Employment Rights Act 1996

The Employment Rights Act (ERA) 1996 updates much earlier labour law, including the Contracts of Employment Act 1963, the Redundancy Payments Act 1965, the Employment Protection Act 1975 and the Wages Act 1986. It applies across the whole of the United Kingdom.

This article summarises the key provisions of the Act.

The ERA set out the rights of employees in situations such as dismissal, unfair dismissal, parental leave, and redundancy. In 1997, the Labour government proposed an amendment to the act – strengthening the right of an employee to request flexible working time – which was subsequently passed by Parliament.

Employee's may have been given these rights previously contractually, either within business' employment policies or within employment contracts of service. The Act now enshrines those rights in statutory law.

Important rights given to employees or strengthened by the ERA include:

The right to be given employment particulars

Section 1 (2) of the ERA 1996 states that the main terms between the employee and employer must be recorded in writing and given to the employee within two months of starting employment.

The document might be an employment contract, or a shorter “written statement of particulars”. Signing creates an enforceable contract between the employee and the employer. A statement may also tell the employee their statutory employment rights.

Disclosures and detriment

Under the ERA 1996, an employee may not disclose any company’s confidential or private information to a third party.

Sundays, time off and suspension

An employee has a right to receive paid leave for public duties and responsibilities such as jury service.

Dismissal: notice and reason

Under Section 86 of the Act, “reasonable notice” has to be given before the termination of the contract. That applies to both the employee and the employer.

The duration of a reasonable notice period depends on the employment duration of the employee. If the employee has worked for more than one month then a minimum notice period of one week should be issued in case of dismissal. After 2 years of service, the duration of a reasonable notice period increases to two weeks. After 3 years, the duration increases by another week to 3 and so on to a maximum of twelve week’s notice. However, the employer can also issue pay in lieu of notice, if this is mentioned in the employee’s contract of employment.

Unfair dismissal

Section 94 of the Act prevents the employer from unfairly dismissing the employee. An employer must specify the reason that resulted in the employee’s dismissal.

Dismissals related to the following are considered automatically unfair:

  • health and safety concerns
  • assertion of statutory rights
  • request for flexible working

Valid (fair) reasons mentioned in s. 98(2) to dismiss an employee are as follows:

(a) relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do

(b) relates to the conduct of the employee

(ba) is retirement of the employee

(c) is that the employee was redundant, or

(d) is that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or under an enactment.

Additionally, the employer has the right to dismiss the employee under s98 (1) for some other substantial reason.

Redundancy payments

Section 135 of the Act gives an employee a right to compensation if his or her job becomes obsolete – provided he or she has worked under the employer for a specified duration to become an established employee.

To qualify for the redundancy payment, the employee must have had a working relationship with the same employer for two years (s 155). Employees who have reached retirement age are not entitled to redundancy payments (s 156). The employer can avoid paying the employee compensation by dismissing him or her for a different reason, such as misconduct or capability, as mentioned above.

Redundancy payments are calculated using the length of the service and the age of the employee.  If the employee is under 21 years old, half a week’s pay will be given for each year. If employee is between the age of 21 and 40, one week’s pay will be given for each year. If the employee is over 40, one and a half week’s pay will be given for each year. The upper limit of the redundancy payment is set almost equally to the National Minimum Wage per week.

Employer insolvency

Section 182 gives protection to the employee in the case that the employer has become bankrupt and there is no money remaining to pay him or her. If it is established that the employer has become insolvent, the Secretary of State will compensate the employee out of a National Insurance Fund on behalf of the government.

Please note that the information provided on this page:

  • Does not provide a complete or authoritative statement of the law;
  • Does not constitute legal advice by Net Lawman;
  • Does not create a contractual relationship;
  • Does not form part of any other advice, whether paid or free.
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