Employment Law FAQs

A few months ago my Company employed an individual whose standard of work is very poor. We wish to dismiss him, should we be worried he may claim unfair dismissal?

 
Generally speaking, no. Under normal circumstances an employee can only make a complaint of unfair dismissal to an Employment Tribunal if he/she has worked for that employer for at least one year.
 
However, in certain limited circumstances employees may make a complaint of unfair dismissal regardless of their length of service, including the following:
  • dismissal for Trade Union membership activities or for non-membership of a Trade Union;
  • dismissal on maternity related grounds;
  • dismissal for exercising a statutory employment protection right; and 
  • dismissal for proposing to take certain types of action on health and safety grounds.
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Regrettably, I have no option but to make one of my employees redundant, what will she be entitled to by way of a redundancy payment?

 
The amount of a statutory redundancy payment is worked out by reference to a formula that takes into account the employee's age, years of service and average weekly pay. Weekly pay is limited to a maximum of, currently, £350 per week and the maximum number of years that will be considered is 20.
 
The age of the employee is taken into account as follows:
  • Years of service between the age of 18 and 22, the employee's weekly pay is multiplied by 0.5
  • Years of service between the age of 22 and 41, the employee's weekly pay is multiplied by 1
  • Years of service from age 41 onwards, the employee's weekly pay is multiplied by 1.5
Therefore, the absolute maximum "statutory" redundancy payment is currently
 
20 years @ £350 x 1.5 = £10,500
 
It is important to remember that an employee must have two years of service in order to be eligible for statutory redundancy pay.
 
If your company typically pays "enhanced" redundancy payments (ie over and above statutory levels) your employee may also be entitled to an enhanced redundancy payment.
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Our Company recently decided to dismiss an employee and he has commenced unfair dismissal proceedings claiming compensation from us. What compensation could our Company be required to pay our ex-employee?

 
If successful, the compensation your Company will be liable to pay him will generally comprise of 2 awards - a basic award and a compensatory award. In some circumstances, an additional award may also be made.
 
The basic award generally speaking is calculated on a similar basis to a redundancy payment (see question 2 above).
The compensatory award will take into account the following factors:
  • loss of wages from the date of dismissal until the Tribunal hearing
  • future loss of wages - the Tribunal will estimate how long the ex-employee will remain out of work
  • loss of perks, for example, health care, company car etc
  • compensation for loss of employment protection, ie the dismissed employee will have to work for a period of one year to regain protection against unfair dismissal by his new employer (see question 1)
  • compensation for loss of pension rights
  • "credit" for certain "termination" payments made by the employer to the ex-employee
  • "credit" for the ex-employee's earnings since dismissal
The maximum compensatory award is currently £66,200. This maximum is usually increased each February.
 
The additional award - if the Tribunal orders your Company to re-engage or re-instate an ex-employee and you simply refuse, the Tribunal can then order further compensation.
 
This additional award is a minimum of 26 weeks pay and a maximum of 52 weeks pay, a week's pay being limited to a maximum, currently, of £350 per week. Accordingly, the additional award currently ranges between £9,100 and £18,200.
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Our Company dismissed an employee due to misconduct 8 months ago. Can the dismissed employee still take a claim against us for unfair dismissal?

 
Generally speaking a dismissed employee only has a period of 3 months from the date of dismissal to commence a claim for unfair dismissal.
 
The employee could attempt to obtain an extension to this 3 month limit. An extension will only be granted if an employment tribunal is satisfied that it was not reasonably practicable to commence the claim within the 3 months, for example, if the employee has been ill for a long period of time.
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What breaks and how much holiday are employees entitled to?

 
Generally speaking, employees are entitled to 4.8 weeks' annual leave in each leave year. This is equivalent to 24 days for a five day working week. From 1 April 2009 this will increase by a further 0.8 weeks to 5.6 weeks (28 days for a five day working week). However, workers cannot be entitled to more than 28 days' statutory leave as a result of the increases and both figures include bank holidays so that from 1 April 2009, the minimum entitlement for a full-time worker will be 20 days plus the 8 bank hoidays.
 
They are also entitled to:
  • a paid break during the working day if it exceeds 6 hours
  • a rest period between leaving work and starting work again of 11 hours
  • a period of 24 hours away from work every 7 days
  • work no more than 48 hours per week on average (unless he or she has signed valid "opt out" agreement)
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How much time off are parents entitled to, if any?

 
In addition to maternity leave for mothers, generally speaking each parent is entitled to take up to 4 weeks' parental leave in any year, with a total of 13 weeks leave, per child. The leave is currently unpaid and the employee will generally need to have been continuously employed for at least a year. The leave entitlement must be utilised before the child's 5th birthday, unless that child has a disability, in which case the leave may be taken before the child's 18th birthday.
  • the employee has to have been employed for at least a year
  • the parental leave must be taken by the child's 5th birthday
  • if the child has a disability the leave may be taken up until the child's 18th birthday
  • parental leave is currently unpaid
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What is the legal minimum rate of pay that can be paid to workers?

 
Most workers have the benefit of protection under the National Minimum Wage Regulations.
Currently the rates are:
  • £5.73 per hour for adult workers aged 22 and over
  • £4.77 per hour for workers aged between 18-22
  • £3.53 per hour for workers below 18
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Can the employee and the employer simply verbally agree terms of employment or is a written employment contract necessary?

 
Employees must be given, within two months of the date of commencement of employment, a written statement setting out the main particulars of the employment.
The written statement must cover various matters including the following:
  • Names of employer and employee
  • Date when the employment began
  • The hours of work and holiday entitlement
  • Remuneration
  • Sick leave
  • Pensions and pension scheme
  • Job title or brief job description, together with details of notice
  • Place of work
  • Disciplinary and dismissal rules and procedures
  • Grievance procedures
A contract of employment would usually contain these bare essentials but can, however, go much further than this. There are numerous provisions for example, that can be included that protect the employer. As such, although a written contract is not absolutely necessary, it is highly desirable. It should be as detailed as possible and tailored to your business in order that both employer and employee fully understand their obligations both during employment and where appropriate, after termination (see question 9).
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Our Company is worried that our key employees may leave and work for our main competitors or disclose our trade secrets to a future employer. Is there any way we can stop them doing so?

 
This is an extremely important consideration for most businesses and a very complex area of law.
 
Employers often seek to restrict what employees can do, as well as the use of confidential information, after termination of the employment. Such clauses, known as restrictive covenants, purport to restrict the employee from engaging in competitive activities or poaching customers or colleagues. For such covenants to be valid, however,  they have to be drafted carefully so as to be reasonable in terms of duration, scope and any geographical restrictions that are imposed.
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I employ a number of workers both part time and full time doing the same job. Am I required to pay both types of workers the same rate of pay?

 
Yes. Generally it is unlawful to pay a part timer at a lower rate than a full timer doing an identical job. In addition to the same rate of pay, part time workers should also receive, pro rata, other benefits that a comparable full timer enjoys, for example, holiday leave and bonuses.
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I am in the process of buying a business but I don't get on with one of the seller's employees. After I have bought the business can I simply sack him?

 
You could, but you might end up facing a costly and time-consuming employment tribunal claim.
 
The buyer of a business (as opposed to the buyer of shares in a company) must be aware of the obligations imposed by the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE").  Essentially, under TUPE employees who are employed by the seller at the time of the transfer automatically become the employees of the buyer on their current terms and conditions of employment.
 
If either the buyer or the seller dismisses an employee solely or mainly because of the transfer of the business the dismissal will be automatically unfair.
 
If ,however, it can be established that the main reason for the dismissal was for an economic, technical or organisational reason entailing changes in the work force, such as redundancy, the dismissal may be fair in the circumstances.
 
 
“I have just been asked by one of my employees about our company’s “family friendly” policies and when these will be updated to reflect the current law. Please help! I have no idea what she was referring to…”               
 
Certain changes to maternity-related rights were introduced in respect of women whose expected week of childbirth (EWC) (or date of adoption) falls on or after 1 April 2007. In short, they benefit from a more generous statutory maternity regime than previously existed, whereby:
 
  •  the period of statutory maternity pay (SMP), maternity allowance (MA) and statutory adoption pay (SAP) was increased from 26 weeks to 39 weeks; and
  • the qualifying period for the 6 month additional maternity leave (AML) entitlement was removed so all women are entitled to AML in addition to 6 months’ ordinary maternity leave (OML) (in contrast, where the EWC was before 1 April 2007, only employees with 26 weeks' service at the start of the 14th week before the EWC qualified for six months' AML).
 
Certain of the changes do purport to benefit employers, for example:
 
  • an employee has to give 8 weeks’ notice to their employer when returning early from AML (rather than 28 days’ notice);
  • "Keeping in Touch" days were introduced so that where both parties agree, those on maternity or adoption leave can return to work for up to 10 days during their leave without losing their right to leave or SMP / MA / SAP. Employees who undertake, consider undertaking, or refuse to undertake such work may not be dismissed or subjected to any detriment on those grounds. Employers are also now expressly entitled to make "reasonable contact" with employees while they are on maternity leave.
 
Another “family-friendly” right was expanded with effect from 6 April 2007. The statutory right to request flexible working was previously limited to employees with children under the age of 6 (or, in the case of a disabled child, under 18). Now, employees can request flexible working under the statutory procedure where they care or expect to be caring for an adult who:
  • is the employee’s spouse, partner or civil partner; or
  • is a 'near relative' of the employee; or
  • falls into neither category but lives at the same address as the employee.
The 'near relative' definition includes parents, parent-in-law, adult children, adopted adult children, siblings (including those who are in-laws), uncles, aunts or grandparents and step-relatives.                                                                    
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