the opposite sex.
- Equal value claims can include a claimant who has been rated as performing ‘higher’ work (not equal work) than the comparator.
- The employer can raise a ‘genuine material factor’ defence that the difference in pay is not due to the sex of the claimant.
- A claim must be made (in most circumstances) within six months of leaving employment (or any time during).
- The claim may be back-dated up to six years.
- There is no qualification period to claim under the law.
Chapter 3: Discrimination
- Sex discrimination legislation has effect before, during and after employment.
- English law must be interpreted in conformity with European Community law.
- Protection against discrimination has been extended to transsexuals; homosexuals; the religion or belief of the claimant; and a worker’s age.
- Discrimination may be ‘direct’ or ‘indirect.’
- Direct discrimination involves treating a worker less favourably due to their sex, race, disability and so on.
- Direct discrimination cannot be justified and the motives of the employer are irrelevant (although exceptions to the provisions exist).
- Dismissal / less favourable treatment of a worker due to her pregnancy is automatically direct sex discrimination.
- A comparator is required to establish a claim, but this may be a hypothetical comparator.
- Claims have to be made within 3 months of the last complained of act of discrimination.
- The definition of indirect sex discrimination was changed in October 2005 and involves an employer applying a ‘provision, criterion or practice’ with the effect of placing the claimant at a disadvantage.
- Indirect discrimination can be justified if there are objective and reasonable grounds for the employer’s action and this is not based on sex, race, disability and so on.
- Employers can be vicariously liable for actions that amount to sex or race discrimination by their employee or agent. To avoid such a situation, employers must take reasonable steps to avoid the discrimination.
Chapter 4: Termination of employment
- Dismissals with notice are fair at common law for any reason.
- In the absence of a contractual term, statute provides a minimum of one week’s notice (after employment for a month) for each year worked (to a maximum of 12 weeks).
- Payments in lieu of notice have to be expressly included in the contract to have any effect (they will not be implied).
- Dismissal without notice is generally held to be a breach of contract and enables a claim for wrongful dismissal.
- Dismissal without notice (summary dismissal) can be justified in the event of a fundamental breach of the contract
- The doctrine of frustration ends the contract if the unforeseen event was neither party’s fault
- A fundamental breach of the contract will allow the employee to accept this as a repudiation and claim constructive dismissal (a form of unfair dismissal).
- Evidence discovered after the dismissal is allowed by the courts to justify an otherwise wrongful dismissal.
- The primary remedy in wrongful dismissal claims is damages, although injunctions are used to protect the parties’ interests.
Chapter 5: Unfair dismissal
- Protection under unfair dismissal is only available to employees who qualify as being continuously employed by the employer for at least one year; have been (unfairly) dismissed; and have submitted a claim within three months of the dismissal (unless the grievance procedures are used).
- Some dismissals are automatically unfair – pregnancy; trade union activities etc and do not require the one year’s continuous service.
- s. 98 Employment Rights Act (ERA) 1996 identifies potentially fair reasons for the employer to dismiss the employee.
- Reasons discovered after the dismissal will not justify an unfair dismissal but may reduce any compensation awarded.
- An employer’s action to dismiss will be judged against those of a ‘reasonable’ employer – but not the tribunal’s view of whether it would have dismissed.
- The employer does not need proof of the employee’s action to substantiate one of the provisions under s. 98 ERA 1996, only objective and reasonable grounds for their belief. The statutory procedures must be complied with to protect the employer in disciplining / dismissing an employee.
- The remedies for unfair dismissal include compensation, re-engagement, or reinstatement.
Chapter 6: Redundancy payments
- Redundancy payments are calculated in the same way as the basic award in unfair dismissal claims (albeit work under the age of 18 does not count).
- The employee must qualify for protection as identified under the Employment Rights Act 1996.
- In a redundancy claim, there is a presumption of redundancy in the dismissal and the burden is placed on the employer to disprove this.
- There exist several situations where the employee leaving the employment will not constitute a dismissal which subsequently prohibits a claim for redundancy.
- Redundancy occurs when the business the employee worked at closes or where the employee becomes surplus to the requirements of the business.
- A business may need to re-organise and this can prohibit a redundancy claim.
- Workers rights are protected through the Transfer of Undertakings (Protection of Employment) Regulations 2006 in the event of a business being sold.
- The employer is allowed to claim that dismissals are due to an economic, technical or organisational reason, that can justify the employer’s action.
- Employers have a duty to consult with the workforce or their representatives in the event of redundancies or transfers.
Chapter 7: Collective labour relations
- There are limited rights to claim for unfair dismissal for employees involved in industrial action.
- Pay may be lawfully withheld from striking workers.
- Industrial action may constitute a breach of contract enabling an employer to dismiss without notice and / or seek damages.
- Trades unions are subject to claims for committing economic torts such as inducement to breach a contract and intimidation of workers.
- Immunities from prosecution exist for a person acting in ‘contemplation or furtherance of a trade dispute’ (the golden formula). This protects against the tort of interference with contract.
- The immunity is lost in situations contrary to good faith (such as secondary actions etc).
- Ballots are required of trades unions before actions may be lawfully taken and strict rules apply to their administration.
- Industrial action can involve civil and criminal liabilities.