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Terms and conditions

22 June 2005

Every employee will feel reassured by knowing his or her terms and conditions of employment. Likewise, an employer cannot insist on terms unless these are made clear. The law lays down obligations on both sides.

Do I have to set down terms and conditions in a statement? The written statement is not a full contract of employment.

There are other terms which can make up the full contractual relationship such as work rules, disciplinary rules, terms in collective agreements, verbal agreements etc.

There is no legal requirement for a contract of employment to be in writing.

However, there is a legal requirement to provide employees who have at least 1 month's service with a written statement of their main terms and conditions of employment no later than 2 months from the start of employment. The right to receive written particulars of employment applies to all eligible employees regardless of the number of hours they work. If the contractual terms are not made clear at the outset, the written particulars given later will not necessarily be fully effective. Accordingly employers should combine the contract and the written particulars at the very start with the offer of employment.

There is no requirement to provide written statements for employees who have been employed for less than 1 month.

When? All new employees should receive a statement within 2 months of their start date (existing employees who do not have a statement can request one which they must receive within 2 months of their request).

The statement may be given in instalments with the first 10 items set out below in one document with other documents setting out the rest. However, all the instalments must be provided within the 2-month period.

What should be included? 1. Names of the employer and the employee.
2. Date employment began.
3. Date continuous employment began.
4. Scale or rate of pay or the method of calculating it.
5. Pay interval e.g. weekly/monthly and a method of payment.
6. Terms and conditions relating to hours of work.
7. Job title.
8. Place of work.
9. Where the employment is temporary the period for which it is expected to continue or the exact date it will end.
10. Terms and conditions relating to holidays (including public holidays) holiday pay and entitlement to accrued holiday pay on leaving.
11. Any collective (union or workforce) agreements which directly affects terms and conditions.
12. Whether the employee is required to work outside UK and if so under what terms.
13. Terms relating to sickness or injury including sick pay.
14. Pensions.
15. Whether a contract out certificate is in force i.e. SERPS.
16. Disciplinary rules.
17. The person to whom the employee can appeal if dissatisfied with any disciplinary decision.
18. Any further step that can be taken after the first stage of appeal.
19. Any further steps after the first grievance.
20. Length of notice the employee is obliged to give.

Even where the heading is not relevant it should still be included in the written particulars, for example if there is no requirement to work abroad the statement should have a heading "Employment outside the UK" with a statement underneath saying that no details apply to this heading. Any essential terms other than those above should also be added. A recent European case suggested that any element essential to the contract had to be notified to the employee and failing to do so means that a tribunal may conclude that a lack of notification results in the terms being unenforceable.

Are there any restrictions on the conditions you can lay down? Generally no contract will be enforced if it is illegal or contrary to public policy.

A term will not be valid if it purports to contract out of the rights conferred in any of the following pieces of legislation:

• Sex Discrimination Act 1975, Race Relations Act 1976 or the Disability Discrimination Act 1995
• Equal Pay Act 1970
• Trade Union and Labour Relations (Consolidation) Act 1992
• Employment Rights Act 1996
• Transfer of Undertakings (Protection of Employment) Regulations 1981
• Working Time Regulations 1998
• The National Minimum Wage Act 1998
• Employment Act 2002
• Employment Equality (Religious Belief) Regulations 2003
• Employment Equality (Sexual Orientation) Regulations 2003

What happens if I don't provide a statement?
An eligible employee can make a complaint to an employment tribunal that an employer has failed to supply a written statement at any time while employment continues or within 3 months of leaving. However, if a tribunal feels that it was not reasonably practicable for a claim to have been made within the three month period, it may still allow the claim after 3 months has expired. The tribunal's role is limited to making a declaration about the terms and conditions that apply.

So will a tribunal award any compensation to the employee? From 1 October 2004 a tribunal has been able to award compensation to an employee bringing a successful claim to an employment tribunal when, at the time of bringing such a claim, the employer has not provided the employee with a written statement. The tribunal will award between 2 to 4 weeks' pay.

What if I want to change the written statement? The employer must inform the employee in writing of any change to any of the particulars as soon as possible no later than one month after the change. Changes to contractual terms raises other issues not considered in this article. Where the change results from the employee being asked to work outside the UK for a period of more than one month, the written statement containing details of the change of particulars must be given no later than the date on which he or she leaves the UK.

If the change is either the name of the employer in circumstances where the employee's continuity is not broken and the change does not involve a change in the written statement of particulars, then the new employer need only supply written details of the change of name and the date on which the employee's continuous employment began within a month of the change.

Jonathan Exten-Wright is a partner in the Employment Department of DLA Piper Rudnick Gray Cary UK LLP.
jonathan.exten-wright@dlapiper.com / www.dlapiper.com

Deepali Kidambi is a trainee in the Employment Department of DLA Piper Rudnick Gray Cary UK LLP.
deepali.kidambi@dlapiper.com / www.dlapiper.com

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