Contracts of employment

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Employment law – Contracts of employment

Does a Contract of Employment have to be in writing?

A contract of employment does not need to be in writing. It can be verbal or written.

An employee or worker is, however, entitled at the very least to a “written statement of particulars” of the terms of employment from the first working day. The written statement of particulars is not a contract as such, but sets out the essential elements of your employment (and so can still be legally binding. The core particulars which need to be included are:

  • your job title;
  • commencement of employment;
  • pay;
  • Specific days and hours of work (and if variable, sufficient details of how hours may vary);
  • holidays;
  • place of work;
  • details of all benefits;
  • details of any probationary period;
  • details of any training that is being provided.

A written statement does not need to include the following (although it does need to state where these can be found);

  • sick pay and procedures;
  • disciplinary process;
  • grievance procedure.

If no written statement of particulars has been provided the employee may apply to the Employment Tribunal who will determine what those particulars should be.

Can your employer change the terms of your employment contract?

It is difficult for an employer to change the terms of employment without your consent. Such consent may be verbal or in writing, or may even be implied from the fact that you continued to work on the new terms for a significant period of time whilst being aware of the change that has taken place.

In some contracts, your employer may have expressly reserved the right to unilaterally vary the terms of the contract. The courts have indicated that a strict and narrow approach should be taken in the interpretation of such provision. The contract should therefore provide the power to unilaterally alter the terms of the contract in clear and unambiguous words. As long as this is the case, your employer would then lay themselves open to a breach of contract claim if it sought to vary or introduce new terms which would affect your fundamental rights under your contract.

If your employer, for example, sought to reduce your pay or insisted that you took on an alternative job role or responsibilities that was not within the remit of your contract, this can give rise to a claim for constructive dismissal. Such a claim is only likely to be successful if you can show that the changes to your contract were significant and fundamental to your contract.

If you do not accept the new change of terms, your employer may decide to dismiss you and offer the employment again on completely new terms. There is a big risk here, however, because your employer would be laying itself open to a claim for breach of contract or unfair dismissal (especially where the correct procedure has not been followed).

There is, however, a flip side. You would be under a duty to mitigate your loss of earnings, and so whilst your employer may be initially in breach of contract, your refusal to accept a new contract may not entitle you to much in the way of damages if it is clear you have acted unreasonably.

When will there not be a break in the continuity of employment?

There will be no loss of continuity if you resign or are dismissed during one week but is re-engaged by the same employer before the end of the following week (ending on a Saturday).

Continuity will also not be broken where:

-you resign or are dismissed on grounds of ill health but then re-employed by the same employer within 26 weeks;
-you are absent from work because of a temporary cessation of work;
-the nature of your work (such as a seasonal worker or a supply teacher) means you are customarily absent from work at a particular time, but are regarded as continuing in the employer’s employment during this time;
-where you continue to be employed for the purpose of appealing against dismissal under a contractual disciplinary procedure, in the event that you are reinstated as a result of the appeal); and
-if you are reinstated or re-engaged by your former employer (or by a successor or associated employer) as a result of an ACAS resolution or a settlement agreement, or at the direction of an employment tribunal.

Can you stay and work under protest where the terms of your contract are changed?

Yes, this is possible. If you work under protest you can either:

  • work under the new terms, but make it clear to your employer (for example via the grievance process) that you do not agree to the change whilst making a claim for breach of contract. The court or tribunal will need to consider whether your employer is  in breach and may award you damages that you have suffered as a result of the breach of contract. Understandably, this is not a great position to be in (suing your employer whilst still working there!)
  • bring a claim for unlawful deduction from wages if the change results in a reduction in your wages. Again you must inform your employer that you do not agree to the changes or that you are agreeing under protest.

Are you entitled to be paid for overtime?

Overtime is usually those hours that are worked above the hours set out in your contract of employment. Overtime can be voluntary or compulsory. Compulsory overtime would form part of the terms and conditions of your employment.

There is no legal right to be paid extra for any overtime worked, unless this is set out in your contact, or by separate agreement. In many senior positions, it is not unusual to find a clause which says you “are expected to work an additional hours that is necessary for the proper performance of your duties”.

Are there examples of any breaches of contract by an employer, other than varying the terms of a contract of employment?

There is what is known as “mutual trust and confidence” between employee and employer implied into every contract of employment. An employer by its conduct may cause a number of breaches of this trust and confidence, which could give rise to a claim for constructive dismissal. These include:

  • Non-payment of salary or benefits;
  • Harassment/abuse of an employee;
  • Non-consultation with an employee over relocation.

What are my remedies for a breach of contract claim?

If your employer is in breach of contract, your can claim damages against your employer. You can do this whilst remaining in employment. Alternatively, if the breach is fundamental to your contractual rights, you may consider that you have effectively been dismissed and put in a claim for damages for wrongful dismissal. Alternatively, you may be entitled to resign and claim constructive dismissal.

Am I still entitled to be paid when my employer decided to close its business for a short period because of refurbishment, flooding or any other reason?

Unless there is a contractual right to ask you not to come into work or receive pay during this period, or you expressly consent to this, then you will be entitled to receive your normal pay for the period that you would have worked. If your employer fails to pay, then you are entitled to make a claim for unauthorised deductions from wages, or claim constructive dismissal (if you were to resign as a result of the non-payment) on the ground that there has been a fundamental breach of the contract of employment.

Even where your contract of employment contains an express contractual right for to impose a period of lay-off without pay, or if you consent to a this, you may be entitled to a statutory guarantee payment for any complete day of lay-off. Guarantee payments are limited to a maximum of 5 days’ payment in any three-month period. The amount of guarantee payment per day is based on the employee’s normal daily rate of pay, but subject to a statutory maximum. The present maximum is £30 a day, so it will amount to a maximum of £150 (5 days payment for the 3 month period). If you usually earn less than £30 a day, then the statutory payment will be your normal daily rate, and if you work part-time, your entitlement is worked out proportionally.

Can I still be paid if my employer sends me home, because there is not enough work?

Your employer may decide to ask you to stay at home or take unpaid leave if there’s not enough work for you or they are facing financial difficulties. You would still be entitled to receive your full pay and benefits, unless your contract of employment provided otherwise (or a union has negotiated a temporary change to your pay). Your employer would be in breach of contract if they laid you off without pay and the contract does not allow for this.

The guarantees rates of pay mentioned above, would also apply in these circumstances.

You are able to apply for redundancy and claim redundancy pay if you have been laid off for 4 weeks in a row or 6 weeks in a 13-week period, and there are specific processes and timelines for you to do so.

Can my employer force me to work from home indefinitely?

There may be many reasons why you do not want to work from home for long periods of time. This could be due to lack of space, disruptions, or simply a desire to separate work from your home life.

The starting point is that your employer has no general legal right to require you to work from home, if this is a departure from the norm. There are exceptions, however. If your employment contract contains a ‘mobility clause’ allowing your employer to change your place of work, then depending on the scope of the clause, this might give your employer the right to require you to work from home permanently.

For example, the clause might specifically state that your employer can require you to work from home, or it might be more general, stating that it can require you to work from any location in ‘the North-East of England’ or in a particular county. However, a mobility clause must still be ‘reasonably exercised’ by your employer , and must therefore be for sound business reasons.

If there is no mobility clause in your employment contract, then in order to change your terms and conditions, your employer would generally need to consult with you and seek your consent. If you are happy with the change and the support that your employer is putting in place, then you can accept it. However, if there is a good reason why you do not want to work from home indefinitely, then you have several options. Firstly, you can try and discuss the issue with your employer to see if you can resolve matters informally, and if this is not possible,  you could lodge a formal grievance. You could also refuse to accept the change your terms and work under protest, although this is often not wise as you may later be deemed to have accepted the change. 

If your employer insists that you comply with the change on you without your consent, then this could give rise to a claim for constructive dismissal. You would need to ensure that you do not remain working for your employer for too long if you want to resign and claim constructive dismissal. You could otherwise  be deemed to have accepted the change to your place of work due to the passage of time. However, you should always seek legal advice before you resign, as whether or not you have a claim for constructive dismissal will depend on your specific circumstances.

Finally, if your place of work closes down and everyone has been told to work from home as a result, then you could be in a redundancy situation if it is not possible for you to work from home.

Can I be forced to repay my training fees if I give notice to leave in breach of the training agreement?

The basic position is that employers are unable to recoup training costs from employees unless there is an express right to do so in the employment contract or the employee has consented in writing. This would need to be agreed before the training started. If there is an express written agreement, whether the employer can recoup training costs will depend on the wording of the clause and the specific circumstances of the case.

A training costs recovery clause will not be enforceable if it acts as a ‘penalty clause’. A penalty clause is one which imposes a disproportionate punishment on one party, i.e. it goes further than simply compensating your employer for genuine loss to the business caused by your early departure. For example, this might be the case if you resigned right at the end of the three year period but were still charged 100% of the training costs, despite the fact that your employer has already received substantial benefit from the training you have received.

It is also important to consider whether the clause acts in ‘restraint of trade’. This is the case where the true purpose of the clause is to prevent the employee working for a competitor, rather than to compensate the employer for genuine training costs when it is no longer receiving the benefit of the training through the employee’s work. It can, however, be very difficult to prove that such a clause is in restraint of trade.

A clause is also more likely to be unenforceable if it is disproportionate. This would apply, for example, if the period of time you have to stay to avoid repaying anything is disproportionately long compared to the importance and the cost of the training, or if there is no ‘sliding scale’ for repayment during that period. A sliding scale might involve having to pay back 100% of the training costs if you leave within a year, 60% if you leave within 2 years and 30% if you leave within 3 years. However, the enforceability of such a clause would still depend on the specific wording and the specific circumstances of your case.

What is the difference between an employee and a self-employed status?

You may have full protection under UK employment law, even though your relationship is expressed to be self employed or a consultancy.

In the first instance, you should always look behind the actual contractual documentation as it does not always reflect the reality of the relationship in practice. Just because a written agreement may state “consultancy” doesn’t meant that person will not have protection under employment law as an employee. Similarly, just because you may be registered as self- employed for tax reasons, the tribunals will look behind this and determine the true position.

The more a person is treated in the same way as an employee, the more likely it is that he will gain employee status. These include:

  • Whether you are paid through the payroll or on the production of invoices;
  • How uniform the payments are that you receive;
  • If your services are provided directly or through a limited company;
  • What amount of control you have over when and how you work;
  • If you are able to provide a substitute for any periods that you are unable to work;
  • Whether you are using your own equipment and tools, rather than being reliant on equipment from those who you are providing services too;
  • If you have a company email address, business cards, and are being “held out” as a full time permanent member of staff;
  • Whether you are receiving holiday and/or sick pay.
  • If there a mutuality of obligation- namely, for you to be provided with work by the other party, and then actually having to perform that work (rather than being able to turn it down).

This is a grey area and every case will be determined on its facts.

What is the National Minimum Wage?

The National Minimum Wage depends on how old you are. The rates are below, correct from 1 April 2024 are:

  • 21 and over: £11.44 (National Living Wage)
  • 18 to 20: £8.60

Successive renewal of fixed- term contracts.

Under Regulation 8 of the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, if you have been employed on successive fixed term contracts for over four years, your employment will become permanent, and the continuous renewals will have no effect (unless they can be objectively justified).

Please click here to go to the Fixed- term contracts page for more information about your rights where you have this type of contract with your employer.

What are my rights if my job offer has been withdrawn?

It can be incredibly difficult if your new employer withdraws your job offer, particularly if you have already handed in your notice at your old job, leaving you without a new one to go to.

There are several reasons an employer might do this. It could be because of an unsatisfactory reference, or that they have decided to give the role to someone else, or because the business has experienced a downturn and no longer needs new staff.

Your rights when a job offer is withdrawn depend on what stage you are at in the process of joining the new employer. There are broadly three categories:

-the offer is withdrawn before you have accepted it;
-the offer is withdrawn after you have accepted it and the offer was unconditional or conditional but you had met all the conditions; and
-the offer is withdrawn after you have accepted it, but it was a conditional offer and you have not met all the conditions.

What are my rights if a job offer is withdrawn before I accept it?

An offer of employment does not become a legal contract until you have accepted it, so your prospective employer is within their rights to withdraw the offer at any time before you accept.

It is always advisable to accept a job offer (and ensure you have satisfied any conditions attached) before you hand in your notice at your current job.

What are my rights if an unconditional job offer is withdrawn after I accepted it, or a conditional job offer is withdrawn but I satisfy all the conditions?

Once you have accepted an unconditional offer of employment, there is a binding contract in existence, and the same goes for a conditional offer where you have satisfied all the conditions. If your prospective employer subsequently withdraws the offer, you may have a claim for breach of contract.

In most cases, however, any compensation you could potentially recover will be very limited. This is usually limited to the amount of notice pay you would have received if you had started the job and been dismissed. Given that many employees have very short notice periods at the outset (particularly during any probationary period), this might only amount to a week’s pay, for example.

If you don’t yet know what your notice period would have been, a court would decide what a ‘reasonable’ notice period would have been, taking into account the role you were hired for, your seniority and any industry norms.

In some exceptional cases, it might be possible to recover more compensation than just your notice pay. for example, if you work in a very senior or public role, where jobs are rare and the recruitment process takes a very long time, meaning that you will almost certainly be out of work for a significant period of time. In such cases, it may be possible to recover additional losses arising from the withdrawal of the contract, as long as your prospective employer knew (or should have known) that such losses were a likely consequence of the offer being withdrawn.

What are my rights if a conditional job offer is withdrawn because I didn’t satisfy all the conditions?

You should check the terms of your offer. If the original offer was unconditional, but it was withdrawn because of an unsatisfactory reference, then you may be able to claim a breach of contract. However, if the offer was conditional and you have not satisfied all the conditions, then realistically there is not a lot you can do. For example, if a job offer is conditional on a satisfactory reference, a clear DBS check, and/or having particular qualifications, then a failure to satisfy any of the conditions will be a valid reason to withdraw the offer.

If you think your job has been withdrawn because of discrimination, you will have a different type of claim, where compensation is uncapped. Please click here to skip to the discrimination page. 

Am I entitled to be paid for my travel time to work?

If you are working for an employer without a fixed or regular place of work, you could be entitled to more pay or a reduction in hours after a European Court of Justice ruling yesterday. The new ruling means that time spent travelling to and from first and last appointments by workers without a fixed office should be regarded as working time. This is mainly going to affect companies who employ staff whose primary duties are to carry out customer or client visits such as care workers, gas fitters, plumbers and sales representatives.

We can review your contract of employment to service agreement, and advise you on what it all means. We can offer a fixed price for this review. Please click here to access our contract review page.

For further advice and a free consultation, please get in contact on 020 7100 5256 and ask to speak to Philip Landau or any member of the employment team, or email us.

Click here for a fixed fee employment contract review

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