If you are an Employer you have also your rights and responsibilities.For correct management you need to know them both.



Employment Contract.

All employees have an employment contract with their employer. A contract is an agreement that sets out the compulsory 'terms' of the contract for parties:

•employment conditions




If a person has an agreement to do some work for someone (like paint their house), this isn't an employment contract but a 'contract to provide services'.

As soon as someone accepts a job offer they have a contract with their employer. An employment contract doesn't have to be written down.
The legal parts of a contract are known as 'terms'. An employer should make clear which parts of a contract are legally binding. Contract terms could be:
•in a written contract, or similar document like a written statement of employment
•verbally agreed
•in an employee handbook or on a company notice board
•in an offer letter from the employer
•required by law (eg an employer must pay employees at least the National Minimum Wage)
•in collective agreements - negotiated agreements between employers and trade unions or staff associations
•implied terms - automatically part of a contract even if they're not written down.

Implied terms.
Examples of an implied term include that employees not stealing from their employer; the employer providing a safe and secure working environment, a legal requirement like the right to a minimum of 5.6 weeks' paid holidays, something necessary to do the job like a driver having a valid licence, something that's been done regularly in a company over a long time like paying a Christmas bonus etc.
If there's nothing clearly agreed between you and your employer about a particular issue, it may be covered by an implied term.

Collective agreements
Parties may have a collective agreement. It is agreement between the employer and employees' representatives (from trade unions or staff associations) that allows negotiations of terms and conditions like pay or working hours. The terms of the agreement could include how negotiations will be organised; who will represent employees; which employees are covered by the agreement; which terms and conditions the agreement will cover.

Written statement of employment particulars.
An employer must give employees a 'written statement of employment particulars' if their employment contract lasts at least a month or more. This isn't an employment contract but will include the main conditions of employment.
The employer must provide the written statement within 2 months of the start of employment.
If an employee works abroad for more than a month during their first 2 months' employment, the employer must give them the written statement before they leave.
A written statement can be made up of more than one document (if the employer gives employees different sections of their statement at different times). If this does happen, one of the documents (called the 'principal statement') must include at least:
•the business's name
•the employee's name, job title or a description of work and start date
•if a previous job counts towards a period of continuous employment, the date the period started
•how much and how often an employee will get paid
•hours of work (and if employees will have to work Sundays, nights orovertime
•holiday entitlement (and if that includes public holidays)
•where an employee will be working and whether they might have torelocate
•if an employee works in different places, where these will be and what the employer's address is

As well as the principal statement, a written statement must also contain information about:
•how long a temporary job is expected to last
•the end date of a fixed-term contract
•notice periods
•collective agreements
•who to go to with a grievance
•how to complain about how a grievance is handled
•how to complain about a disciplinary or dismissal decision

The written statement doesn't need to cover sick pay and procedures, disciplinary and dismissal procedures and grievance procedures.

In Northern Ireland, a written statement must explain what the disciplinary rules and procedures are.

You can download a template of a written statement of particulars to fill out.

Written Statement

Working abroad

If an employee has to work abroad for more than a month, an employer must state in a separate document:
•how long they'll be abroad
•what currency they'll be paid in
•what additional pay or benefits they'll get
•terms relating to their return to the UK
If an employee has to work in another country of the European Economic Area (EEA), s/he must get the terms and conditions that are the legal minimum in that country for working hours and rest breaks, holiday entitlement, minimum pay (including overtime).

If an employee has a problem receiving their written statement, they could take out a grievance against their employer or take a case to an employment tribunal. In Northern Ireland, a case would be taken to an industrial tribunal.

If there's been a problem with their written statement as well and an employee wins a case about another issue (eg unfair dismissal), the tribunal may award compensation in amount of 2 or 4 week's pay but there is a limit for it.

The awards the Employment Tribunal can make are subject to maximum limits, noted below:


Employment Right

Maximum Award

Unfair Dismissal

Basic award: £13,500

Unfair Dismissal

Compensatory award: £74,200 or 12 months' gross pay*

A week's pay

£450 (gross)

Additional Award

£11,700 to £23,400 (26 to 52 weeks' pay)

Dismissal for health and safety reasons

No limit

Dismissal for making a protected disclosure (whistleblowing)

No limit

Discrimination - race, sex, disability, sexual orientation, religion or belief, age

No limit

Breach of contract



*For any dismissals which takes effect on or after 29 July 2013 the cap on the compensatory award is the lower of £74,200 or 52 weeks' gross pay. Dismissals for whistle blowing or related to certain health and safety reasons remain uncapped as do dismissals relating to unlawful discrimination. 52 weeks' gross pay for the purposes of the statutory cap excludes pension contributions, benefits-in-kind and discretionary bonuses.

How is the award calculated?

Any award made by the Tribunal to a successful Claimant is calculated on the basis of the Claimant's losses to the date of the Hearing and, potentially, beyond. Financial compensation consists of basic and compensatory awards. 

Basic award

The basic award is calculated in a similar way to a redundancy payment.  The calculation involves multiplying the relevant factors of length of continuous service, age and a week's pay as at the effective date of termination:

  • One and a half week's pay for each year of employment after age 41;
  • One week's pay for each year of employment between the ages of 22 and 40;
  • Half a week's pay for each year of employment under the age of 22.

A cap of 20 years is placed on the period of continuous service and a week's pay is capped at £450.

A link to a redundancy payment calculator can be found here

Compensatory Award

The Tribunal must consider whether or not it is appropriate to make an award of compensation.  The objective of such an award is to compensate fully but not to award a bonus.

Unlike the basic award, calculation of the compensatory award does not rely on any prescribed formula.  The different heads of loss which the Tribunal must consider when calculating a compensatory award are:

  • Immediate loss of wages;
  • Future loss of wages;
  • Loss of employment rights;
  • Loss of pension rights.

In assessing the Claimant's losses arising from the unfair dismissal as a matter of practice, the Tribunal will consider past and future loss.

Reductions to Award

However, there are arguments which a Respondent can make which may reduce any award made to the Claimant.

A Respondent can argue:

Sums already paid to the Claimant on or following dismissal (such as a redundancy payment, notice payment or an ex gratia payment) should be taken into account by the Tribunal;

  • Any state benefits the Claimant has received should be taken into account;
  • A "Polkey deduction" -- the compensatory award should be reduced or limited to reflect the chances that the Claimant would have been dismissed in any event and that the Respondent's procedural errors made no difference to the outcome;
  • Contributory fault -- the compensatory award should be reduced because the Claimant's conduct contributed to the dismissal;
  • The Claimant failed to mitigate his/her loss and any award should be reduced as a result of this;
  • The Claimant failed to comply with the ACAS code and any award should be reduced accordingly.

Employment Tribunal Statistics

The Employment Tribunal has published statistics on the level of awards made by the Employment Tribunal for the period from 1 April 2012 to 31 March 2013.  The maximum awarded, average and median awarded for unfair dismissal and discrimination claims are set out below.  





Unfair Dismissal




Race Discrimination




Sex Discrimination




Disability Discrimination




Religious Discrimination




Sexual Orientation Discrimination




Age Discrimination




Although the maximum awarded by a Tribunal for unfair dismissal exceeds the statutory cap (currently £74,200), it should be noted that the cap does not apply where the reason for dismissal is for whistleblowing or raising certain health & safety issues.