Employment

It is much more efficient and transparent if both an employer and employee enter into an employment contract. However, if you are an employer you should at the very least provide your employees with a ‘written statement’ also known as statement of main terms of employment. This statement can be incorporated in various forms such as in an offer of employment letter or simply by way of a full written statement. The statement must include the following details:

• The employee’s name and the employer’s name
• The employee’s title or a brief job description
• The employment start date
• The employee’s pay rate and when they will be paid
• The employee’s hours of work
• The employee’s holiday entitlement
• Where the employee will be working (if the employee is based in more than one place it should say this along with the employer’s address)
• Sick pay arrangements
• Notice periods
• Information about disciplinary and grievance procedures
• Any collective agreements that affect the employees employment terms or conditions
• Details of pensions and pension schemes
• If the employee is not permanent, how long the employment is expected to continue, or if a fixed term employment, the date that the employment will end.

We shall be pleased to be of assistance on all employment matters.

An employment contract governs the relationship between the employer and the employee. A contract of service will be established and will determine whether the employee is entitled to certain statutory rights such as statutory maternity pay, the right not to be unfairly dismissed and statutory redundancy pay. This however must be distinguished between a contract for services where the employer and employee relationship does not arise; this is a contract under which a person gives service as an independent contractor. Workers who are self employed – independent contractors – do not benefit from the numerous employment protection rights offered to employees.

The case of Ready-Mixed Concrete (South East) Limited v the Minister of Pensions and National Insurance [1968] determined that the key three tests for the existence of a contract of service were as follows:

1. Does an agreement exist whereby the employee provides their own work or skill in the performance of service for the employer (‘personal service’) in return for a wage or remuneration?
2. Is there control of the employee by the employer (‘control’)?
3. Are the other provisions consistent with a contract of service (‘other factors’)?

NEGOTIATING THE CONTRACT

Most contracts do not have to be in writing to be legally binding, and employment contracts are no different. The law always seeks to enforce the terms of the employment contract and if some or all of the terms were not agreed the law will ascertain what the parties intended by looking at previous discussions and correspondence. Main terms such as overtime pay, sick pay, holidays can all be implied into an employment contract if no express agreement was reached.

Most employers offer their employees standard form employment contracts which are normally non-negotiable; even so, a potential employee may wish to be advised on the implications of the contract before signing. However, in certain circumstances such as if you are an employee with very special skills who has been head-hunted, you may be in a strong position to negotiate your own terms of employment.

We can advise employers on revising, improving and strengthening their standard form contracts and also draft one-off employment contracts, as and when required. Whereas employers may be within their rights to dismiss an employee they often fall down on procedural points often referred to in the employment contract and/or any accompanying disciplinary and grievance procedures. It is therefore always advisable for employers to seek legal advice before a dismissal. There can be substantial legal costs in defending a claim, win or lose. It would therefore be false economy to try to save money by not taking legal advice at the outset.

We also advise employees on the terms of their employment contract and negotiate certain terms and clauses on their behalf. Often, contracts for high-ranking employees can be very long and complicated, often including a number of fringe benefits which require negotiation and to be properly documented in the employment contract. Furthermore, company directors and other senior staff often require an exit strategy or a ‘Golden Parachute’ clause which makes a provision for an enhanced severance payment on the termination of an employment contract, in the event that the termination follows a particular event.

We can also advise on and draft employment termination notices and settlement/compromise agreements.

It is essential for all employees to be aware of their rights and what they are entitled to, namely in regards to:

• Pay
• Work Duties
• Employment Contract and/or Main Terms of Employment
• Working Hours (including overtime and rest breaks)
• Time Off and Holidays
• Sickness and Absence
• Maternity and Paternity Leave
• Working Flexible Hours
• Pensions
• Fair Treatment in the Workplace
• Discrimination and Harassment

Employment is an area of law which is ever changing and which will no doubt affect most of us at some point in our lives. The most common employment disputes involve the dismissal of an employee and that employee feeling that the dismissal was unfair or that the employer did not take the correct and appropriate steps before dismissing the employee. The employment contract always plays a key role as it is the hook from which all the employee’s rights hang. It is the starting point in deciding whether an employee has been unfairly dismissed, has been made redundant etc.

A properly drafted employment contract will specify how the employee is expected to work, how much holiday they can take, whether they will be paid for sick days, their job role and place of work and all other main terms of the employment. The employment contract is the basis of the employer/employee relationship and almost all employment law disputes cannot be resolved without first considering the terms of the employment contract. Ironically, the law does not insist that an employment contract should be in writing however the employer must provide the employee with a written statement of the main terms of their employment. Where no main terms or contract has been documented, the first stage of any dispute would be to pinpoint the terms of the employment as accurately as possible which may have been indirectly documented in previous letters and e-mails. Generally, where there is no written contract, the law will examine the circumstances surrounding the employment and decide what it thinks the parties meant to agree.

Actual Dismissal is when the employee is dismissed by their employer either with or without the correct notice period.

In the context of employment law, a Settlement Agreement is a legally binding document which outlines the terms of an employee’s departure from their current employment.

Previously known as a Compromise Agreement, a Settlement Agreement is used mainly where an employee has an actual or potential claim against their employer; or often used when an employer wants to take a ‘belts and braces’ approach to the departure of an employee who could potentially cause problems in the future.

The document will usually outline that the employee agrees not to start certain employment claims against their employer, usually in return for a termination payment agreed between the parties.

The main benefit of Settlement Agreements is that the parties avoid the time consuming and costly procedure involved in dealing with court or tribunal proceedings. It is a quick and very efficient way of an employer and employee parting ways, hopefully on amicable terms. The document also provided security to the employer, because they can be satisfied that the employee will not, or should not, bring a claim. On the other side, the employee will know exactly what payment they will be receiving from the employer and a standard or agreed reference is also included as part of the settlement package.

Usually, most employees will agree directly with their employer the terms on which they will exit the business. These discussions should always be undertaken ‘without prejudice’ so that they cannot be referred to in any later court or tribunal proceedings.

Once those terms have been agreed, the employer will prepare the Settlement Agreement and they will provide this to the employee. The terms of the Settlement Agreement will usually remain ‘without prejudice’ until the document is signed.

The employee will then have to find an independent and qualified legal adviser. The employer will usually agree to pay for an employee to receive independent legal advice, or at the very least make a contribution towards the cost.

The role of the adviser is to consider the Settlement Agreement and meet and/or speak with the employee to outline the terms and effect of the Settlement Agreement. Further, they should answer any questions the employee has to ensure they fully understand the contents of the Settlement Agreement. The legal adviser should also highlight any aspects of the Settlement Agreement which are not appropriate for the circumstances and ensure the employee understands what they will be signing.

In some instances, further negotiations make take place between the employer and employee (or their respective solicitors), if the circumstances warrant the same, so as to agree the terms of the Settlement Agreement.

Once the employee is satisfied with the terms and effect of the Settlement Agreement, and if they are happy to proceed, the legal adviser will provide a Certificate of Advice to the employer to confirm to them the advice which has been given to the employee.

The employee and employer will sign the Settlement Agreement and they will both have to comply with the terms of the same.

The employer will have to make any payment to the employee within the timescales outlined in the Settlement Agreement.