Background to employment contracts
In law “contract” means the same as “agreement”. Apart from dealings in land and property, a verbal contract just as binding as a written contract. The problem is that it is usually very difficult to prove the terms of a verbal contract if the other person fails to keep his word.
For a contract to be binding, each side has to give something of value for it. This may be money, goods, a promise or anything worth money to the other of them. The value can be infinitely small. It follows that a promise to make a gift is not a contract.
An employment contract, as you would expect, regulates the relationship between employer and
employee. Parliament regulated the first employment contract long ago, but the modern law
started with the Redundancy Payments Act 1965, followed by the Employment protection Act
1975. The 1975 act set up the whole employment tribunal system as apart from the formal court
system. Most of the law regulating an employment contract is now contained in a whole raft of
legislation passed in the last ten years. Particulars or contract?
The Employment Act 2002 states that an employer must provide "particulars of employment" to an employee within four weeks of him / her starting work. This is to protect the employee only! It is not the same as a contract of employment. As an employer, you discharge your obligations by providing the particulars but you get nothing back in return. The reason why most employers use a "contract" is to obtain the agreement of the employee to comply with all the items contained in it that regulates the employment or protect the employer. Both employer and employee are bound by the terms offered and accepted.
Often the employment contract is verbally agreed and not written down. Even if there is no written employment contract, an oral contract of employment exists as soon as an employee starts work. The precise terms however, may be subject to a great deal of misunderstanding. However, the provision of particulars specified above, while providing little protection to an employer, do provide the basis of the employment contract. So, if there is no other written contract, those terms would be deemed to be evidence of a contract.
The remainder of this page deals with the law relating to particulars which an employer must provide. Click here for information and explanation of contract terms.
Certain of this information is taken from HM Government web sites. Crown copyright is acknowledged. Written statement of particulars
Who is entitled to receive a written statement?
All employees are entitled to receive a written statement of particulars, provided that their employment lasts for one month or more. (Those whose employment began before 30 November 1993 must however request such a statement before becoming entitled to it. They may make such a request at any time during their employment or up to three months after its termination.)
Individuals who are not employees - for example independent contractors or freelance agents - are not entitled to a statement. What information must the written statement include?
The written statement must cover:
- Names of the employer and the employee;
- Date when the employment (and the period of continuous employment) began;
- Remuneration and the intervals at which it is to be paid;
- Hours of work;
- Holiday entitlement;
- Entitlement to sick leave, including any entitlement to sick pay;
- Pensions and pension schemes;
- Entitlement of employer and employee to notice of termination;
- Job title or a brief job description;
- Where it is not permanent, the period for which the employment is expected to continue or, if it is for a fixed term, the date when it is to end.
- Either the place of work or, if the employee is required or allowed to work in more than one location, an indication of this and of the employer's address; and
- Details of the existence of any relevant collective agreements which directly affect the terms and conditions of the employee's employment - including, where the employer is not a party, the persons by whom they were made
If an employee is normally employed in the UK but will be required to work abroad for the same employer for a period of more than one month, the statement must also cover:
- The period for which the employment abroad is to last;
- Currency in which the employee is to be paid;
- Additional pay or benefits; and
- Terms relating to the employee's return to the UK.
Where there are no particulars to be given for one of the items required to be covered in the statement (for example, where there is no pension entitlement), this must be indicated.
The statement must also include a note giving certain details of the employer's disciplinary and grievance procedures, and stating whether or not a pensions contracting-out certificate is in force for the employment in question. Which of the required particulars may be given by reference to some other document, rather than in the written statement itself?
Most of the required particulars must be set out in the written statement itself. There are however a number of exceptions. Particulars of:
- Entitlement to sick leave, including any entitlement to sick pay;
- Pensions and pension schemes;
- Disciplinary rules; and
- Any further steps which follow from the making of an application under the employer's disciplinary or grievance procedures;
may be given by reference to some other document which the employee has reasonable opportunities of reading in the course of his or her employment or which is made reasonably accessible to him or her in some other way. It is for individual employers to make suitable arrangements to ensure that this requirement is complied with should they choose to make reference to some other document.
In addition, particulars of the entitlement of employer and employee to notice of termination may be given by reference to the provisions of the relevant legislation or to those of any relevant collective agreement which the employee has reasonable opportunities of reading in the course of his or her employment or which is made reasonably accessible to him or her in some other way. When must the written statement be given?
All the required particulars must be given within two months of the date when the employee's employment begins. In the case of an employee who leaves the UK within two months of the beginning of his or her employment to work abroad for a period of more than one month, the required particulars must be given to him or her before he or she leaves. It is not necessary, however, for all the information to be given at the same time. It can instead be given in separate documents or installments if this is more convenient, provided that certain particulars are collected together in one single installment, referred to in the legislation as the 'principal statement'.
The particulars, which must be included in the principal statement, are:
- Names of the employer and the employee;
- Date when the employment (and the period of continuous employment) began;
- Remuneration and the intervals at which it is to be paid;
- Hours of work;
- Holiday entitlement;
- Job title or a brief job description; and
- Either the place of work or, if the employee is required or allowed to work in more than one location, an indication of this and of the employer's address.
What must the note of disciplinary and grievance procedures contain?
The note must:
- Cover any disciplinary rules that apply to the employee;
- Specify, by description (for example job title) or by name, the person to whom the employee can apply and the manner in which an application should be made if he or she is dissatisfied with any disciplinary decision relating to him or her, or for the purpose of seeking redress of any grievance relating to his or her employment; and
- Any further steps that follow from the making of such an application.
Employers with fewer than twenty employees, however, need give only the name of the person to whom the employee can apply for the purpose of seeking redress of any grievance relating to his or her employment and the manner in which such an application should be made.
These requirements do not apply to rules, disciplinary decisions, grievances and procedures relating to health or safety at work.
The note must also state, in every case, whether or not a contracting-out certificate under the Pensions Schemes Act 1993 is in force for the employment in question.
What notification is an employee entitled to receive when a change occurs in one of the particulars of employment?
Employees who qualify for a written statement are also entitled to receive written notification whenever a change occurs in one of the particulars in that statement. This notification need not be a personalised letter but could take the form of, for example, a photocopied notice, provided that a copy is given to each of the affected employees individually.
The notification must be given at the earliest opportunity, and in any event within one month of when the change occurs.
In most cases the notification must contain explicit particulars of the change. There are however a number of exceptions.
Particulars of changes in may be given by reference to some other document which the employee has reasonable opportunities of reading in the course of his or her employment or which is made reasonably accessible to him or her in some other way. It is for individual employers to make suitable arrangements to ensure that this requirement is complied with, should they choose to make reference to some other document. Here is the list:
- Entitlement to sick leave, including any entitlement to sick pay;
- Pensions and pension schemes;
- Disciplinary rules; and
- Further steps, which follow from the making of an application under the employer's disciplinary or grievance procedures;
Note: the fact that employers are required to notify employees of changes to particulars in the written statement does not mean that they are entitled to vary contractually agreed terms and conditions of employment without employees' consent. Once terms and conditions of employment have been agreed, any changes should also be negotiated and agreed between employers and employees.
What information is an employee entitled to receive when there is a change of employer?
When a change of employer occurs, a new and full written statement of employment particulars must normally be issued to employees within two months of that change. There are however some exceptions.
If only the name changes without any change in the employer's identity, or if the identity changes in circumstances where the employee's continuity of employment is preserved (see below), then provided that there is no other change in terms and conditions a new statement is not required. The employees must however be given individual written notification of the change at the earliest opportunity, and in any event within one month of when it occurs.
Continuity of employment is preserved if:
- Undertaking or part of an undertaking is transferred from one employer to another;
- By an Act of Parliament one corporate body takes over from another as the employer;
- The employer dies and his or her personal representatives or trustees keep the employee on in employment;
- There is a change in the partners, personal representatives, or trustees who employ the employee;
- The employee moves from one employer to another where at the time of the move the two employers are associated employers - that is, where one is a company of which the other, either directly or indirectly, has control, or where both are companies of which a third party, either directly or indirectly, has control.
How can an employee enforce the rights described in this document?
A qualifying employee, who is dissatisfied because he or she has received no written statement of employment particulars, or no notification of a change in those particulars, may refer the matter to an employment tribunal.
If a written statement, or notification of a change, has been received by the employee but a question arises as to the accuracy or sufficiency of the particulars contained in it (or in another document to which it refers, in the limited circumstances where such reference is permitted), then either the employee or the employer may refer the matter to an employment tribunal.
In either case, the tribunal will determine what particulars the employee should have been given. The particulars decided on by the tribunal will have effect as if they had been included in a written statement, or notification of a change, issued by the employer.
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