The Employment Rights Act 1996 (c. 18) is an act of the Parliament of the United Kingdom passed by the Conservative government to codify existing law on individual rights in UK labour law.
History Previous statutes, dating from the Contracts of Employment Act 1963, included the Redundancy Payments Act 1965, the Employment Protection Act 1975, and the Wages Act 1986. It deals with rights that most employees can get when they work, including unfair dismissal, reasonable notice before dismissal, time off rights for parenting, redundancy and more. It was amended substantially by the Labour government since 1997, to include the right to request flexible working time. This coincides with the Rights at Work Act 1995.
Part I, Employment particulars An employee has an employment contract. ERA 1996 section 1(2) states, that the main terms of the contract must be in writing and provided to the employee within two months of the start of their employment. This document is called a "written statement of particulars". It confirms the main express terms of the employment contract. Whilst not definitive of the entire contract, the written statement is intended to be a guide for employees' of their rights, so that they know what kind of terms and conditions of employment to expect. But it is also meant to provide an evidential basis on which to bring a claim for the breach of some right in a court or employment tribunal.
Employers, in particular those in a small business environment, often make an error in believing that the "Written Statement of Particulars" – usually known as the terms and conditions of employment are "The Contract". The requirement in law therefore to produce the written express terms is often forgotten as they have the basis of a contract in place. Common practice is for a combined document "Contract of Employment" which provides the "Written Statement of Particulars" to be provided for the employee, which covers all the legal requirements.
Parts IVA and V, Disclosures and detriment
This part provides protection against "detriment" suffered because of disclosing information for public benefit. These measures were originally added by the Public Interest Disclosure Act 1998 and are intended to provide broad protection to employees to report criminal offences, failures to abide by legal obligations, miscarriages of justice, health and safety violations, or environmental damage (s43B). This does not give employees a right to commit a criminal offence in disclosing information, nor to breach the obligations of legally protected professional privilege (as might apply between a doctor and patient, or a lawyer and client).
Parts IV, VI and VII, Sundays, betting, time off and suspension
Paid time off work for public duties (e.g. jury duty), antenatal care, and training. (Part VI) Dismissal related to health and safety or asserting statutory rights and dismissal related to a request for flexible working are to be considered automatically unfair under the ERA.
Part IX, Dismissal notice and reasons
Employees have a right to reasonable notice before having their contracts terminated under section 86. At present this means everyone should get a minimum of one week's notice before being dismissed if they have worked for the employer for more than a month. After two years, the minimum is two weeks' notice. After three years, three weeks' notice, and so on, up to a maximum of twelve weeks' notice. Many employees will have higher notice periods in their contracts, or under the protection of collective agreements established by the workplace union. However nothing prevents employers giving pay in lieu of notice if it is expressly provided for in the employee's contract of employment, staff handbook, or other relevant documents. Both parties can also agree within that period to waive their rights.
Both this right and the right to written particulars of one's contract of employment were introduced through the Contracts of Employment Act 1963.
Part X, Unfair dismissal
Employees have a right under section 94 of the act not to be unfairly dismissed. This is probably the most important right, because it would usually be under an action after dismissal that a former employee would complain that his other rights were breached. Firstly, it is unusual to commence litigation against an employer while still working for them. Secondly, some rights such as the right to reasonable notice before dismissal (s.86) can logically only be breached when someone is dismissed.
The reasons laid out that an employer can dismiss are in s.98(2). Fair reasons to dismiss an employee are if it,
So there is no restriction on management's right to dismiss (for instance, giving reasonable notice) if the employee is (a) just bad at his job, (b) not a nice person to work with (c) is redundant (see below) or (d) the employer is forced to sack someone because of a law (this last one does not come up often). An important detail, however is that an employer may also dismiss, under s.98(1) for "some other substantial reason".
Most dismissals take place for legitimate business reasons, because the employer will no longer require staff, or maybe because times are bad and the employer can no longer afford to pay. There may be the possibility of claiming redundancy (see below). But employers will usually be happy to write a reference. If they do there is an obligation to be accurate and fair, and that means not providing a so-called "kiss of death" reference on to the next potential employer: if only bad things can be said, nothing should be said at all (see the case, Spring v Guardian Assurance plc).
Complaints to a tribunal The way to enforce a claim for unfair dismissal is at an employment tribunal. An employee who is dismissed may also have breach of contract claim(s), based on common law. Common law claim(s) may be brought in a county court. Employment tribunals are spread around the country, in most towns. The right to bring a case falls under Part X, Chapter 2, s.111.
The case of Beasley v National Grid Electricity Transmission upheld the argument that the time limit in section 111(2)(a) operates absolutely in circumstances where it is reasonably practicable to comply with it: applications which are slightly late in being presented (88 seconds in the case of Beasley's application) are nevertheless late and fall out of the jurisdiction of the tribunal.Beasley v. National Grid, Old Square Chambers, published 5 June 2008, accessed 25 September 2022
Settlement agreements The settlement agreement is a new concept which replaces the former "compromise agreement". Section 111A(2) of the ERA 1996 (as amended) provides for "pre-termination negotiations" that are: "any offers made or discussions held, before the termination of the employment in question, with a view to it being terminated on terms agreed between the employer and the employee".
The new provisions, which came into force on 29 July 2013, allow an employer to seek agreement with an employee for the latter's dismissal, thereby avoiding any risk of tribunal litigation for wrongful or unfair dismissal. The employee is invited to attend a meeting and may bring a companion (a fellow employee or a trade union officer). The employer, having discussed the issues, can make a written offer of termination, and the employee should be given 10 days to consider. The negotiations are confidential and "without prejudice". A Settlement Agreement is enforceable, but the employer is advised to have a "clawback" clause to allow recovery of any termination sums paid should evidence of misdeeds by the employee later arise. The discussions must observe ACAS Code of Practice 4 guidelines on settlement agreements; failure to comply may amount to "improper behaviour" by the employer, allowing the employee to renege on the agreement.
Part XI, Redundancy payments
Section 135 of the act gives employees a right to redundancy payments. This means when their jobs have become obsolete and employer should compensate them, provided they have become an established employee. The qualifying period for redundancy is having worked for two years with the same employer (s.155). Employees are not entitled to redundancy if they have simply reached retiring age (s.156). And nothing prevents the employer from making a dismissal for misconduct or capability, as outlined under the fairness provisions for dismissal (s.98).
The amount of redundancy is based on a length of service calculation and age. For each year an employee has worked while they were under 21 years old, the employee gets half a week's pay. For each year between ages 21 and 40, one week's pay. For each year over 40, one and a half week's pay (s.162). However, there is an upper limit set on what can be considered a week's pay, which is approximately the same as a week on the minimum wage (if an employee was made redundant on or before 31 January 2011, it was £380 per week – from 1 February 2011 to 31 January 2012, it was £400 – currently it is £508, before tax).
Part XII, Employer insolvency
This right, under section 182, to compensation for lost earnings is for when the employer goes broke. It applies in the unlucky cases where an employer has gone bankrupt or insolvent and there is no money left to pay the staff, who have outstanding pay cheques. The Secretary of State, on behalf of the government, guarantees pay up to a certain maximum, to replace what was lost.
Part XIII, Miscellaneous
Repealed enactments Section 242 of the act repealed 60 enactments and revoked 7 instruments, listed in parts I and II of schedule 3 to the act, respectively.