Written Statement of Terms and Conditions of Employment

An employer is under a legal obligation to provide an employee with written particulars of terms and conditions of employment no later than two months after they start their employment.

If no terms and conditions are issued it is possible for an employee to make an application to an Employment Tribunal who can then determine what particulars ought to have been included.  Practically speaking, the main disadvantage if there is no written contract of employment is that issues of dispute can arise if the terms of employment are not sufficiently clear. However, it is also possible for compensation to be awarded to an employee who has not been provided with terms and conditions of employment in certain circumstances.

Unfair Dismissal

Very broadly, all employees with the relevant qualifying service have the right to raise a claim for unfair dismissal. On 6 April 2012 the period of qualifying service increased from one to two years’ service. Employees employed before 6 April 2012 continue to gain the protection of the unfair dismissal legislation after one year’s service. However, those commencing employment on or after 6 April 2012 require two years’ service before acquiring a right not to be unfairly dismissed.

Please note:

  • The maximum unfair dismissal award is £85,200 (a basic award of £12,900 and a compensatory award of £72,300).
  • The median unfair dismissal award is considerably lower than this and is in the region of £5,000.
  • The amount a Tribunal will award for unfair dismissal will depend almost entirely on the employee's salary and benefits at the date they were dismissed and how quickly an employee is able to obtain alternative comparable employment, as a Tribunal will compensate the individual for their loss rather than making any punitive award against the employer.
  • In certain specific circumstances, there is no limit on the amount that a Tribunal can award.  These circumstances include dismissal for health and safety reasons or dismissal following the employee making a protected disclosure (whistleblowing).  In addition, there is no limit on the amount that can be awarded where the dismissal is related to unlawful discrimination (i.e. discrimination on the grounds of sex, race, disability, age, marriage and civil partnership, sexual orientation, gender reassignment, pregnancy and maternity and religion or belief).
  • If an employee wishes to raise a claim for unfair dismissal then they must do so within three months of their employment terminating.
  • It is also possible for an employee to raise a claim for constructive unfair dismissal.  This is a situation where the employer has materially breached the employee's contract of employment in such a way that the employee is entitled to resign and treat themselves as having been dismissed.   

In order to terminate employment fairly the dismissal must be for one of the following grounds:

  • Conduct.
  • Capability (including competence to do the job and ill-health).
  • Redundancy.
  • Contravention of a statutory enactment.
  • Some other substantial reason.  

In order to dismiss an employee fairly a fair procedure is essential. Employers are advised to seek guidance prior to proceeding in order to minimise the risk of a claim being made or, if a claim is made, to be in a stronger position to defend it.

  • With regard to capability issues, generally speaking, a series of warnings should be issued (with a process at each stage which is compliant with the ACAS code – see below - being followed) over a period of time advising the employee of the particular shortfalls in their performance and any improvements required.  
  • Similarly, with regard to conduct which does not amount to gross misconduct, again, a series of warnings should be issued. Again, the process at each stage should be compliant with the ACAS code. 
  • If the conduct is sufficiently serious then an employee could be dismissed for gross misconduct without any previous informal or formal warnings.  However, in such circumstances, it is still essential that a proper procedure (compliant with the ACAS Code) is followed which will often involve suspending the employee at the outset whilst a full investigation is carried out. Once the employee has been suspended they would then be invited to a disciplinary hearing but, again, employers are advised to seek advice should such a situation ever arise.  

Employees With Less Than The Relevant Qualifying Service

As noted above, employees commencing employment on or after 6 April 2012 now require two years’ service prior to gaining protection under the unfair dismissal legislation. All other employees acquire unfair dismissal rights once they have gained one year's service.  There are a number of exceptions to this qualifying service requirement. These exceptions include (but are not limited to) the situations outlined above where no limit applies on the amount of award that a Tribunal can make.  However, in most cases, provided there is no discriminatory reason underpinning the decision, it will very often be possible to dismiss an employee with less than the relevant qualifying service without any significant procedure being followed. Having said that, employers should still, as far as possible, take into account the procedural recommendations in the ACAS Code of Disciplinary and Grievance Procedures (see below) in most cases.

As a risk management tool, employers should have a diary system in place to review the employment relationship with any new employees at both the six month and the nine month point (where the relevant qualifying period is still one year) and perhaps the six month, twelve months and eighteen month marks (where the relevant qualifying period is two years).  Probationary periods can also be useful to monitor a new employee’s performance and consider timely termination of the employment relationship during or at the end of the probationary period. Another option is to extend the probationary period for a further three months or such other period with a view to flagging up to the employee that all is not well.

ACAS Code of Practice on Disciplinary and Grievance Procedures

The ACAS Code of Practice on Disciplinary and Grievance Procedures is not a statutory code but provides a guide for “expected” practice which employers should follow. This code can be referred to in Tribunal proceedings and the Tribunal has power to award an increase of up to 25% on any compensatory award made for the employer’s unreasonable failure to follow the ACAS Code. The Code can be found and downloaded from the ACAS website: www.acas.org.uk


As indicated above, it is unlawful to discriminate against an employee on the basis of age, sex, race, disability, marriage and civil partnership, sexual orientation, gender reassignment, pregnancy and maternity, and religion or belief.  In addition, under the Equality Act 2010 it is unlawful to offer different and less favourable pay and conditions where women and men are doing the equal work (i.e. like work or work rated as equivalent or work of equal value).

It is also unlawful to discriminate against someone on the basis that they work part‑time or on the basis that they have a fixed‑term contract.

Employers should have an Equal Opportunities Policy in place. This can be of assistance in the event that an employer requires to defend a discrimination-based claim. Managers and employees should also be provided with relevant training in respect of the policy. Again, this can be of assistance in the event that a discrimination claim is raised.

Working Time Regulations

The Working Time Regulations 1998 apply to all "workers" which includes employees.  The main features of the Regulations are as follows:-

  • The employer must take all reasonable steps to ensure that the worker does not exceed the limit of an average of more than 48 hours per week over a reference period of normally 17 weeks.
  • Workers can opt out of the working time limit of 48 hours by signing an agreement.
  • Employers must keep a record of workers who have agreed to work longer hours.
  • Workers cannot be forced to sign an opt-out agreement and can cancel at any time by giving the notice as agreed between the employer and worker.
  • Employers are required to keep certain records regarding the working time of their employees.
  • Full time workers are entitled to 28 days’ paid annual leave per year (pro rata for part‑time workers).
  • The 28 day period includes any public and bank holidays, i.e. the entitlement under the Working Time Regulations is 28 days not 28 days plus statutory holidays.
  • Subject to specific rules for workers under 18, workers are entitled to a rest break of 20 minutes if they work more than six hours.
  • There is a right to have 24 hours off per week and at least 11 hours of uninterrupted rest each day.
  • There are certain specific rules regarding night‑time workers including the right to a free health assessment.  There are also more stringent rules in relation to the 48 hour working week and rest periods for night workers.   

National Minimum Wage

All workers are covered by the national minimum wage legislation.  The current minimum hourly rates are as follows:-

  • Standard adult rate for workers aged 21 and over: £6.08 (rising to £6.19 on 1 October 2012)
  • Development rate for workers aged 18-20 inclusive: £4.98 (will remain unchanged on 1 October 2012)
  • Young workers rate for 16 and 17 year olds: £3.68 (will remain unchanged on 1 October 2012)
  • Apprenticeship rate for apprentices under 19 years of age or those aged 19 and over but in the first year of their apprenticeship: £2.60 (rising to £2.65 on 1 October 2012)  

Sick Pay

Employers are required only to pay statutory sick pay (SSP) if the employee is absent because of sickness for a continuous period of four days or more. If the employee is absent for less than four consecutive days then they are not entitled to SSP. Employers must keep records of payments and absences in excess of four consecutive days. Employees may not claim SSP for more than 28 weeks in each period of sickness absence.

Most employees qualify for SSP. If the employee is not entitled to SSP then they may be able to claim incapacity benefit instead.  However, this claim is made via the Government and not via the company, albeit the company may be asked to provide certain information in respect of the employee's claim. Employers can claim back a proportion of any SSP paid from the Government.

It is possible for an employer to pay more than just SSP in the form of occupational or contractual sick pay. The specific sick pay terms would be set out in each employee’s contract of employment.


Employers with five or more employees must provide them with access to a stakeholder pension scheme. There is no obligation at present on employers to make any contribution to the scheme.

The law relating to pensions is changing this year, with the implementation of “auto-enrolment” on 1 October 2012 (see the Pensions Act 2008). Basically, all employers will be obliged to automatically enrol their eligible jobholders into a pension scheme. However, employers with less than 250 employees need not implement the changes until at least April 2014, and most of those with less than 50 employees need not do so until at least August 2015, but it is worth being aware of the various issues now. We have prepared a separate auto-enrolment factsheet which can be found on our website.

Family Friendly Leave

There are certain family friendly rights which employees enjoy. Very broadly, these are as follows:-

  1. Maternity Leave

Employees are entitled to six months' ordinary maternity leave (OML) and six months' additional maternity leave (AML).

OML is a period of 26 weeks' leave available to all employees, regardless of length of service, who give birth and comply with the notification conditions. AML follows immediately after the end of OML and lasts for a further 26 weeks, giving a total entitlement of 52 weeks' statutory maternity leave.

An employee will be entitled to statutory maternity pay (SMP) where she has:

  • 26 weeks' continuous employment with the employer up to and including the 15th week before the expected week of confinement (EWC); and
  • average earnings of at least the lower earnings limit for National Insurance during the eight-week period ending with the 15th week before EWC.  

If the employee satisfies the criteria above she will receive payment in respect of the initial 39 week period of maternity leave.  The first six weeks are paid at 90% of the usual rate of pay for the employee in question. Thereafter, for the remaining 33 weeks of the paid portion of maternity leave, only SMP is paid. The current SMP rate is £135.45.  The amount of maternity pay which can be recovered from the Government by the employer depends on the employer's National Insurance contributions in the appropriate tax year. However, at least 92% of SMP will be recoverable and, in many cases, 100%.

  1. Adoption Leave

Adoption leave operates in much the same way as maternity leave and in the event that the conditions are met, an employee adopting a child will benefit from Statutory Adoption Pay.  This is paid for 39 weeks.  Only one member of a couple adopting jointly can take statutory adoption leave.

  1. Paternity Leave

An employee who has a child born or expected to be born or placed for adoption and satisfies certain conditions is entitled to two weeks’ paternity leave.  This can be taken at any time up to eight weeks after the date of birth or placement for adoption.  In order to qualify for paternity leave, the employee must be the father of the child or be married to or civil partner of the mother or adopter of the child, or be his or her partner.  In addition, the employee must have or expect to have responsibility for the upbringing of the child.  The employee also requires to give notice to the employer and must have 26 weeks’ continuous employment ending with the 14th week before the EWC.  Paternity pay is paid at the same flat rate as SMP.

Employees may also be entitled to up to 26 weeks’ Additional Paternity Leave where the mother returns to work leaving unused any element of their statutory maternity leave. Any period of APL must be taken between 20 weeks and 12 months after the child's date of birth or placement for adoption.

  1. Parental Leave

Any employee who has completed one year's continuous employment and who "has, or expects to have responsibility, for a child" has a legally enforceable right to take up to four weeks unpaid parental leave per year while the child is under age five, subject to an overall maximum of 13 weeks leave in respect of each child. If disability living allowance is payable in respect of the child the age restriction is increased to age 18,  and the 13 weeks overall maximum is increased to 18 weeks.

  1. Other Rights

Eligible parents also have the right to request a flexible working arrangement. Employers have a duty to consider such requests seriously and there is a statutory procedure which must be followed if a formal request is made. In addition, employees have the right to time off (unpaid) to deal with certain domestic emergencies.

Health and Safety

Under the Health and Safety at Work etc Act 1974 certain obligations are placed on employers with regard to health and safety such as the general duty on employers 'so far as is reasonably practicable' to protect the health, safety and welfare at work of all employees.  In addition, employers must provide safe plant and systems of work, safe methods for the use, handling, storage and transport of articles and substances, necessary information, instruction, training and supervision, a safe and well-maintained workplace, including safe access and egress and a safe working environment with adequate welfare facilities. In addition to its own employees, an employer owes statutory duties to:-

  • other people's employees working on the employer's premises; and
  • members of the public who are affected by the activities of the employer.

Section 7 of the Health and Safety at Work etc Act 1974 also places a duty on employees to take reasonable care of their own health and safety, and that of anyone who could be adversely affected by their 'acts or omissions at work' and to co-operate with their employer in taking steps to meet legal requirements.  Therefore where reasonable care has not been taken by the employee and the employer has done everything in his power 'so far as reasonably practicable' to comply with the various obligations placed on him, the employer may not be liable for the breach.

Under the Management of Health and Safety at Work Regulations 1999 the employer should appoint one or more persons he believes are competent to assist him in carrying out his health and safety obligations.  It is for the employer to decide on the person suitable for the post and therefore whether they are competent.  Factors to be considered in judging competency are whether they have sufficient training and experience or knowledge and other qualities to enable them properly to assist in undertaking the necessary measures.  The employer will still be ultimately responsible for health and safety – the fact that they have appointed people to assist will not absolve them from responsibility.

There are more detailed Regulations setting out specific health and safety requirements for employers relating to:-

  • assessing risks to health and safety at work;
  • devising a written health and safety policy where there are five or more employees (where there are fewer than five employees appropriate measures still require to be taken but there is no need to commit this to writing);
  • providing employees with adequate first aid facilities;
  • notifying employees of general matters under health and safety law.  

Any breach of these obligations will result in the employer being held liable. Liability can be both civil and criminal. Responsible managers and officers of the company may be personally liable in addition to the company. Employers are obliged to maintain insurance against liability for bodily injury or disease sustained by employees arising out of or sustained in the course of their employment in the UK. The insurance must be taken out under one or more approved policies with authorised insurers.

Over and above the legislation already referred to there are a vast number of more detailed regulations that target specific work related hazards including safety of the workplace and work equipment, fire hazards and lifting or other strenuous activities to name but a few.

The Health and Safety Executive enforce compliance with the regulations but they also produce a lot of helpful information for employers that can be accessed on their website www.hse.gov.uk. For employers working in low risk environments the HSE have an area of their website dedicated to making health and safety simple.  That information can be accessed here.

Payroll and Taxation

It is necessary to register with HM Revenue & Customs (HMRC) for employee income tax and national insurance purposes. Before an employer registers with HMRC it is necessary to gather certain preliminary information which the employer will then need during the registration process (which in most cases can be done over the telephone or by email). The pieces of information required relate to general facts about the company (e.g. business name, address, nature of business), details about how many employees will be involved and information on where the payroll will be run from and the names, addresses and phone numbers of those looking after the payroll. With these items, employers can register with the HMRC who will then send all the information required to set up the payroll. More details can be found on HMRC’s website: www.hmrc.gov.uk.