Employment law and HR glossary
In 1975 the Advisory Conciliation and Arbitration Service (ACAS) was founded to help improve employment relations. An ACAS officer is appointed to all employment tribunal (ET) cases to ‘conciliate’, i.e. to act as an independent intermediary to facilitate settlement.
See Early Conciliation.
ACAS Code of Practice
The ACAS Code of Practice on Disciplinary and Grievance Procedures is not legally binding, but is designed to help employers, employees and representatives deal with disciplinary and grievance situations in the workplace. A failure to follow the Code will not in itself make an employer or employee liable, but an employment tribunal will take the contents of the Code into account in unfair dismissal cases when deciding whether a party acted reasonably.
The revised Code came into force on 11 March 2015 and replaces the previous Code issued in 2009. Employment tribunals have discretion to increase or reduce awards by up to 25% in certain cases where the employer or employee unreasonably fails to comply with the ACAS Code of Practice.
Additional Maternity Leave (AML)
Additional Maternity Leave (AML) follows immediately after the end of Ordinary Maternity Leave (OML) and lasts for up to a further 26 weeks, giving a total entitlement of 52 weeks' statutory maternity leave. All employees who qualify for OML will also qualify for AML.
See Ordinary Maternity Leave (OML).
This has two meanings:
1. A solemn non-religious promise to tell the truth in a court or Employment Tribunal in contrast to an oath (on a holy book of the particular religion);
2. An employee “affirms” his employment contract when he acts in a way that keeps the contract alive or in some way approves a change to it after the employer has committed a fundamental (serious) breach of contract. For example, the employer may unlawfully change the employee’s working hours. If the employee accepts them by working in accordance with them, he or she may be said to have affirmed the new contractual term. An employee’s affirmation of his or her contract after the employer has done wrong can deprive the employee of claim for constructive dismissal.
Agency workers are sometimes referred to as contingent workers and atypical workers.
An agency worker whose contract is with an employment agency (known as a “temporary work agency”) but who is supplied to work for a client of the agency may be an employee of either of them or of neither - he or she may simply not be an employee at all. It is also possible to be an employee of both, although that is unlikely in practice.
Agency Workers have a number of rights under the Agency Workers Regulations. These include the right:
· to be treated no less favourably than a comparable employee or worker of the hirer in relation to access to collective facilities and amenities;
· to be informed of any relevant vacancies in the hirer during the assignment in order to be given the same opportunity as a comparable worker to find permanent employment with the hirer; and
· to the same basic working and employment conditions as direct recruits of the hirer (after completion of the 12 week qualifying period) with regard to: (i) pay; (ii) working time; (iii) night work; (iv) rest periods and rest breaks; and (v) annual leave.
Associative discrimination occurs because of someone’s association with another third party that has one of the protected characteristics. An example may be denying the carer of a disabled person the same treatment as other workers on the grounds of the disability of the person for which they care.
Associative discrimination can now potentially arise in both direct discrimination and indirect discrimination cases.
The term can be used to describe anyone that does not work a standard full time week on an employer-employee basis. It can cover those on a fixed term contract, those that work part time, shift workers, casual workers, agency workers and consultants.
See Agency Worker.
The first of two elements of compensation payable to an employee found by an employment tribunal to have been unfairly dismissed. The basic award is designed to compensate an employee for loss of job security and is calculated in the same way as the statutory redundancy payment according to a formula based on the employee’s age, length of service and weekly pay (subject to a statutory limit).
See Unfair Dismissal and Compensatory Award.
Breach of Contract
Breaking or not complying with one of the agreed terms of a contract (of employment). A fundamental or repudiatory breach of contract is an extremely serious breach going to the heart of the employment relationship. If done by the employer, it may entitle a worker to resign and claim constructive dismissal. If done by the worker (e.g. gross misconduct), it may entitle the employer to dismiss without notice.
The collated documents which both parties to an employment tribunal claim have agreed which is used as part of the evidence to try key issues. The bundle is generally presented in lever arch files with numbered pages and an index.
This is the legal term for the employee in employment tribunal proceedings.
Discrimination is the concept that someone has been treated “less favourably” than others as a result of a particular characteristic that they possess. With minor exceptions, treating someone less favourably is unlawful where that characteristic is, for example, age, disability, race, sex, sexual orientation or religion. The central question is “less favourably than whom?” and this requires a comparator, who does not have the particular characteristic which is presumed to be a factor in the discrimination, enabling a comparison to be made. The comparator can be real or a hypothetical person.
The second element of compensation payable to an employee found to have been unfairly dismissed by an employment tribunal (along with basic award). The amount of the compensatory award will, subject to statutory limits, be such amount as the tribunal considers just and equitable in all the circumstances, having regard to the loss sustained by the employee because of the dismissal in so far as that loss is attributable to the employer’s action.
See Basic Award.
Compulsory Maternity Leave
All employees must take a minimum of two weeks' maternity leave starting with the day on which childbirth occurs. This is extended to four weeks for factory workers. An employer will be guilty of a criminal offence if it allows an employee to work during compulsory maternity leave.
See Additional Maternity Leave (AML) and Ordinary Maternity Leave (OML).
This occurs where an employee resigns in the face of a repudiatory breach of contract by their employer.
Conciliation, Conciliation Officer
Normally refers to the role of an ACAS (Advisory, Conciliation and Arbitration Service) officer once a case has started in liaising between the parties or their representatives off the record, usually on the telephone, to help encourage a settlement. ACAS now offers a conciliation service before the tribunal case has been lodged.
See Agency Worker.
This is often used to refer to workers employed on fixed-term contracts who may or may not have unfair dismissal rights, according to whether they meet the eligibility criteria.
The standard form on which an ACAS conciliation officer records an agreement to settle a claim. The first draft is usually produced by the respondent or their lawyers.
Default Retirement Age (DRA)
The government abolished the DRA on 6 April 2011. It was introduced in 2006 to apply in the absence of a normal retirement age established by the employer.
It enabled employers to dismiss an employee at or above retirement age, without committing unlawful age discrimination or an unfair dismissal.
A person has a disability if he or she has a physical or mental impairment, and the impairment has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities. An impairment will have a long-term effect if it has lasted, or is likely to last, at least 12 months.
A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others.
The Equality Act 2010 uses “because of” and extends direct discrimination to cover associative and perception discrimination.
See Associative discrimination and Perception discrimination
Treating people differently because of a protected characteristic.
Generally, a claim of discrimination must be presented to an employment tribunal within 3 months of the date of the act complained of.
See Direct discrimination; Indirect Discrimination; Victimisation; Harassment; Protected Characteristic.
The claim form that a claimant must use to initiate a claim in an employment tribunal. The tribunal service will serve a copy of the ET1 on each named respondent.
A form produced by the employment tribunal service in which a respondent sets out their defence to a claim or claims brought against them in an employment tribunal.
A system of mandatory pre-claim conciliation that applies to most employment disputes, under which one of the parties (usually the prospective claimant) must contact ACAS before a claim can be issued in the employment tribunal, unless one of the limited exceptions applies. Participation in early conciliation will usually extend the limitation date to bring a claim in the tribunal.
An individual is an employee if they have entered into, works or worked under the terms of a contract of employment, whether such contract is expressly agreed (in writing or orally) or is implied by the nature of the relationship.
The terms "contract of service" and "contract for services" carry no statutory definition. Generally, under a contract of service a person agrees to serve another, whereas under a contract for services they agree to provide certain services to the other. This linguistic distinction has been used as one of many indicators of the status of employment.
There is no definitive test to determine the employment status of an individual. Note that HMRC will also consider a different list of factors to determine employment status to courts. However, the following list will give a general indication of whether an individual may be considered an employee (as opposed to a worker or a self-employed contractor):
· Personal service: an employee will do the work personally rather than contracting it out to anyone.
· Mutuality of obligation: the employer is obliged to offer work, and the employee is obliged to do as the employer requests.
· Right of control: an employer may control "what", "how", "where" and "when" work is done. However, senior employees may have more discretion.
· Right of substitution: rare for an employee to have the right to appoint a substitute.
· Financial risk: an employee will bear little risk, they will be paid for whatever work they do. Employees also benefit from the national minimum wage and statutory holiday.
· Part and parcel of the organisation: an employee will attend staff functions, is capable of being promoted, or manages other staff, will participate in the pension scheme.
· Right to terminate their contract: would normally have to provide notice under a specified contract term.
· Mutual intention: the intention of the parties should be stated in a contract of employment. However, this may not be persuasive if in reality the parties behave differently.
Effective Date of Termination (EDT)
An employee’s period of continuous employment will end on the effective date of termination, which is normally the last day of employment (e.g. the date on which the employee’s notice expires), but may be a later date. It is very important that employees clarify the EDT as it will be relevant for calculating the time limit for bringing an unfair dismissal claim.
Economic, Technical or Organisational Reason (ETO)
Under TUPE, a dismissal for a reason connected with a transfer of a business will be automatically unfair unless the employer can show that the dismissal took place for an economic, technical or organisational reason entailing changes in the workforce.
There is no statutory definition of an ETO reason.
A common ETO reason is redundancy. Harmonisation of terms and conditions across the workforce is not an ETO reason.
An individual elected or otherwise appointed to represent employees, for example, for the purposes of an information and consultation exercise during a collective redundancy or transfer of an undertaking subject to TUPE, or for the purposes of an information and consultation agreement.
No less favourable contractual terms and conditions of employment for men and women in the same employment when employed on like work (work of the same or broadly similar nature), work of equal value, or work rated as equivalent under a job evaluation study.
This has two meanings:
1. Expected Week of Childbirth - the week, measured from Sunday to Saturday, in which childbirth is expected to occur. It will be confirmed on a certificate (MAT B1) given to the employee by her doctor or midwife. Many of the employee's rights are calculated by reference to her EWC, regardless of whether birth in fact occurs earlier or later.
2. European Works Council – a consultative body set up by employers for the purposes of discharging the requirements for informing and consulting employees at European level, in undertakings or groups with at least 1,000 employees across the member states of the EEA and at least 150 employees in each of two or more of those member states.
Ex gratia Payment
A payment made (for example, by an employer to an employee) where there is no contractual requirement to do so. If an ex gratia payment is made on termination of employment, the first £30,000 is normally tax-free.
Further (and better) Particulars (FBPs)
A fancy way of saying additional information. Respondents in particular will ask for these in order to clarify the issues/facts from an unclear ET1.
Grievance, Grievance Procedure
Grievances are internal complaints made by workers to their employers. The grievance may concern the behaviour of a work colleague or manager. Employers should have their own grievance procedures for the bringing and investigation of such complaints.
This is a form of discrimination. In everyday non-legal use, the word describes verbal or physical abuse. The legal definition is wider.
A person (A) harasses another (B) if A engages in unwanted conduct (which may be of a sexual nature) related to a relevant protected characteristic, and the conduct has the purpose or effect of violating B's dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for B.
A also harasses B if A or another person engages in unwanted conduct of a sexual nature (or that is related to gender reassignment or sex), which has the purpose or effect of violating B's dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for B and because of B's rejection of or submission to the conduct, A treats B less favourably than A would treat B if B had not rejected or submitted to the conduct.
Where employees are made subject to a rule or treatment that on its face is neutral between different groups but which indirectly discriminates. For example, imposing the same minimum height requirement on all employees could disproportionately affect women who are generally not as tall as men and may therefore be discriminated against indirectly.
A person (A) indirectly discriminates against another (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of B's. A provision, criterion or practice is discriminatory in relation to a relevant protected characteristic of B's if
(a) A applies, or would apply, it to persons with whom B does not share the characteristic,
(b) it puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it,
(c) it puts, or would put, B at that disadvantage, and
(d) A cannot show it to be a proportionate means of achieving a legitimate aim.
Indirect discrimination does not apply to pregnancy and maternity.
The employment tribunal may adjudicate only on certain claims brought by certain workers. These are matters ‘within its jurisdiction’.
Last In First Out (LIFO)
A method of selecting employees for redundancy on the basis of their length of service, with those who have the least service being chosen first. LIFO was commonly used before the ban on age discrimination, but should be used with caution as it may lead to indirect age discrimination (as older workers will tend to have been employed for longer, so will be less likely to be caught by a LIFO policy).
Otherwise known as “wing members”, these are the representatives from each side of industry (i.e. HR and Trade Unions) who sit on employment tribunal hearings.
Liability Hearing; Hearing on Liability
A determination of the issue as to whether or not the worker wins his/her case, i.e. whether the employer is found ‘liable’ for unfair dismissal, discrimination etc. A liability hearing does not tend to determine what compensation or remedies the worker should receive.
An hourly rate set independently and updated annually, it is calculated according to the basic cost of living in the UK. Currently there are two rates, a UK rate and a London rate. The London rate is slightly higher to reflect the additional costs associated with living in London. The Living Wage should not be confused with the national living wage; it is set by the Living Wage Foundation and employers can choose to pay it on a voluntary basis.
See National Living Wage and National Minimum Wage.
National Living Wage (NLW)
A premium added on to the national minimum wage for the benefit of all workers aged 25 and over. It will take effect in April 2016. The initial rate will be set by the government. Thereafter, the NLW will form part of the remit of the independent Low Pay Commission which will make annual rate recommendations.
See Living Wage and National Minimum Wage.
National Minimum Wage (NMW)
A minimum hourly rate of pay set by government which applies, with some exceptions, to all workers. The employer is under the obligation to pay the NMW, and there are no exclusions for smaller employers.
See National Living Wage.
To establish objective justification, the employer must show that the material factor is a "proportionate means of achieving a legitimate aim". In particular, in relation to discrimination and equal pay matters, the employer must show that the material factor: (i) corresponds to a real need on the part of the employer; (ii) is an appropriate means of achieving the objective pursued; and (iii) is necessary to that end.
See Direct Discrimination and Indirect Discrimination.
Ordinary Maternity Leave (OML)
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. It applies only to "employees", whether they are full time or part-time, fixed-term or permanent, and is not available to the self-employed or those who come within the statutory definition of "worker".
See Additional Maternity Leave (AML).
Payment In Lieu of Notice (PILON)
Paying an employee a lump sum rather than requiring them to work out their statutory or contractual notice period. If there is no PILON clause in a contract of employment then an employer who pays an employee a lump sum salary payment instead of requiring them to work their period of notice will technically be in breach of contract but the employee will usually have suffered no loss. However, this breach of contract will mean that any post-contractual restrictions (such as non-competition or non-solicitation clauses) will not be enforceable.
Treating someone less favourably because they are mistakenly believed to possess a particular characteristic. An example might be subjecting someone to verbal abuse because they are mistakenly believed to be gay.
Pleadings; to Plead
Pleadings are the documents which set out each party’s case, i.e. the ET1, ET3, FBPs and any additional information. To plead something is to put it into any of these documents.
An interim employment tribunal hearing that takes place before a substantive hearing to decide case management and preliminary issues (such as whether the claim was brought in time). They are also used to consider whether a party's case has any reasonable prospect of success, and if not, whether it should be struck out, or whether the party should have to pay a deposit to continue with it.
Under current legislation, there are nine protected characteristics: age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion or belief; sex; and sexual orientation.
It is unlawful to discriminate or harass another because of a protected characteristic.
A disclosure that complies with the requirements of the whistleblowing legislation is considered a “Protected Disclosure”. A disclosure must meet two requirements to be protected.
To be protected as a whistleblower a disclosure must first be a ‘qualifying disclosure’ about malpractice. There are six distinct categories of malpractice. The employee must have a reasonable belief that the disclosure relates to one or more of the following types of malpractice which has taken place, is taking place, or is likely to take place:
· criminal offences
· failure to comply with a legal obligation
· miscarriages of justice
· threats to an individual’s health and safety
· damage to the environment
· a deliberate attempt to cover up any of the above
For a qualifying disclosure to be protected, an employee must make it to the right person and in the right way. The right person will be the employer, a legal adviser, a minister (where the employer is a public body) or a ‘prescribed person’.
Amongst other requirements, the employee must also reasonably believe that the disclosure is in the public interest.
Also referred to as a remedies hearing, this is a hearing which happens after the hearing on liability if the claimant wins their claim. The employment tribunal will decide how much compensation the respondent must pay the claimant.
A chart produced by BIS to work out redundancy payments and the basic award.
See Basic Award.
May be required where premises, working arrangements or the lack of auxiliary aids put a disabled person at a substantial disadvantage compared to others. Disability discrimination occurs where there is a failure to make a reasonable adjustment for a disabled person.
A situation in which an employer decides to reduce the number of its employees, either within the entire business, a particular site, business unit, function or job role.
Redundancy occurs when an employee’s dismissal is wholly or mainly attributable to the employer closing a business, closing a premise, eliminating the role or reducing the number of employees required to carry out a particular role.
There are two types of redundancy consultation procedure:
1. Collective redundancy (when 20 or more redundancy dismissals are proposed); and
2. Individual redundancy (when fewer than 20 redundancy dismissals are proposed).
An order by an employment tribunal that an employer re-employs a dismissed employee on the same terms of employment with no loss of continuity of employment.
See Re-engagement Order.
An order by an employment tribunal that an employer re-employs a dismissed employee on new terms with no loss of continuity of employment.
See Reinstatement Order.
A contract is said to be “repudiated” where an employer or an employee has breached it in a fundamental (serious) way. This enables employees to resign and claim constructive unfair dismissal.
Restrictive covenants/post termination restrictive covenants
There are broadly four types of restrictive covenant:
1. non-compete clauses – which seek to prevent an ex-employee from directly competing or working for a competitor, usually within a specific geographical area, for a set period following termination;
2. non-solicitation/non-dealing clauses – which seek to prevent an ex-employee from entering into working relationships with former customers, by seeking or accepting orders for goods and services, for a set period following termination;
3. non-poaching of employees – which seek to prevent an ex-employee from recruiting former colleagues for a set period following termination;
4. restrictions on the use of confidential information – which seek to prohibit the use of any confidential information (usually identified by a non-exhaustive list of examples) acquired by an employee during employment.
Generally, any contractual term which purports to restrict an individual's freedom to work for others or carry out his trade or business is void and unenforceable, unless the employer can show that it has a legitimate business interest that requires protection, and the protection sought is no more than is reasonable.
Legitimate business interests are commonly known to include:
· Trade secrets and confidential information.
· Trade or customer connections.
· Stability of the workforce.
A judgment is said to be “reserved” if it is not given at the end of a hearing but will instead be made available on another day.
This is the legal term for the employer in employment tribunal proceedings. In discrimination claims, claimants may sue individuals as well as a company, meaning that individuals may also be respondents to a claim.
The employer’s reply or defence, usually written on an ET3 form.
The age at which an employee retires in an organisation. As retirement can be direct discrimination because of age, mandatory retirement must be objectively justified.
See Direct Discrimination, Objective Justification.
An employment tribunal can review a decision it has made on a number of specific grounds. This is different from appealing to the EAT and has a shorter time limit.
An agreement that records the terms of the employee's departure, and the payments to be made, in return for a waiver of claims. A settlement agreement must meet a number of statutory requirements. The requirements are broadly that:
· The agreement must be in writing.
· The agreement must relate to particular proceedings.
· The employee/worker must have received advice on its effect on their ability to pursue their rights.
· The adviser must be identified.
· The agreement must state that “the conditions in section 203(3) of ERA 1996 have been complied with”.
· The adviser must also be covered by insurance, and be a qualified solicitor or barrister or an authorised trade union official, or authorised by a legal advice centre.
Shared Parental Leave
A scheme introduced which gives parents a new, more flexible way to take leave in the first year after the birth of a child or the placement of a child with them for adoption. It is available, subject to further eligibility criteria, where the child's expected week of childbirth starts on or after 5 April 2015, or the child is placed for adoption on or after that date.
Schedule of Loss; Schedule of Remedies and Loss
During the preparation of a case, the claimant is often ordered to prepare a schedule setting out how much she/he has lost by way of earnings and the value of the claim generally.
In the UK, there are very few legal requirements to have written policies. However, many employers will have a staff handbook as a matter of good practice. As a minimum, a staff handbook will usually contain details of the employer's disciplinary and grievance procedure, information about pensions and information about health and safety. Although not mandatory, it is highly advised to include policies on bribery, equal opportunities and discrimination, data protection and whistleblowing. Other policies that are often included are expenses, flexible working, dress code, "bring your own device" (BYOD), smoking, stress, sickness absence, substance misuse. career break, maternity/paternity, shared parental leave and redundancy.
Policies do not usually form part of the employee's contract, although it is a good idea to require staff to sign a declaration that they have been given a copy of the handbook.
See Our Services
Statutory Adoption Pay (SAP)
A benefit payable by employers to employees who are eligible for ordinary adoption leave and who earn at least the lower earnings limit. It is payable for up to 39 weeks at the same rate as the "prescribed rate" for statutory maternity pay (SMP), or at 90% of normal weekly earnings (the "earnings-related rate" for SMP) if lower. Unlike SMP, SAP is paid at the same rate for the full period. Employers can recover some or all of SAP from HMRC.
See Statutory Maternity Pay (SMP).
Statutory Maternity Pay (SMP)
A statutory benefit payable to a woman who takes maternity leave or stops working due to childbirth, provided she earns at least the lower earnings limit and has at least 26 weeks' continuous service at the end of the qualifying week, which is the 15th week before the expected week of childbirth (EWC), and is still employed during that week. SMP is payable at two rates: the "earnings-related rate" (90% of her average earnings) for the first six weeks, followed by the "prescribed rate" set by the government for the relevant tax year (or the earnings-related rate if lower). Total SMP entitlement lasts 39 weeks.
Immediate dismissal of an employee without notice. This will be a breach of contract by the employer, unless it is in response to a repudiatory breach of contract by the employee, for example, gross misconduct.
Abbreviation of “Transfer of Undertakings (Protection of Employment) Regulations 2006”. TUPE gives effect to EU law. If there is a relevant transfer of an undertaking or part of an undertaking, TUPE will transfer to the transferee any of the transferor's employees assigned to the undertaking (or part) transferred.
Employees with at least 2 years services have the right to not be dismissed unfairly. For a dismissal to be fair it must be for a potentially fair reason (capability, conduct, redundancy or some other substantial reason); the employer must follow a fair procedure; and the decision to dismiss must be within the range of reasonable responses open to an employer in the circumstances.
An employee has 3 months from the EDT to present their claim for unfair dismissal to the employment tribunal (subject to the amendment of time limits by early conciliation).
See Effective Date of Termination and Early Conciliation. For details of compensation payable, see also Basic Award and Compensatory Award.
This is a form of discrimination that involves treating an employee unfavourably because he or she has made a complaint of discrimination or helped another person to do so. For example, dismissing someone because they had previously complained of discrimination.
A person (A) victimises another person (B) if A subjects B to a detriment because B does a protected act, or A believes that B has done, or may do, “a protected act”.
The following are ”protected acts”: bringing proceedings under the Equality Act; giving evidence or information in connection with proceedings under the Equality Act; doing any other thing for the purposes of or in connection with the Equality Act; and making an allegation (whether or not express) that A or another person has contravened this Act.
See Protected Disclosure.
An order issued by an employment tribunal that a certain witness is required to attend a hearing. Failure to attend the tribunal when under a witness order is a criminal offence.
The definition is wider than the definition of employee.
It includes those who undertake to do or perform personally any work of services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.
Workers enjoy fewer rights than employees, but more than the genuinely self-employed.
The dismissal of an employee by an employer in breach of a contract of employment. A dismissal may be wrongful and unfair at the same time, or may just be wrongful/just unfair.
See Unfair Dismissal.