#3648 - Written Terms - Labour Law

Written notification of terms

Stransky – no formalities attach to the formation of the contract of employment at common law.

Definition of the contract of employment for statutory purposes which makes clear that may be either express or implied and, if it is express, either oral or in writing (ERA 1996 s230(2)).

Legislation has superimposed a duty upon the employer to provide the employee with written information concerning particulars of employment, including certain terms of the contract and certain statutory rights.

The scope of the statutory written instrument

Right to written statement – aims to reduce the disputes over contract terms and the formalisation of procedures at the level of the individual company or establishment.

Scope of employer’s duty widened by IRA 1971 and EPA 1975 to include reference to job title and to disciplinary and grievance procedures.

TURERA 1993 implementing Directive 91/533 – designed to provide employees with improved protection against possible infringements of their rights and to create greater transparency on the labour market. Obligation to give details of collective agreements affecting the employment relationship. Right to invoke a reference document limited.

Information which must be contained in a single document

ERA 1996, s1 – employer must issue a written statement of particulars of employment as a single document containing basic information – names of parties, date on which employment began and date on which employee’s continuous employment began. Information about certain terms and particulars of employment: scale or rate of remuneration or methods of calculating it; intervals at which it is paid, hours of work and normal working hours, holidays, job title, employee’s place of work.

Information which may be contained in a separate document issued to the employee

Separate document – concerning the period for which contract is expected to continue or the date fixed for it to come to an end; any collective agreements which directly affect the terms and conditions of the employment including, where the employer is not a party, the persons by whom they were made; and where the employee is required to work outside the UK for more than one month, details of the time to be spent working abroad, the currency he will be paid in and terms and conditions relating to return.

Information which may be contained either in a written statement or in another reasonably accessible document

S6 – particulars relating to incapacity for work, occupational pension schemes and benefits; details of the length of notice which the employee is entitled to receive and which he is required to give may be provided by way of reference to the relevant law (ss86 – of ERA 1996) or to any relevant collective agreement which must be accessible to the employee- reasonable opportunity to read or made reasonably accessible.

Disciplinary and grievance procedures and contracting out certificates

Any such procedures must be specified to the employee in the written statement- disciplinary and grievance procedures. Disciplinary rules and procedures may alternatively be specified in another, reasonably accessible document (ERA 1996 s3).

Details of a person to whom an employee may apply to seek redress of a grievance must also be notified in writing s 3.

Timing of notification

The relevant information must be notified to all employees whose employment continues for one month or more, s198, and the statement must be issued within 2 months of the employment beginning s1.

All additional instalments must be issued within 2 month period.

Changes to the particulars

If there is a change to any of the relevant particulars, ERA 1996 s4 provides that the employer must issue a further written statement “at the earliest opportunity” and not later than one month after the change took place.

Statement need not detail the relevant changes nor lay out all the relevant particulars in full.

Statement may make reference to other documents.

Section 4 statement sufficient if the only change is to the name but not to the identity of the employer, or if the employer’s identity changes without the employee losing continuity of employment or any other relevant particulars being affected.

Remedies

Remedy for employer’s failure to comply with its obligations under section 1 is by way of reference to an employment tribunal under s 11 which may “amend those particulars, or substitute other particulars for them, as it may determine to be appropriate” (s12). The tribunal has no general power to award compensation to the employee.

Where the employee has been successful in relation to other specified statutory proceedings, between two and four weeks’ pay can be awarded for failure to provide an initial statement of particulars or to notify the employee of changes.

Limited normative effect of sections 1 - 4

Act requires the employer to notify the employee only of those particulars which have independent contractual force (in additional to the statutory rights to notice and continuity of employment which are also specifically mentioned) – Eagland.

It is conceivable that certain particulars could take the form of the work rules considered by the CoA in ASLEF (No 2) to be “in no way terms of the contract of employment”. Whether, if they did, this would affect the employer’s obligations under the Act is unclear. The answer is probably that as a matter of construction, any rules concerning the matters listed in ss 1 and 3 are presumed to be contractual in nature, unless the contrary is shown; and that, as such, they trigger the employer’s statutory obligations in respect of the written statement. In the unlikely event that it could be shown that certain rules of this kind did not have contractual force, no obligation of notification under the Act would arise (except to say that no relevant particulars existed); nor would it arise if there were neither contract terms nor particulars of any other kind.

S2(1) - implies that if there are no agreed terms (or other particulars) relating to a certain matter, there is nothing to notify to the employee, except the fact of their absence.

S3(1)(a) and (aa) – employer only required to notify the employee of any disciplinary rules and any procedure applicable to the taking of disciplinary decisions; again, if there are no such rules, or procedure, there is nothing on which the statute can bite.

S3(1)(b) – requires the employer to identity a person to whom a complaint may be made if the employee is dissatisfied with a disciplinary decisions relating to him and the name of a person to whom he may present a grievance.

= the two only cases where the Act clearly has an effect which is independent of the contract terms.

The Act does not prevent there being a zero hours contract of employment under which no fixed hours are laid down and employees are called in to work on demand by the employer; nor does the contract necessarily have to contain terms relating to holidays, incapacity, or to pension benefits.

=This absence of any general normative effect would seem at first to defeat the purpose of the Act: an employer can avoid the statutory obligation to formalise and record the contract terms by declining to agree to them in the first place. BUT this interpretation has been put beyond doubt by two decisions of the CoA.

Eagland – CoA held that a written statement which contained no reference to holiday pay, sick pay, pension entitlements and disciplinary rules was an accurate record of the employee’s contractual entitlements and had therefore not been issued in breach of s1.

Parker LJ – although an employment tribunal considering an application to amend the statutory statement would have the power to conclude that “because the contract turned out to be a contract of employment, it was a necessary legal incident of that contract that the ordinary requirement of such a relationship be included”, these requirements “do not include disciplinary rules, pension, sick pay or holiday pay and...they have no power to impose upon an employer any such terms if it be the fact...that either it had been argued that there should be no pension, sick pay or disciplinary rules, or the matter had not been agreed at all. The wording of the section makes it perfectly plain...that there may be no such terms and there is nothing in any section of the Act which empowers or requires the Tribunal to impose upon the parties terms which had not been agreed...”

Morley – CoA considered the requirement that particulars concerning holidays should be “sufficient to enable the employee’s entitlement, including any entitlement to accrued holiday pay on the termination of employment, to be precisely calculated”. It was held that this did not mean that a term providing for either holidays or holiday pay had to be implied: s1 “so far from requiring that a contract of employment must given entitlement to pay in lieu of holiday not taken, does no more than recognise that a contract can include such a provision” (Rose LJ).

Eagland – Parker LJ referred to a distinction between mandatory and non-mandatory terms of the contract of employment: “so far as mandatory terms are concerned...there may be a case where there is no provision as to the length of notice. In such as case the Tribunal would have power to conclude that there must be reasonable notice. It may also have power to decide the length of such notice, which would be a question of fact. But I do not consider that even in mandatory cases the tribunal have power to impose on parties terms which have not...