The Contract of Employment

Every employee has a contract of employment, which may or may not be in writing. It is important to remember that you may still be an employee working under a contract of employment even if nothing is written down. The fact that you have agreed to work and your employer has agreed to pay you is likely to constitute a contract of employment. If it is it not a contract of employment, it is likely to be a contract under which you have certain rights, for example to be paid for the work you do, and not to be discriminated against on grounds of sex, race or disability. If a dispute arises as to the rate of pay or entitlement to bonus, it will be more difficult for you to prove that your version is correct, but that does not detract from the fact that you have contractual rights. A contract will generally consist of terms and conditions, which may be identified in any of the following forms:

Written statement

Within two months of your starting work, your employer must provide you with a statement, in writing, of the particulars of your terms of employment. This is not in itself a contract, but can be used as evidence of contractual terms before an Employment Tribunal. The terms included in the statement must include:

  • The name of your employer.
  • The date your employment started and whether any previous employment is regarded as continuous with it.
  • The rate of pay or the method of calculating it and how often it is paid.
  • Hours of work.
  • Entitlement to holidays, holiday pay, sick pay, and whether or not a pension scheme exists.
  • The length of notice to terminate the employment contract which is required to be given by each side.
  • Job title.
  • If your employment is not intended to be continuous the period for which it is expected to continue, if it is for a fixed term the date on which it is to end.
  • Your place or places of work and whether you are required to work outside the United Kingdom.
  • Whether any collective agreements directly affect your terms and conditions of work.

These particulars must be given in a single document unless they refer to another accessible document for particulars of incapacity, sick pay or pensions, or notice requirements. Any disciplinary rules that apply to you must be specified, as well as the name of any person to whom you can apply if you have a grievance or are dissatisfied with any disciplinary action, and the procedure that you must follow. Details of disciplinary rules need only be given if your employer employs at least 20 people. Another accessible document, such as a Company Handbook that contains this information, may be referred to.

When the relevant part of the Employment Act 2002 comes into force (which is expected to be October 2004), a letter of engagement or a written contract of employment will be able to form all or part of the written statement of the main terms and conditions, provided it includes some or all of the particulars referred to above and is given to you either before your employment begins or within the first two months.

If you are not given a written statement, you can make a claim to an Employment Tribunal and if successful the Employment Tribunal will determine what particulars should have been given to you and what they should have said. When the Employment Act 2002 comes into force, it will also be possible in certain circumstances to get compensation where your employer has failed to provide you with a written statement of particulars, or has provided you with an inaccurate or incomplete one. The circumstances in which you will be able to get such compensation are when you make another sort of complaint to an Employment Tribunal, for example, a complaint of unfair dismissal, a claim for redundancy pay, a complaint of discrimination, and the Employment Tribunal finds in your favour. The Employment Tribunal can then award either two or four week’s pay in addition to any other award you are given because of your employer’s failure to provide you with a written statement of particulars. This is subject to a maximum of £270 per week for dismissals that occur after 1 February 2004.

As previously mentioned, the written statement provides strong evidence of what the agreed terms are, but does not in itself constitute the contract of employment - unless the necessary particulars are given in your contract of employment under the Employment Act 2002. As the written statement is just your employer’s account of what are the terms of your contract, you can challenge the terms in it if they are not those to which you agreed. Even if you have signed to acknowledge receipt of the statement, it is not itself a contract. However, it is best only to agree to sign that you have received the document and not that you accept its contents as being true, so that if you later want to challenge any of the contents you are free to do so. You must be notified of any changes to your terms and conditions not later than one month after such changes take effect. Again, you may be referred to an accessible document, which contains the information as to such changes. Only changes to which you, or your union on your behalf, have agreed are binding upon you. If your employer unilaterally attempts to impose a change on you, you are entitled to record that you do not agree to the change and hold your employer to the original agreement. Your employer may counter-attack by dismissing you and offering you a new contract with the new terms. If you claim unfair dismissal, the Employment Tribunal would have to decide whether the employer had good business reasons for the changes and whether in all the circumstances the dismissal was fair.

Collective agreements

Frequently, many of these terms and conditions will be determined by agreements negotiated by trade unions on your behalf. The fruits of the negotiations between unions and employers are usually incorporated into your contract of employment, since either your written statement or the custom and practice at your workplace (which is reasonable, certain and notorious) will generally say so. Collective agreements generally set terms and conditions such as wages, hours, holidays and sick pay and will also provide the machinery for the resolution of disputes, discipline and grievances.

Itemised pay statement

Every time you are paid, you are entitled to a written statement setting out the gross pay, any variable or fixed deductions, net pay and, if not all the pay is paid in the same way, the method of payment for each part, for example, where a bonus is paid less frequently than basic pay. If you have fixed deductions for each pay period, it is sufficient for your employer to give you a statement in advance of what the fixed deductions are, and they must reissue it at least annually. If you are not given an itemised pay slip, then you can make a claim to an Employment Tribunal.

Work rules

Your employer may publish on notice boards or in employee handbooks a set of works rules. These do not necessarily form part of your contract, so that if you break any of them you may not automatically be breaking your contract of employment. At most, they are your employer’s instructions about how the job is to be done and are not to be treated as rules cast in stone. They can be challenged if you make a claim to an Employment Tribunal arising out of, for example, your dismissal for breaking one.

Wages council orders and Agricultural Wages Boards

The Agricultural Wages Board sets minimum rates and rest days for agricultural workers. If agricultural workers are not paid the minimum rate wages, inspectors employed by the Department of Employment can prosecute the employer. A court can order the employer to pay a fine and to make payments of arrears of wages or repayment of deductions unlawfully made - for example, for accommodation. In addition, proceedings can be brought either by you or the wages inspector in the county courts.

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