SEARCH, INDEX, UPDATES, CONTENTS, REGULATIONS, CONTRACT OF EMPLOYMENT
The Employment Act 2002 (Dispute Resolution) Regulations 2004 came into effect on 1 October 2004. Employers should have a standard 3 stage process for resolving disputes.
Stage 1 - An employer must put the reasons for any disciplinary action or dismissal in writing in broad terms to the employee. Similarly, an employee must put the reasons for any grievance in writing to the employer.
Stage 2 - A face to face meeting must take place between the employer and the employee. Both sides must have sufficient time to consider the facts and the other's complaint or position before the meeting. The employer must inform the employee of their decision, and of the employee's right to appeal.
Stage 3 - An appeal meeting must be held if requested, and can take place after sanctions have been imposed. The employer must inform the employee of the outcome of the appeal.
The government hope that the new procedure will reduce the number of claims before employment tribunals, currently about 100,000 claims per year, by about 30%. Employment Tribunals will adjust compensatory awards by a minimum of 10% and a maximum of 50% where there has been a failure by the employee or the employer to abide by these rules.
All employees should be made aware of these regulations. It is probably best to do this by including details in the Contract of Employment, or at least by including a reference to the details.
Although the law does not require the contract itself to be in writing, every employer is required to give each employee a written statement of certain terms in his/her contract within 2 months of starting employment.
We strongly advise that Contracts of Employment are drawn up by solicitors who understand employment law. These notes are an outline of matters which can be considered before taking such legal advice.
The names of the employer and the employee, the dates when employment and continuous employment began, the particulars of remuneration, hours and holidays, the job title or description, and the place of work must all be included in a single document. Other details may be given by reference to other documents which the employee has reasonable opportunity to read during the course of his employment.
An employee's period of continuous employment will take into account any employment with a previous employer (owner of the business) which counts towards employment and redundancy rights.
An employer cannot change an employee's contractual terms without his consent, but such consent may be implied by the employee continuing to work without protest for some time whilst being aware of the change. Any change to which an employee does not consent is a breach of contract. Where significant the employee may be entitled to resign and bring a claim for constructive dismissal.
Careful consideration should be given to the employee's right to Pay In Lieu Of Notice (PILON) and the consequent tax implications.
Some terms which may be agreed between the parties are automatically varied by statute law. Other terms may not be enforceable, typically a term which restricts the employee's freedom to work after he leaves employment. A term which is regarded as mainly to restrain competition will be unenforceable, however if it is mainly to protect the employers trade secrets, confidential information or the employers customer connection it may be enforceable.
A requirement to report and receive permission to accept any benefits in kind or supplier incentives is probably wise. The employer may have to report these for tax purposes and cannot prevent the acceptance of such bribes without this requirement.
The employer has an implied duty to take care of the employee's health and safety, and to give reasonable notice of termination when no specific notice has been agreed.
Other matters which should be included are -
An employer may not make deductions from any workers pay (except statutory deductions such as PAYE, NIC, etc.) unless the worker has previously signified agreement in writing to such deductions. You may wish to insert a clause that if the employee leaves, any outstanding loans may be recovered, or to recover part of the cost of any courses if the employee leaves within a certain period.
Further details are at www.dti.gov.uk/er/individual/statement-pl700.htm.
General regulatory guidance about employment legislation is at www.dti.gov.uk/er/regs.htm.
See also Employment Status, Working Time Regulations, PAYE, NIC, SSP, SMP, SPP, SAP, NMW, Student Loans.
Reminder - disclaimer applies. Please feedback your comments. This page was last modified 6 November 2004.