Termination of Employment
Contracts & Pay
A contract is a two-sided agreement. It cannot be changed without agreement between both sides. But some employers look for ways to force changes on workers.
- They might slip a term into a written contract, the Written Particulars or a Company Handbook “reserving” the right to change the contract. If you let this go unchallenged, you may find yourself in difficulties. Your ETAS Direct representative can contact your employer to say this is not a term of your contract.
- They might dismiss you and offer you a new contract of employment, containing the terms they want to impose. If you accept the new contract (even “under protest”), you are bound by its terms. However, because your old contract was terminated by the employer, you can lodge an unfair dismissal complaint (even though you are still at work). See below for advice on unfair dismissal.
- They might “unilaterally impose” different terms (without dismissing you). If the change does not affect the way the contract currently operates (e.g. the employer revokes your enhanced redundancy pay), you should write to your employer refusing to accept the reduction in terms.
- However the new term might have an immediate impact, e.g. a new shift system. In that case, you should not continue to work “under protest”, because that is incompatible with rejecting the new term. Provided the change is substantial, you can treat it as a dismissal, combined with an offer of a new contract, as above. So you should write to your employer saying you regard the change as fundamentally breaching your contract and amounting to a dismissal; that you regard yourself as dismissed; but that you accept the changes as an offer of a new contract, which you will accept under protest and in mitigation of your loss. You can then continue to work, while lodging an unfair dismissal complaint. But this is a very tricky area. Ask your ETAS Direct representative for help.
Unfair dismissal complaints are always difficult to win, particularly when they concern the unilateral imposition of worse terms and conditions. Your ETAS Direct representative will consider the following questions: Did the employer have a genuine business reason for the change (even if you disagree with it)
- Did that reason merit such serious changes to your contract?
- Did the employer genuinely try to reach agreement on the changes?
- Were the changes accepted by a majority of your colleagues?
Special rules apply to changes imposed by a new employer after a Transfer of an Undertaking, e.g. sale of a business, or contracting-out. A special law known as “TUPE”, says that such changes are not binding, even if agreed by the workforce, because European law guarantees the same terms and conditions under the new employer. Your ETAS Direct representative has access to specialist advice on TUPE through its specialist Employment Law Barristers.
Part-time workers have the same statutory rights as full-time workers. For example, they are entitled to redundancy payments and protection against unfair dismissal; maternity and sickness rights; written particulars of terms of employment; time off; suspension and lay-off payments; protection against unlawful deductions from pay and against discrimination on grounds of sex or marital status, race, disability, sexual orientation and religion or belief. As with full-time employees, some of these rights are only acquired after a period of continuous service. Part-time workers are also entitled to be paid for all hours spent up to the equivalent hours paid for and to full time workers when attending approved union training courses.
The law also tackles discrimination against part time workers in contractual terms. Unless the employer can objectively justify less favourable treatment, part-timers are entitled:
- to the same hourly pay
- to the same hourly rate of overtime, once they have worked the normal full time hours
- to entitlement to leave on a pro rata basis – annual, sickness, maternity/paternity and parental
- to the same access to occupational pension schemes
- to participate in profit sharing or share option schemes
- to be entitled to benefits such as subsidised mortgages and staff discounts
- not to be excluded from training or promotional opportunities
- to be treated no less favourably in the case of career breaks
- to be treated no less favourably in redundancy situations as their full time equivalents.
An employee or a worker must therefore find a comparator employed or working on broadly similar work and who works under the same type of contract at the same establishment. If you change from a full time to a part time contract, the comparison can be made with your own previous full time conditions. If there is no appropriate full time comparator at the establishment, you can widen to scope to include another establishment of the same employer.
Employers should review as a matter of best practice the employment and career structure of part time workers; to consider extending part time working and job sharing, and to consult with worker representatives on arrangements for part time working.
If a part time employee considers s/he has been less favourably treated on grounds of working part time, they will be entitled to a statement of reasons for such treatment. The employer must provide this within 21 days. Failure to do so can be taken into account in any Tribunal proceedings. The part-timer is protected against victimisation for any action taken in connection with these rights.
Complaints on failure to comply with the regulations should be made to an Employment Tribunal generally within three months of the non-compliance. The Tribunal can make a declaration of rights; award compensation and/or recommend action to eliminate or reduce any adverse impact.
Only bank workers themselves are entitled to bank holidays. For all other workers there is no automatic right to take bank or public holidays as paid or unpaid leave, or to take time off in lieu. Any right to do so depends on the terms of your contract. There may be express terms in your contract giving you a right to time off on some or all bank and public holidays. There may also be terms implied by custom and practice.
In some industries it is common for the entire workplace to be shut down between Christmas and New Year. In others there may be a shut down for two weeks over that period and for two weeks in the summer, so that all workers take holidays at the same time. In this case your contract may specifically state that you can only take holidays during shutdowns.
The Working Time Regulations (WTRs) give workers a statutory right to 28 days holiday a year. If your contract does not have the minimum paid holidays required by the WTRs, you will be entitled to that minimum by virtue of the WTRs. However, unless agreed otherwise, paid time off on bank or public holidays will count towards the minimum under the WTRs, so you may find that up to 8 of the 28 days are swallowed up by bank or public holidays.
On 1 October 2002 the Fixed- Term Employees (Prevention of Less Favourable Treatment) Regulations came into force. They implement a 1999 European Union Directive aimed at controlling the misuse of fixed-term contracts.
Fixed-term employees now have the right not to be treated less favourably or suffer any other detriment in comparison with a permanent employee in pay and other conditions, unless the employer can objectively justify it.
- The Regulations only cover those who legally qualify as employees, not the wider legal definition of worker. So, some temporary workers may be excluded. Agency workers are also excluded.
- The Regulations say that where an employee has been employed on a contract, or a series of contracts without gaps, for four years or more ,any further extension will automatically make the contract permanent, unless the employer can objectively justify the extension. The start date for this provision is 10 July 2002, so any time on a contract or contracts before this does not count.
- Employers are required to inform fixed-term employees of permanent vacancies.
- Redundancy Waiver Clauses, which allow an employee to sign away rights to a redundancy payment at the end of the fixed-term contract are abolished for all contracts signed on or after 1 October 2002. However, Redundancy Waiver Clauses signed before this date will still be valid.
Before or at the time of each payment of wages or salary, every employee is entitled to a written and itemised pay statement.
This pay slip must state:
the gross pay
- the net pay
- the amount of any variable or fixed deduction
- the reason for any variable or fixed deduction
- where parts of net pay are paid in different ways, the method of payment of each part and its amount.
The pay slip can give the total amount of fixed deductions (rather than the amount of each one), provided the employer has already given you a “standing statement of fixed deductions”. This standing statement is valid for a maximum of one year, and must give
- the amount of each fixed deduction
- the reason for it
- the interval at which the deduction will be made.
If your employer does not give you a pay slip, or if the pay slip does not contain the required information, you can complain to an Employment Tribunal not later than three months after your employment ends.
No deduction may be made from your wages unless either:
1. It is allowed by your contract or;
2. You have agreed in writing to the deduction or;
3. It is allowed by statute, for example deductions for PAYE tax and national insurance.
If a deduction is made from your wages:
1. The term of your contract allowing the deduction must have been shown to you or;
2. If your contract is not in writing, you must have been notified in writing about the deduction before it is made
Sums wrongfully deducted from your wages must be repaid by your employer.
Your ‘wages’ includes bonuses, commission, holiday pay, statutory sick pay or statutory maternity, paternity or adoption pay. ‘Wages’ do not include payments under loan agreements, expenses, benefits in kind, pay in lieu of notice or payments related to redundancy.
HOWEVER, an employer can make deductions without your consent:
1. to reimburse themselves for having overpaid your wages
2. to deduct wages where you take part in industrial action.
OVERPAYMENTS
Your employer can generally recover overpayments made to you by mistake of fact (such as a clerical error) provided the overpayment was one you should have noticed; and provided you have not, in good faith, incurred expenditure you otherwise would not have incurred.
However, your employer cannot recover an overpayment made to you by mistake of law such as a mistake as to the meaning of your contract, the correct tax deduction or NI payment. This area is very tricky and you should always consult your local ETAS Direct representative using our online questionnaire, who has access to specialist advice.
Annual leave should be agreed when an employee starts work. Once an employee starts work details of holidays and holiday pay entitlement should be found in the employee’s written contract, where there is one, or a written statement of employment particulars given to employees by their employer.
Note: The written statement is required by law and must be given to employees by the employer no later than two months after the start of employment.
Most workers – whether part-time or full-time – are legally entitled to 5.6 weeks of paid annual leave. Additional annual leave may be agreed as part of a worker’s contract. A week of leave should allow workers to be away from work for a week – i.e. it should be the same amount of time as the working week. If a worker does a five-day week, he or she is entitled to 28 days leave. If he or she does a three-day week, the entitlement is 16.8 days leave. Employers can set the times that workers take their leave, for example for a Christmas shutdown. If a worker’s employment ends, he or she has a right to be paid for the leave time due and not taken.
Public holidays
There is no legal right to paid leave for public holidays; any rights to paid time off for these holidays depends on the terms of a worker’s contract. Paid public holidays can be counted as part of the statutory 5.6 weeks of holiday.
How much notice should be given when requesting leave?
Employers and employees can agree how and when to give notice of when leave is to be take. But in the absence of any agreement the notice period should be at least twice the period of leave to be taken.
Can an employer refuse leave?
Restrictions on taking holidays may be stated in the contract of employment, implied from custom or practice, or incorporated into individual contracts from a collective agreement.
Employers may choose to:
- Shut down for certain periods where workers have to use their annual entitlement;
- Nominate particular dates as days of closure when workers are expected to take annual leave;
- Determine the maximum amounts of leave that can be taken on any one occasion and also the periods when leave may be taken;
- Determine the number of workers who can be off at any one time.
How do you calculate holiday pay for workers with no normal working hours?
If a worker has no normal working hours then a week’s pay is the average pay received over the preceding 12 weeks. Any weeks for which no pay was due should be replaced by the least previous week for which pay was due.
