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Explanatory Notes
Contract of Employment
EXPLANATORY NOTES This contract is reasonably comprehensive for general purpose use, although it is not appropriate for a senior executive. As will be seen, there are many details to be inserted which, of course, will depend upon the nature of the employee's job, salary etc. We trust that the Agreement is sufficiently clearly written not to require very much by way of explanation. Employment law is a complex affair and changes in legislation, often designed to give greater protection to employees, are frequent. Advice from specialist lawyers on the efficacy of the Agreement, (and on particular clauses such as non-competition provisions) is strongly advised. This is a generic contract, not linked to English law.
EMPLOYMENT CONTRACTS:
Some notes on the position under English law.
When writing an employment contract it is necessary to take account of the relevant legislation. Every country has laws which are designed, to a greater or lesser extent, to protect the rights of employees. The European Union, of which the UK is a member, has developed a sophisticated and complex set of rules governing the rights of employees.
The UK legislation (Employment Rights Act 1996) requires every employer to issue to every employee within 2 months from the date he/she starts work a statement covering a number of items. This list contains the essential matters which any employment contract needs to deal with.
Here is an abbreviated list of those items:
• Name of Employer and of Employee
• The start date of the employment
• Job title & brief description of the job
• The remuneration (or the method of calculating it)
• Payment intervals – weekly, monthly etc.
• Terms & conditions relating to hours of work.
• Terms & conditions relating to holidays, including public holidays and holiday pay.
• Terms & conditions relating to sickness or other incapacity
• Any pension rights
• Notice periods
• The place of work
• Where the employment is not intended to be permanent, the planned duration or, if it is for a fixed term, the end date
• A note concerning the Employer's disciplinary procedure
There are also provisions that apply if the employee is to work outside the UK and in that case the period overseas, the currency of remuneration and any extra pay and/or benefits must be covered.
When the employer enters into a contract of employment with the employee covering these terms, that will avoid the need for any separate statement to be issued. The employment contract will usually cover some other matters as well. See our checklist below.
Statutory Rights of Employees
In addition to the statement of terms mentioned above, an employee has a variety of rights laid down by law which cannot be cancelled by the terms of any employment contract. A number of these rights – paternity leave, adoption leave and parental leave – are new and only came into effect in April 2003. The list below is by no means comprehensive but it does mention some of the more important rights.
The statutory rights include:
Itemised statement of pay. This must be issued when an employee is paid and it must show: gross remuneration, net pay, and all deductions and where the pay is made up in different ways, these must be shown.
Time off for public duties. Where an employee has any public duties – e.g if he is a trustee of a NHS hospital trust or a prison visitor. Similarly, if he is involved in trade union activities
Notice of termination. The minimum permitted notice periods are related to the length of service and are as follows:
None if this is less than a month
1 week if this is between 1 month and 2 years
2 weeks if this is between 2 and 3 years
Then an extra week for each full year of service up to a maximum of 12 weeks notice.
Sick pay An employee who is absent from work for more than 4 days consecutively is entitled to sickness benefit for up to 28 weeks at rates which are laid down by the Government. In practice employment contracts often provide expressly for the usual salary to continue for some time if an employee is off work due to sickness.
Maternity leave. Under current legislation, all female employees are entitled to ordinary maternity leave of 26 weeks. Employees who have accrued at least 6 months' service ending with the 15th week before childbirth are entitled to additional maternity leave of 26 weeks from the end of the period of ordinary maternity leave. During the period of ordinary maternity leave the employee is entitled to statutory maternity pay. The additional period will be unpaid.
Expectant mothers are also entitled to take time off to attend ante-natal classes, etc.
Paternity leave Since April 2003, an employee is entitled to take either one week's or two consecutive weeks' paid paternity leave to care for the child or support the child's mother if he satisfies certain requirements. He must be either the father of the child or married to or the partner of the child's mother and have responsibility for the upbringing of the child. In addition, he must have had at least 6 months' continuous service ending in the week before the 14th week before childbirth.
Adoption leave An employee who has been matched for adoption by an adoption agency and agreed to the adoption is entitled to take 26 weeks ordinary adoption leave. This must begin within 14 days of the placement of the child. In order to qualify, the employee must have had at least 26 weeks employment with the employer ending in the week in which the notification of the adoption agency was given. Statutory adoption pay is due during the period of ordinary adoption leave.
Employees are entitled to additional adoption leave of 26 weeks from the day after the last day of ordinary adoption leave. This will normally be unpaid.
Parental leave. An employee who has completed one or more years' continuous service with an employer is entitled to take 13 weeks' unpaid leave for the purposes of caring for a child at any time within 5 years of birth or adoption in respect of each child. The right of the employee to take parental leave applies to both mothers and fathers and to a person who has obtained formal parental responsibility for a child under the Children Act 1989.
Employees who take any of the statutory leave entitlements – maternity, adoption etc. are entitled to return to the same job at the end of the leave period or be offered a suitable job with no less favourable terms and conditions if that is not practicable.
Similarly, the employee has the right not to suffer any unfair treatment or be dismissed or selected for redundancy on any grounds related to their maternity etc.
National Minimum Wage
Every employer in the UK must pay his employees at least the national minimum wage. The standard rate is £4.20, but this can vary depending on age, apprenticeship and other such matters. More details can be found on www.tiger.gov.uk
Working Time Regulations
The Working Time Regulations stipulate an average 48-hr working week as a maximum which employees can be required to word. The average is calculated over a seventeen-week period. The regulations also contain provisions for minimum periods of break and for four weeks paid holiday in any year. Employees may be asked to contract out of some of these periods.
Discrimination
It is illegal for an employer to discriminate on grounds of sex, race, marital status, disability, or trade union membership. This applies both in the recruitment process and in the course of an individual's employment
There are some exceptions to the basic rules – e.g. where the individual's gender is an essential requirement for the job – e.g.a female model.
Part-time employees have the right to be treated no less favourably than full-time employees.
Unfair Dismissal
Every employee has the right not to be unfairly dismissed. It is important that employers establish proper procedures before dismissing an employee, with warning notices etc.
Unfair dismissal can result in a claim being made against the employer and the matter referred to an employment tribunal for determination.
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