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Members Newsletter May 2019

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Contracts of Employment

When a new employee is recruited it is important from the outset to have the terms of their employment clearly defined by issuing them with a contract of employment.

For the employee, a contract gives them the security that they are working for a professional business that has clearly defined its obligations and agreement on all terms of employment. For the employer, not only does this have its advantages from a commercial perspective (for example, the inclusion of restrictive covenants) but it will also have the added comfort knowing that the employee is fully aware of their contractual obligations such as hours of work, job title, notice period etc. This is particularly important in the event of a dispute.

Without having any written contract of employment in place, an employer will also be acting in breach of its statutory duties in accordance with s.1 of the Employment Rights Act 1996.

The law requires an employee to be given what is known as a “section 1 statement” of certain particulars of their employment within 2 months of starting employment. Whilst a section 1 statement is not necessarily a contract of employment in itself, it sets out the basic terms of employment which are ordinarily provided for in an employment contract. Therefore, if a contract of employment is provided at the outset and subject to it including the below information, an employer will have met its statutory duties.

For the purposes of a section 1 statement, the following key information must be included:-

  • Name of employer and employee
  • Date employment and continuous employment started
  • Job location
  • Pay and whether it's weekly, monthly etc
  • Working hours
  • Holiday entitlement
  • Job description / job title
  • Details of any collective agreement that directly affect the employee's conditions of employment

Where an employer fails to provide a section 1 statement, an employee may refer to a Tribunal to determine what terms ought to have been included or referred to in the statement.

Further, whilst there is no financial compensation for a stand-alone claim, under s.38 of the Employment Act 2002, where an employee brings a separate claim such as discrimination and is successful, a Tribunal can award up to an additional four weeks’ pay.

Promisingly, it was recently held in the Employment Appeal Tribunal case of Govdata Ltd –v- Denton [2019] that the Claimant’s employer had met the requirement in s1, albeit late. s38 allowed for any tribunal award to be increased, but only where the employer was in breach of their duty when proceedings commenced. Since late compliance was still compliance they were not in breach of their duty under s1. Accordingly, the Claimant’s award could not be increased. It is therefore not too late to ensure that compliance is met!

Linder Myers employment team has considerable experience in drafting contracts of employment and policies. To ensure that you are not acting in breach of any statutory duties, please do not hesitate to contact a member of the employment team on 0161 837 6844 and we’d be happy to help you.

Ask the Expert
Carley Dhand, Employment Law Specialist at Linder Myers Solicitors advises:-

“We recruited and offered a position to a candidate, however, as part of our pre employment checks we subsequently found that the candidate had made false statements on their CV. We no longer want to employ this candidate but they have signed a contract of employment. Can we withdraw the offer of employment?”

An employer may withdraw any offer of employment made but they need to be particularly careful when doing so as the candidate may argue that the reasons for withdrawing the offer are unlawful and as a result, they may bring an employment claim. Whilst most employment protection rights are only afforded to those who have at least 2 years’ continuous service, there are certain claims an employee can bring without ever being employed (i.e. discrimination).

If an employer finds themselves in a position that thy need to withdraw an offer of employment, for whatever reason, then they should document their reasons for withdrawing the offer. One example would be to document the management meeting in which the decision to withdraw the offer was made. Any associated documents such as the pre-employment checks and evidence used to come to the decision that the candidate made false statements should also be saved and stored securely.

Consideration also needs to be given as to the employee’s notice period under the terms of the contract. If you do not give the correct notice in accordance with its terms, the employee could pursue a claim for breach of contact.

Should you require any further information, please do not hesitate to contact us on 0161 837 6844 or via email [email protected]

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