Employment status

Overview

In employment law a person’s employment status helps determine:

their rights

their employer’s responsibilities

A person may have a different employment status in tax law.

The main types of employment status are:

worker

employee

self-employed and contractor

director

office holder

Contact Acas (or the Labour Relations Agency in Northern Ireland) for advice about employment status, employee rights or employer responsibilities.

Courts and tribunals can make final decisions on employment status.

Worker

A person is generally classed as a ‘worker’ if:

they have a contract or other arrangement to do work or services personally for a reward (your contract doesn’t have to be written)

their reward is for money or a benefit in kind, for example the promise of a contract or future work

they only have a limited right to send someone else to do the work (subcontract)

they have to turn up for work even if they don’t want to

their employer has to have work for them to do as long as the contract or arrangement lasts

they aren’t doing the work as part of their own limited company in an arrangement where the ‘employer’ is actually a customer or client

Employment rights

Workers are entitled to certain employment rights, including:

getting the National Minimum Wage

protection against unlawful deductions from wages

the statutory minimum level of paid holiday

the statutory minimum length of rest breaks

to not work more than 48 hours on average per week or to opt out of this right if they choose

protection against unlawful discrimination

protection for ‘whistleblowing’ - reporting wrongdoing in the workplace

to not be treated less favourably if they work part-time

They may also be entitled to:

Statutory Sick Pay

Statutory Maternity Pay

Statutory Paternity Pay

Statutory Adoption Pay

Shared Parental Pay

Agency workers have specific rights from the first day at work.

Workers usually aren’t entitled to:

minimum notice periods if their employment will be ending, for example if an employer is dismissing them

protection against unfair dismissal

the right to request flexible working

time off for emergencies

Statutory Redundancy Pay

Casual or irregular work

Someone is likely to be a worker if most of these apply:

they occasionally do work for a specific business

the business doesn’t have to offer them work and they don’t have to accept it - they only work when they want to

their contract with the business uses terms like ‘casual’, ‘freelance’, ‘zero hours’, ‘as required’ or something similar

they had to agree with the business’s terms and conditions to get work - either verbally or in writing

they are under the supervision or control of a manager or director

they can’t send someone else to do their work

the business deducts tax and National Insurance contributions from their wages

the business provides materials, tools or equipment they need to do the work

Employee

An employee is someone who works under an employment contract.

A person may be an employee in employment law but have a different status for tax purposes. Employers must work out each worker’s status in both employment law and tax law.

Employment rights

All employees are workers, but an employee has extra employment rights and responsibilities that don’t apply to workers who aren’t employees.

These rights include all of the rights workers have and:

Statutory Sick Pay

statutory maternity, paternity, adoption and shared parental leave and pay (workers only get pay, not leave)

protection against unfair dismissal

the right to request flexible working

time off for emergencies

Statutory Redundancy Pay

Some of these rights require a minimum length of continuous employment before an employee qualifies for them. An employment contract may state how long this qualification period is.

Working out employment status for an employee

Someone who works for a business is probably an employee if most of the following are true:

they’re required to work regularly unless they’re on leave, for example holiday, sick leave or maternity leave

they’re required to do a minimum number of hours and expect to be paid for time worked

a manager or supervisor is responsible for their workload, saying when a piece of work should be finished and how it should be done

they get paid holiday

they’re entitled to contractual or Statutory Sick Pay, and maternity or paternity pay

they can join the business’s pension scheme

the business’s disciplinary and grievance procedures apply to them

they work at the business’s premises or at an address specified by the business

their contract sets out redundancy procedures

the business provides the materials, tools and equipment for their work

they only work for the business or if they do have another job, it’s completely different from their work for the business

their contract, statement of terms and conditions or offer letter (which can be described as an ‘employment contract’) uses terms like ‘employer’ and ‘employee’

If most of these don’t apply, you should work out if the person is self-employed.

Individuals and their employers may have to pay unpaid tax and penalties, or lose entitlement to benefits, if their employment status is wrong.

Employee shareholders

An employee shareholder is someone who works under an employment contract and owns at least £2,000 worth of shares in the employer’s company or parent company.

Employment rights

Employee shareholders have most of the same employment rights as workers and employees.

They also have the right to collective redundancy consultation and transfer of undertakings (TUPE) - this protects the employee’s terms and conditions when the business is transferred to a new owner.

Employee shareholders don’t have these rights:

protection against unfair dismissal - apart from dismissal on grounds of discrimination and in relation to health and safety

statutory redundancy pay

the right to request flexible working - except in the 2 weeks after returning from parental leave

certain statutory rights to request time off for training

Employee shareholders must give 16 weeks notice if they want to come back early from maternity leave, additional paternity leave and adoption leave.

Employers can choose more generous employment rights than the statutory ones.

Tax relief and obligations

Employee shareholders can get tax relief on the first £2,000 of shares they get before 1 December 2016.

Employee shareholders must pay tax on buying and selling shares.

HM Revenue and Customs (HMRC) has further guidance on tax relief for employee shareholders.

Applying for employment shareholder jobs

Anyone can apply for an employee shareholder job.

People claiming Jobseeker’s Allowance don’t have to apply for an employee shareholder job that Jobcentre Plus have told them about.

Existing employees don’t have to accept a change to an employment contract to become an employee shareholder if they don’t want to.

Offering employment shareholder status

Employers must following certain rules when offering employment shareholder status to their employees.

Self-employed and contractor

A person is self-employed if they run their business for themselves and take responsibility for its success or failure.

Self-employed workers aren’t paid through PAYE, and they don’t have the employment rights and responsibilities of employees.

Someone can be both employed and self-employed at the same time, for example if they work for an employer during the day and run their own business in the evenings.

Employment rights

Employment law doesn’t cover self-employed people in most cases because they are their own boss.

However, if a person is self-employed:

they still have protection for their health and safety and, in some cases, protection against discrimination

their rights and responsibilities are set out by the terms of the contract they have with their client

Working out if someone is self-employed

HM Revenue and Customs (HMRC) may regard someone as self-employed for tax purposes even if they have a different status in employment law.

Employers should check if a worker is self-employed in:

tax law - whether they’re exempt from PAYE

employment law - whether they have an employee’s rights

Checking if they’re exempt from PAYE

Someone is probably self-employed and shouldn’t be paid through PAYE if most of the following are true:

they’re in business for themselves, are responsible for the success or failure of their business and can make a loss or a profit

they can decide what work they do and when, where or how to do it

they can hire someone else to do the work

they’re responsible for fixing any unsatisfactory work in their own time

their employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finish

they use their own money to buy business assets, cover running costs, and provide tools and equipment for their work

they can work for more than one client

You can check someone’s employment status:

online

by phone

There are special rules for businesses supplying workers, for example an employment agency.

Checking their employment rights

Someone is probably self-employed and doesn’t have the rights of an employee if they’re exempt from PAYE and most of the following are also true:

they put in bids or give quotes to get work

they’re not under direct supervision when working

they submit invoices for the work they’ve done

they’re responsible for paying their own National Insurance and tax

they don’t get holiday or sick pay when they’re not working

they operate under a contract (sometimes known as a ‘contract for services’ or ‘consultancy agreement’) that uses terms like ‘self-employed’, ‘consultant’ or an ‘independent contractor’

Contractors

A contractor can be:

self-employed

a worker or an employee if they work for a client and are employed by an agency

There’s a special scheme for self-employed contractors and sub-contractors working in the construction industry called the Construction Industry Scheme (CIS).

If someone becomes self-employed

A worker must tell HMRC if they become self-employed.

Director

Company directors run limited companies on behalf of shareholders.

Directors have different rights and responsibilities from employees, and are classed as office holders for tax and National Insurance contribution purposes.

If a person does other work that’s not related to being a director, they may have an employment contract and get employment rights.

Office holder

A person who’s been appointed to a position by a company or organisation but doesn’t have a contract or receive regular payment may be an office holder. This includes:

statutory appointments, such as registered company directors or secretaries, board members of statutory bodies, or crown appointments

appointments under the internal constitution of an organisation, such as club treasurers or trade union secretaries

appointments under a trust deed, such as trustees

ecclesiastical appointment, such as members of the clergy

Office holders are neither employees nor workers. However, it’s possible for someone to be an office holder and an employee if they have an employment contract with the same company or organisation that meets the criteria for employees.

Working out employment status for an office holder

Someone is likely to be an office holder if most of these statements apply to them:

there is no contract or service agreement relating to their appointment

their duties are minimal, and are only those required under the relevant statute, constitution or trust deed

they don’t get a salary or any other form of regular payment for their services

the only payment they get is a voluntary payment (honorarium), regardless of the work they do - tax and National Insurance are deducted by the appointing body

they’re effectively working as an independent office, and are not under the close supervision or control of the appointing body

Legal decisions on employment status

A court or employment tribunal (known as an industrial tribunal in Northern Ireland) can make a final decision on employment status for employment rights purposes. They’ll look at how the employment relationship between the person and the business works in practice.

HM Revenue and Customs (HMRC) may separately argue that someone is self-employed for tax purposes. This may be confirmed by the tax tribunal and the courts.

An employment tribunal or court may still make a decision that someone is a worker or employee for employment rights purposes.


Fixed-term employment contracts

What counts as a fixed-term contract

Employees are on a fixed-term contract if both of the following apply:

they have an employment contract with the organisation they work for

their contract ends on a particular date, or on completion of a specific task, eg a project

Workers don’t count as fixed-term employees if they:

have a contract with an agency rather than the company they’re working for

are a student or trainee on a work-experience placement

are working under a ‘contract of apprenticeship’

are a member of the armed forces

They may be a fixed-term employee if they’re:

a seasonal or casual employee taken on for up to 6 months during a peak period

a specialist employee for a project

covering for maternity leave

Employees' rights

Employers must not treat workers on fixed-term contracts less favourably than permanent employees doing the same or largely the same job, unless the employer can show that there is a good business reason to do so.

This is known as ‘objective justification’.

Employers must also ensure that fixed-term employees get:

the same pay and conditions as permanent staff

the same or equivalent benefits package

information about permanent vacancies in the organisation

protection against redundancy or dismissal

However, they’re only entitled to the same rights as permanent staff working for the same employer, and not an associated employer’s organisation.

Anyone who’s worked continually for the same employer for 2 years or more has the same redundancy rights as a permanent employee.

Workplace disputes

Workers on fixed-term contracts should try to sort out any concerns they have with their manager.

If they’re still not satisfied, they can ask their employer for a written statement explaining their treatment, or complain using the employer’s grievance procedure.

Their final option is to make a claim to an employment tribunal.

Renewing or ending a fixed-term contract

Ending a fixed-term contract

Fixed-term contracts will normally end automatically when they reach the agreed end date. The employer doesn’t have to give any notice.

If a contract isn’t renewed

This is considered to be a dismissal, and if the employee has 2 years’ service the employer needs to show that there’s a ‘fair’ reason for not renewing the contract (eg, if they were planning to stop doing the work the contract was for).

Workers have the right:

not to be unfairly dismissed after 2 years’ service - for employees who were in employment before 6 April 2012, it’s 1 year’s service

to a written statement of reasons for not renewing the contract - after 1 year’s service

They may be entitled to statutory redundancy payments after 2 years’ service if the reason for non-renewal is redundancy.

If the employer wants to end the contract earlier

What happens depends on the terms of the contract. If it says:

nothing about being ended early, the employer may be in breach of contract

it can be ended early, and the employer has given proper notice, the contract can be ended

Minimum notice period

Fixed-term employees have the right to a minimum notice period of:

1 week if they’ve worked continuously for at least 1 month

1 week for each year they’ve worked, if they’ve worked continuously for 2 years or more

These are the minimum periods. The contract may specify a longer notice period.

If an employer ends a contract without giving the proper notice, the employee may be able to claim breach of contract.

Working longer than the contract’s end date

If an employee continues working past the end of a contract without it being formally renewed, there’s an ‘implied agreement’ by the employer that the end date has changed.

The employer still needs to give proper notice if they want to dismiss the worker.

The limit on renewing a fixed-term contract

Any employee on fixed-term contracts for 4 or more years will automatically become a permanent employee, unless the employer can show there is a good business reason not to do so.

However, an employer and unions (or a staff association) may make a collective agreement that removes the automatic right to become a permanent employee in these circumstances.

Renewing a fixed-term contract on less favourable terms

If an employer wants to do this, the employee can negotiate with them to reach an agreement.

If the contract ends and they have been unable to reach an agreement, the employee may be able to claim unfair dismissal.

Ending the contract early

Employees must hand in their notice 1 week in advance if they’ve worked for an employer for a month or more. The contract may state that they need to give more notice.


Flexible working

Overview

Flexible working is a way of working that suits an employee’s needs, for example having flexible start and finish times, or working from home.

Flexible working rules are different in Northern Ireland.

All employees have the legal right to request flexible working - not just parents and carers.

This is known as ‘making a statutory application’.

Employees must have worked for the same employer for at least 26 weeks to be eligible.

What employers must do

Employers must deal with requests in a ‘reasonable manner’.

Examples of handling requests in a reasonable manner include:

assessing the advantages and disadvantages of the application

holding a meeting to discuss the request with the employee

offering an appeal process

If an employer does not handle a request in a reasonable manner, the employee can take them to an employment tribunal.

An employer can refuse an application if they have a good business reason for doing so.

Types of flexible working

There are different ways of working flexibly.

Job sharing

Two people do one job and split the hours.

Working from home

It might be possible to do some or all of the work from home or anywhere else other than the normal place of work.

Part time

Working less than full-time hours (usually by working fewer days).

Compressed hours

Working full-time hours but over fewer days.

Flexitime

The employee chooses when to start and end work (within agreed limits) but works certain ‘core hours’, for example 10am to 4pm every day.

Annualised hours

The employee has to work a certain number of hours over the year but they have some flexibility about when they work. There are sometimes ‘core hours’ which the employee regularly works each week, and they work the rest of their hours flexibly or when there’s extra demand at work.

Staggered hours

The employee has different start, finish and break times from other workers.

Phased retirement

Default retirement age has been phased out and older workers can choose when they want to retire. This means they can reduce their hours and work part time.

Applying for flexible working

Employees can apply for flexible working if they’ve worked continuously for the same employer for the last 26 weeks. It’s known as ‘making a statutory application.’

The basic steps are:

The employee writes to the employer.

The employer considers the request and makes a decision within 3 months - or longer if agreed with the employee.

If the employer agrees to the request, they must change the terms and conditions in the employee’s contract.

If the employer disagrees, they must write to the employee giving the business reasons for the refusal.  The employee may be able to complain to an employment tribunal.

Employees can only make one application for flexible working a year.

Writing to the employer

An employee should email or write a letter to their employer.

Employers may ask employees to use a standard form to make an application.

What the email or letter must include

The application must include:

the date

a statement that this is a statutory request

details of how the employee wants to work flexibly and when they want to start

an explanation of how they think flexible working might affect the business and how this could be dealt with, for example if they’re not at work on certain days

a statement saying if and when they’ve made a previous application

Withdrawing an application

Employees should tell their employer in writing if they want to withdraw their application.

The employer can treat an application as withdrawn if the employee misses 2 meetings to discuss an application or appeal without good reason, for example sickness.

The employer must tell the employee they are treating the request as withdrawn.

After the application

Employers must consider flexible working requests in a ‘reasonable manner’.

They should usually make a decision within 3 months of the request (or longer if agreed with the employee).

Agreeing the application

The employer should write to the employee with:

a statement of the agreed changes

a start date for flexible working

They should also change the employee’s contract to include the new terms and conditions.

This should be done as soon as possible but no later than 28 days after the request was approved.

Rejecting an application

The employer must tell the employee that they’ve rejected the application.

Reasons for rejecting

Employers can reject an application for any of the following reasons:

extra costs that will damage the business

the work cannot be reorganised among other staff

people cannot be recruited to do the work

flexible working will affect quality and performance

the business will not be able to meet customer demand

there’s a lack of work to do during the proposed working times

the business is planning changes to the workforce

Appeals

Employees no longer have a statutory right to an appeal.

But offering an appeals process helps to demonstrate that the employer is handling requests in a ‘reasonable manner’.

How to appeal

The employee must follow the company’s procedures for appealing.

The employee or employer should follow the company’s procedures for solving a workplace dispute if a rejected application causes problems.

Going to an employment tribunal

Employees can complain to an employment tribunal if the employer:

did not handle the request in a ‘reasonable manner’

wrongly treated the employee’s application as withdrawn

dismissed or treated an employee poorly because of their flexible working request, for example refused a promotion or pay rise

rejected an application based on incorrect facts

Employees cannot complain to a tribunal just because their flexible working request was rejected.

An employee should complain to the tribunal within 3 months of:

hearing their employer’s decision

hearing their request was treated as withdrawn

the date the employer should have responded to their request (but failed to do so)

If an employer or employee is unsure of their rights, they should get legal advice.


Holiday entitlement

Entitlement

Almost all workers are legally entitled to 5.6 weeks’ paid holiday a year (known as statutory leave entitlement or annual leave).

This includes:

agency workers

workers with irregular hours

workers on zero-hours contracts

An employer can include bank holidays as part of statutory annual leave.

Coronavirus (COVID-19) does not affect workers’ entitlement to holiday pay and leave, except for carrying over leave.

Statutory annual leave entitlement

Most workers who work a 5-day week must receive at least 28 days’ paid annual leave a year. This is the equivalent of 5.6 weeks of holiday.

Working part-time

Part-time workers are entitled to at least 5.6 weeks’ paid holiday, but this will amount to fewer than 28 days.

For example, if they work 3 days a week, they must get at least 16.8 days’ leave a year (3 × 5.6).

Use the holiday entitlement calculator to work out a part-time worker’s leave.

Irregular hours

People working irregular hours (like shift workers or term-time workers) are entitled to paid time off for every hour they work.

They might find it helpful to get an estimate of holiday entitlement by calculating leave based on days or hours worked in an average week.

Limits on statutory leave

Statutory paid holiday entitlement is limited to 28 days. For example, staff working 6 days a week are only entitled to 28 days’ paid holiday.

Bank holidays

Bank or public holidays do not have to be given as paid leave.

An employer can choose to include bank holidays as part of a worker’s statutory annual leave.

Extra leave

An employer can choose to offer more leave than the legal minimum. They do not have to apply all the rules that apply to statutory leave to the extra leave. For example, a worker might need to be employed for a certain amount of time before they become entitled to it.

Other aspects of holiday entitlement

Workers have the right to:

get paid for leave

build up (‘accrue’) holiday entitlement during maternity, paternity and adoption leave

build up holiday entitlement while off work sick

request holiday at the same time as sick leave

Disputes

Paid annual leave is a legal right that an employer must provide. If a worker thinks their right to leave and pay are not being met there are a number of ways to resolve the dispute.

Calculate leave entitlement

Annual leave begins to build up (‘accrue’) as soon as a worker starts their job.

An employer can use a ‘leave year’ or an ‘accrual’ system to work out how much leave their staff should get.

Use the holiday entitlement calculator to work out how much leave someone should get.

Leave year

An employer should tell their staff the dates of their statutory leave year as soon as they start working, for example, it might run from 1 January to 31 December.

Workers must take their statutory leave during this time. If a leave year is not set out in a contract then it will start:

on the first day of a new job (if started after 1 October 1998)

on 1 October (if started on or before 1 October 1998)

The leave year and holiday entitlement is not affected by maternity, paternity or adoption leave. The employee still builds up (‘accrues’) holiday over these periods.

Leave entitlement when starting a new job

If a worker starts their job part-way through a leave year, they’re only entitled to part of their total annual leave for the current leave year. What they get depends on how much of the year is left.

Use the holiday entitlement calculator to work out how much leave someone has left.

Accrual system

An employer can use an accrual system to work out a worker’s leave during the first year of the job. Under this system, a worker gets one-twelfth of their leave in each month.

Carrying over leave

The worker’s contract says how many days’ leave they can carry over into the next year.

If a worker gets 28 days’ leave, they can carry over a maximum of 8 days.

If a worker gets more than 28 days’ leave, their employer may allow them to carry over any additional untaken leave. Check the employment contract, company handbook or intranet to see what the rules say.

Leave affected by coronavirus (COVID-19)

Workers may be able to carry over untaken leave into the next 2 years if they cannot take it because their work is affected by coronavirus.

They could do this if, for example:

they need to provide cover for their co-workers and have no other opportunity to take holiday in their leave year

there will be staff shortages if too many workers take their leave before the end of the leave year

they’re classed as critical workers, such as healthcare or supermarket workers

If a worker is able to take leave, the standard rules for carrying over leave still apply.

Workers on parental or sick leave

If a worker cannot take all of their leave entitlement because they’re already on a different type of leave (for example sick, maternity or parental leave), they can carry over some or all of the untaken leave into the next leave year.

An employer must allow a worker to carry over a maximum of 20 of their 28 days’ leave entitlement if the worker could not take annual leave because they were off sick.

Holiday pay

Workers are entitled to a week’s pay for each week of statutory leave that they take.

Most workers are entitled to 5.6 weeks’ paid holiday a year. You can use the holiday calculator to work out how much leave someone should get.

A week’s pay is worked out according to the kind of hours someone works and how they’re paid for the hours. This includes full-time, part-time, term-time and casual workers.

Working pattern | How a week’s pay is calculated

Fixed hours and fixed pay (full- or part-time) | A worker’s pay for a week

Shift work with fixed hours (full- or part-time) | The average number of weekly fixed hours a worker has worked in the previous 52 weeks, at their average hourly rate

No fixed hours (casual work, including zero-hours contracts) | A worker’s average pay from the previous 52 weeks (only counting weeks in which they were paid)

Calculating average hourly or weekly rate

To calculate average hourly rate, only the hours worked and how much was paid for them should be counted. Take the average rate over the last 52 weeks.

A ‘week’ usually runs from Sunday to Saturday. Only use another 7-day period (like Thursday to Wednesday) if that’s how a worker’s pay is calculated.

If no pay was paid in any week, count back another week so the rate is based on 52 weeks in which pay was paid. You can count back a maximum of 104 weeks to find these.

If a worker has less than 52 weeks of pay, use the average pay rate for the full weeks they have worked.

Workers who are paid monthly

To work out a week’s pay for someone who’s paid monthly:

Calculate the worker’s average hourly pay for the last month. Do this by dividing the month’s pay by the number of hours worked in the month.

Calculate the weekly pay. Do this by multiplying the average hourly pay by the number of hours worked in a week.

Use the weekly pay calculation for each of the last 52 weeks to work out an average week’s pay.

Rolled-up holiday pay

Holiday pay should be paid for the time when annual leave is taken. An employer cannot include an amount for holiday pay in the hourly rate (known as ‘rolled-up holiday pay’).

If a current contract still includes rolled-up pay, it needs to be re-negotiated.

More information

There’s guidance for calculating holiday pay for workers without fixed hours or pay, which includes several examples.

You can also contact the Advisory, Conciliation and Arbitration Service (Acas) with questions about general holiday pay issues.

Booking time off

The general notice period for taking leave is at least twice as long as the amount of leave a worker wants to take, plus 1 day. For example, a worker would give 3 days’ notice for 1 day’s leave.

An employer can refuse a leave request or cancel leave but they must give as much notice as the amount of leave requested, plus 1 day. For example, an employer would give 11 days’ notice if the worker asked for 10 days’ leave.

If the contract says something different about the notice a worker or employer should give, what’s in the contract will apply.

Although employers can refuse to give leave at a certain time, they cannot refuse to let workers take the leave at all.

Part leave days

Some workers may be entitled to a part leave day - for example if they’re part-time or have a half day’s leave to take. How a part day should be taken is up to the employer.

When leave can and cannot be taken

Employers can:

tell their staff to take leave, for example bank holidays or Christmas

restrict when leave can be taken, for example at certain busy periods

There may be rules about this in the employment contract or it may be what normally happens in the workplace.

The notice period for this is at least twice as long as the leave they want their staff to take. The employer must tell the worker before the notice period begins.

If an employer wants a worker to take leave, they need to make sure that the worker can relax, rest and enjoy leisure during their holiday. For example, an employer cannot force a sick worker to take leave.

Taking holiday before leaving a job

During their notice period the worker may be able to take whatever is left of their statutory annual leave.

Use the holiday entitlement calculator to work this out. How much they get depends on how much of the holiday year has passed.

Taking more leave than the entitlement

If a worker has taken more leave than they’re entitled to, their employer must not take money from their final pay unless it’s been agreed beforehand in writing. The rules in this situation should be outlined in the employment contract, company handbook or intranet.

Getting paid instead of taking holidays

The only time someone can get paid in place of taking statutory leave (known as ‘payment in lieu’) is when they leave their job. Employers must pay for untaken statutory leave, even if the worker is dismissed for gross misconduct.

If an employer offers more than 5.6 weeks’ annual leave, they can agree separate arrangements for the extra leave.

Zero-hours contracts

When a worker on a zero-hours contract has not worked for 4 weeks, this may be treated as the end of the employment. The employer will usually pay the worker for untaken leave, even if they’re going to offer them more work later.

Workers on furlough because of coronavirus (COVID-19)

Workers have the right to build up (‘accrue’) holiday entitlement while they’re on temporary leave (‘furloughed’) because of coronavirus (COVID-19). They can also take leave while on furlough.

Bank holidays

If a furloughed worker is not working on a bank holiday they usually take as paid leave, they can agree with their employer to either:

take it as normal

take it at a later date

An employer must give a worker at least 2 days’ notice if they want them to take a bank holiday as paid leave, unless the worker’s employment contract says something different.

The employer must tell the worker at least one day in advance of giving 2 days’ notice.

Holiday pay

An employer can continue to claim for a furloughed worker’s wages when the worker takes annual leave.

Calculate holiday pay as normal for any time the worker was furloughed. If the holiday pay turns out to be more than the worker was paid during this time, their employer must pay the difference.

Agency workers

Agency workers with ‘worker status’, including those who use an umbrella company, have their usual holiday entitlement when on furlough.

Their employer can claim a grant to help cover the cost of their wages.

Holiday entitlement for those without worker status remains the same and depends on their contract.

Agency workers may also be able to carry holiday into future leave years.

More information

There’s more guidance on holiday entitlement and pay during coronavirus.
You can also find out more about holiday entitlement during coronavirus on the Acas website.


Maximum weekly working hours

Overview

You can’t work more than 48 hours a week on average - normally averaged over 17 weeks. This law is sometimes called the ‘working time directive’ or ‘working time regulations’.

You can choose to work more by opting out of the 48-hour week.

If you’re under 18, you can’t work more than 8 hours a day or 40 hours a week.

Exceptions

You may have to work more than 48 hours a week on average if you work in a job:

where 24-hour staffing is required

in the armed forces, emergency services or police

in security and surveillance

as a domestic servant in a private household

as a seafarer, sea-fisherman or worker on vessels on inland waterways

where working time is not measured and you’re in control, eg you’re a managing executive with control over your decisions

Contact the Acas helpline or use the Acas Helpline Online to get further advice on working hours.

Calculating your working hours

Average working hours are calculated over a ‘reference’ period, normally 17 weeks.

This means you can work more than 48 hours one week, as long as the average over 17 weeks is less than 48 hours a week.

Your working hours can’t be averaged out if you’re under 18. You can’t work more than 40 hours in any one week.

Exceptions

Some jobs have different reference periods, eg:

trainee doctors have a 26-week reference period

the offshore oil and gas sector has a 52-week reference period

What counts as work

A working week includes:

job-related training

time spent travelling if you travel as part of your job, eg sales rep

working lunches, eg business lunches

time spent working abroad

paid overtime

unpaid overtime you’re asked to do

time spent on call at the workplace

any time that is treated as ‘working time’ under a contract

travel between home and work at the start and end of the working day (if you don’t have a fixed place of work)

What doesn’t count as work

A working week doesn’t include:

time you spend on call away from the workplace

breaks when no work is done, eg lunch breaks

travelling outside of normal working hours

unpaid overtime you’ve volunteered for, eg staying late to finish something off

paid or unpaid holiday

travel to and from work (if you have a fixed place of work)

You have more than one job

Your combined working hours shouldn’t be more than 48 hours a week on average.

If you work more than 48 hours on average, you can either:

sign an opt-out agreement

reduce your hours to meet the 48-hour limit

Opting out of the 48 hour week

You can choose to work more than 48 hours a week on average if you’re over 18. This is called ‘opting out’.

Your employer can ask you to opt out, but you can’t be sacked or treated unfairly for refusing to do so.

You can opt out for a certain period or indefinitely. It must be voluntary and in writing.

Workers who can’t opt out

You can’t opt-out of the 48 hour week if you’re:

airline staff

a worker on ships or boats

a worker in the road transport industry, eg delivery drivers (except for drivers of vehicles under 3.5 tonnes using GB Domestic drivers’ hours rules)

other staff who travel in and operate vehicles covered by EU rules on drivers’ hours, eg bus conductors

a security guard on a vehicle carrying high-value goods

Cancelling an opt-out agreement

You can cancel your opt-out agreement whenever you want - even if it’s part of your  employment contract.

You must give your employer at least 7 days’ notice. You may have to give more notice (up to 3 months) if you have a written opt-out agreement.

Your employer can’t force you to cancel your opt-out agreement.


Night working hours

Hours and limits

Staff who regularly work at least 3 hours during the ‘night period’ are night workers.

The night period is 11pm to 6am, unless the worker and employer agree a different night period.

If they do, it must be 7 hours long and include midnight to 5am. It must be agreed in writing.

Staff may also be night workers if there’s a collective agreement (for example, trade union agreement) that states their work is night work.

National Minimum Wage

The National Minimum Wage applies to night workers but there is not a higher night working rate.

Sleep-in shifts

The number of hours that workers get paid the National Minimum Wage depends on whether they’re expected to sleep or work for most of their shift.

Workers who are expected to sleep for most of a sleep-in shift (for example, a care worker), and are provided with suitable sleeping facilities, will only get the National Minimum Wage for the periods when they’re awake to perform tasks.

Workers who are expected to work for most of a shift will get the National Minimum Wage for their whole shift, even if they’re allowed to sleep between tasks.

Limits on working hours for night workers

Additional rules apply to night workers on top of the rules on maximum weekly working hours and rest breaks.

Night workers must not work more than an average of 8 hours in a 24-hour period.

The average is usually calculated over 17 weeks, but it can be over a longer period of up to 52 weeks if the workers and the employer agree - for example, by collective agreement.

Regular overtime is included in the average, but not occasional overtime.

Workers cannot opt out of the limit.

Workers aged 16 or 17

Staff aged 16 or 17 cannot work between midnight and 4am.

They usually cannot work between 10pm and 6am (this can be changed to not working between 11pm and 7am, by contract) but there are exceptions if they work in:

agriculture

cultural, sporting, artistic or advertising activities

a hospital

a hotel or catering

retail

post or newspaper delivery

In exceptional circumstances they can work at night if there’s no adult to do the work and they’re needed to either:

handle a sudden increase in demand

maintain the continuity of a service or production - for example, filming

The employer must give the young person a rest period of the same length as the extended shift.

There are other restrictions on employing young people.

Special hazards and mental or physical strain

Night workers who deal with special hazards or whose work involves mental or physical strain cannot work longer than 8 hours in any 24-hour period.

A risk assessment must be carried out to identify special hazards and work involving mental or physical strain.

The hazards and strains may also be set out in collective or workforce agreements.

What employers must do

Employers must keep records of night workers’ working hours to show they are not exceeding the limits.

The records must be kept for at least 2 years.

Contact Acas for more information.

You cannot discriminate against a worker if they do not want to work nights.

Exceptions to night work limits

The limits on night working hours do not usually apply:

in the armed forces and emergency services

to domestic staff employed in a private house

when people can choose how long they work - for example, company executives or freelancers

The limits on night working hours do not apply:

in jobs that need round-the-clock staffing, like hospital work

in an industry with busy peak periods, like agriculture, retail, tourism, security and surveillance

if there’s an emergency or an accident

if a member of staff has to travel a long distance from home to work or constantly works in different places

if a collective or workforce agreement excludes or changes the restriction on night work

Different rules apply to workers in road, sea and air transport.

Rest breaks if night work limits do not apply

Workers must get ‘compensatory rest’ instead of a normal working week with breaks during the day.

Compensatory rest is a minimum of 90 hours rest per week on average.

Employers must also follow the general rules on working hours.

If you’re not sure whether these exceptions apply in your situation, contact Acas.

Health assessments

Employers must offer workers a free health assessment before they become a night worker. Workers do not have to accept.

The assessment must be written by a qualified health professional. It can be a questionnaire.

Employers must take into account that night work might increase a worker’s stress levels.

The worker must get a follow-up examination by a health professional when an employer is unsure if the worker is fit for night work.

A repeat assessment must be offered regularly.

The employer must offer suitable other work where possible if a worker has health problems that a doctor says are related to night work.

Keep records

Employers must keep confidential records of:

the health assessments (keep for 2 years)

dates when assessments were offered (if a worker did not want one)


Overtime: your rights

Overview

If you have normal working hours, overtime usually means any time you work beyond these hours.

Normal working hours are the hours fixed by your employment contract.

Overtime pay

Employers do not have to pay workers for overtime. However, your average pay for the total hours you work must not fall below the National Minimum Wage.

Your employment contract will usually include details of any overtime pay rates and how they’re worked out.

Help and advice

Contact Acas for free and confidential advice on working hours.

Compulsory overtime

You only have to work overtime if your contract says so.

Even if it does, by law, you cannot usually be forced to work more than an average of 48 hours per week. You can agree to work longer - but this agreement must be in writing and signed by you.

Unless your contract guarantees you overtime, your employer can stop you from working it.

However, your employer cannot discriminate against anyone, for example by stopping some employees from working overtime while letting others do so.

Part-time workers

Usually, part-time workers must not be treated less favourably than full-time staff.

You’ll normally get paid at your hourly rate if you work longer hours than set out in your employment contract. Your employer will usually only pay overtime if at least one of the following applies:

you work more than the normal working hours of full-time staff and full-time staff would get extra pay for working these hours

you work at unsocial times (for example, late at night) and full-time staff would get more pay

Your contract will say if your right to paid overtime is different.

Time off and paid leave

Time off in lieu (TOIL)

Some employers give you time off instead of paying for overtime. This is known as ‘time off in lieu’.

You agree the terms (for example, when it can be taken) with your employer.


Rest breaks at work

Overview

Workers over 18 are usually entitled to 3 types of break - rest breaks at work, daily rest and weekly rest.

Rest breaks at work

Workers have the right to one uninterrupted 20 minute rest break during their working day, if they work more than 6 hours a day. This could be a tea or lunch break.

The break doesn’t have to be paid - it depends on their employment contract.

Daily rest

Workers have the right to 11 hours rest between working days, eg if they finish work at 8pm, they shouldn’t start work again until 7am the next day.

Weekly rest

Workers have the right to either:

an uninterrupted 24 hours without any work each week

an uninterrupted 48 hours without any work each fortnight

A worker’s employment contract may say they’re entitled to more or different rights to breaks from work.

Work that puts health and safety at risk

An employer should give an employee enough breaks to make sure their health and safety isn’t at risk if that work is ‘monotonous’ (eg work on a production line).

Domestic workers in a private house (eg a cleaner or au pair) aren’t entitled to rest breaks for health and safety reasons.

Taking breaks

Employers can say when employees take rest breaks during work time as long as:

the break is taken in one go somewhere in the middle of the day (not at the beginning or end)

workers are allowed to spend it away from their desk or workstation (ie away from where they actually work)

It doesn’t count as a rest break if an employer says an employee should go back to work before their break is finished.

Unless a worker’s employment contract says so, they don’t have the right to:

take smoking breaks

get paid for rest breaks

Exceptions and special circumstances

There are exemptions to the rights to rest breaks.

Some workers are entitled to compensatory rest breaks, eg shift workers.

Young people and lorry and coach drivers have different rights to rest breaks.

Compensatory rest

Workers may be entitled to ‘compensatory rest’ if they don’t have the right to specific rest breaks. Compensatory rest breaks are the same length of time as the break (or part of it) that they’ve missed.

A worker may be entitled to compensatory rest if:

they’re a shift worker and can’t take daily or weekly rest breaks between ending one shift and starting another

their workplace is a long way from their home (eg an oil rig)

they work in different places which are a reasonable distance from each other

they’re doing security and surveillance-based work

they’re working in an industry which is very busy at certain times of the year – like agriculture, retail, postal services or tourism

they need to work because there’s an exceptional event, an accident or a risk that an accident is about to happen

the job needs round-the-clock staffing so there aren’t interruptions to any services or production (eg hospital work)

they work in the rail industry on board trains or their job is linked to making sure trains run on time

their working day is split up (eg they’re a cleaner and work for part of the morning and the evening)

there is an agreement between management, trade unions or the workforce (a ‘collective’ or ‘workforce’ agreement) that has changed or removed rights to these rest breaks for a group of workers

The total rest entitlement for a week is 90 hours a week on average - this doesn’t include breaks at work, which are additional.

Exceptions

Workers aren’t entitled to the 3 general types of rest break if they work in:

the armed forces, emergency services or police and they’re dealing with an exceptional catastrophe or disaster

a job where they freely choose what hours they work (like a managing director) or where the work is not measured (ie no set hours)

sea transport

air or road transport (known as ‘mobile’ workers)

Air, sea or road transport workers may be covered by special rules that give them different rest rights.

Mobile workers not covered by any special rules usually have the right to regular rest so that their health and safety (or anyone else’s) isn’t put at risk.

There are also special rules for young workers and for lorry and coach drivers.

Young workers

Young workers (above school leaving age and under 18) are usually entitled to:

a 30 minute rest break if they work more than 4.5 hours (if possible this should be one continuous break)

daily rest of 12 hours

weekly rest of 48 hours

Exceptions for young workers

Young workers sometimes aren’t entitled to daily rest or rest breaks at work if their work has to be done because of an exceptional event (eg an accident). This is only where:

there isn’t a worker over 18 who can do the work

the work is temporary and must be done immediately

Compensatory rest for young workers

Young workers have the right to compensatory rest if they’re not entitled to daily rest or rest breaks at work. This is the same amount of rest that they should have had. It can be taken just after any rest they’ve missed but it must be taken within the following 3 weeks.

Disputes

Workers who can’t take or aren’t allowed rest breaks should speak to their manager informally.

Get more information for employees who want to raise a grievance or advice for employers on handling grievances if there is a disagreement about rest breaks.

Workers can also get advice on rest breaks from the Acas helpline.

If a worker can’t solve a problem, they may be able to make a claim to an employment tribunal.


Dismissing staff

Overview

Dismissal is when you end an employee’s contract. When dismissing staff, you must do it fairly.

There are different types of dismissal:

fair dismissal

unfair dismissal

constructive dismissal

wrongful dismissal

If you’ve had to dismiss staff because of coronavirus (COVID-19), you might be able to re-employ them and pay their wages through the Coronavirus Job Retention Scheme.

Fair and unfair dismissal

A dismissal is fair or unfair depending on:

your reason for it

how you act during the dismissal process

Constructive dismissal

This is when an employee resigns because you’ve breached their employment contract. This could be a single serious event or a series of less serious events.

An employee could claim constructive dismissal if you:

cut their wages without agreement

unlawfully demote them

allow them to be harassed, bullied or discriminated against

unfairly increase their workload

change the location of their workplace at short notice

make them work in dangerous conditions

A constructive dismissal is not necessarily unfair - but it would be difficult for you to show that a breach of contract was fair.

A constructive dismissal might lead to a claim for wrongful dismissal.

Wrongful dismissal

This is where you break the terms of an employee’s contract in the dismissal process, for example dismissing someone without giving them proper notice.

Wrongful dismissal is not the same as unfair dismissal.

If an employee thinks you’ve dismissed them unfairly, constructively or wrongfully, they might take you to an employment tribunal.

Fair dismissals

You must have a valid reason for dismissing an employee. Valid reasons include:

their capability or conduct

redundancy

something that prevents them from legally being able to do their job, for example a driver losing their driving licence

There could be other fair reasons too - these are sometimes called ‘other substantial reasons’.

Acting reasonably

Even if you have a fair reason, the dismissal is only fair if you also act reasonably during the dismissal and disciplinary process.

There’s no legal definition of ‘reasonableness’, but if you’re taken to an employment or industrial tribunal they would consider whether you:

genuinely believed that the reason was fair

carried out proper investigations where appropriate

followed the relevant procedures

told the employee why they were being considered for dismissal and listened to their views (in Northern Ireland, the employer must do this in writing)

allowed the employee to be accompanied at disciplinary/dismissal hearings

gave the employee the chance to appeal

Reasonableness might also depend on whether the employee could be expected to understand the consequences of their behaviour.

Dismissal and disciplinary procedures

You must set out your dismissal and disciplinary rules and procedures in writing - if you do not, a tribunal can order you to pay an employee compensation.

Summary dismissal

This is when you dismiss someone instantly without notice or pay in lieu of notice, usually because of gross misconduct (for example theft, fraud, violence).

Tribunals may rule a summary dismissal as ‘procedurally unfair’ - you can only suspend someone without pay if their contract says you can do this. If it does not, you should suspend the employee on full pay and investigate the circumstances.

If you feel summary dismissal’s your only choice, you must still follow a fair procedure as you would do for any other disciplinary matter.

Unfair dismissals

Even if you think you’ve dismissed someone fairly, they could still claim unfair dismissal against you if they think that:

the reason you gave for the dismissal was not the real one

the reason was unfair

you acted unreasonably, for example by failing to give them plenty of warning about their dismissal

Automatically unfair reasons for dismissal

Even if you’ve acted reasonably, some reasons for dismissal are classed automatically unfair. These are to do with the following areas:

pregnancy, including all reasons relating to maternity

family, including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants

acting as an employee representative

acting as a trade union representative

acting as an occupational pension scheme trustee

joining or not joining a trade union

being a part-time or fixed-term employee

pay and working hours, including the Working Time Regulations, annual leave and the National Minimum Wage

whistleblowing

Compulsory retirement on the grounds of age is unlawful unfair dismissal unless you can objectively justify it - but you could be challenged at a tribunal.

Industrial action

It’s automatically unfair to dismiss someone for taking part in official (‘lawful’) industrial action:

in the 12-week period from the day the industrial action starts

if the action lasts longer than 12 weeks and you have not taken reasonable steps to resolve the dispute

Only an employment or industrial tribunal can decide whether or not you’ve taken reasonable steps to resolve a dispute.

If you ‘lock out’ employees taking industrial action, the days of the lock-out are not included in the calculation of the 12-week protected period.

A lock-out is where you prevent employees from getting to their workplace, for example by locking the doors.

Disability

If a disabled employee cannot do their job because there are no reasonable adjustments that can be made, it may be fair for you to dismiss them.

Political beliefs and groups

It is not automatically unfair to dismiss someone because of their political beliefs or political groups they belong to, but a tribunal might find this unfair.

There’s no longer a qualifying period for someone going to an employment tribunal if they’ve been dismissed because of political opinions or affiliation. This applies to anyone dismissed from 25 June 2013.

Penalties for unfair dismissals

If a tribunal finds that an employee has been unfairly dismissed, you might be ordered to:

reinstate them (give them their job back)

re-engage them (re-employ them in a different job)

You might also have to pay compensation, which depends on the employee’s:

age

gross weekly pay

length of service

You might have to pay extra compensation if you do not follow a tribunal’s order to reinstate someone.

There’s a limit on the amount a tribunal can award for unfair dismissal, apart from in cases relating to:

health and safety (for example where you unfairly dismiss someone for taking action on health and safety grounds)

whistleblowing

Eligibility to claim unfair dismissal

Employees can only claim unfair dismissal if they’ve worked for a qualifying period - unless they’re claiming for an automatically unfair reason.

Date employment started | When the employee can claim

Before 6 April 2012 | After first year of employment

After 6 April 2012 | After 2 years of employment

Who cannot claim unfair dismissal

The right to complain to a tribunal about unfair dismissal is not available to:

self-employed people

independent contractors

members of the armed forces

employees who have reached a settlement with their employer through Acas (Advisory, Conciliation and Arbitration Service) or the Labour Relations Agency (LRA) in Northern Ireland

employees who have reached a settlement with their employer through a ‘settlement agreement’ or ‘compromise agreement’ after taking legal advice

employees employed under an illegal contract, for example a barman under the age of 18

employees covered by a dismissal procedure agreement that’s been legally exempted from the unfair dismissal rules

employees taking part in unofficial industrial action (unless the dismissal is for an automatically unfair reason)

police officers (unless the dismissal relates to health and safety or whistleblowing)

those working on a fishing vessel and paid by a share in the profits or gross earnings of the vessel

Dismissals for conduct or performance reasons

You can dismiss an employee if:

they’re incapable of doing their job to the required standard

they’re capable, but unwilling to do their job properly

they’ve committed some form of misconduct

If you want to dismiss someone, there’s no specific process you must go through by law - as long as you do it fairly.

If a capability issue is linked to someone’s health, you should try as many ways as possible to help them do their job before dismissing them.

Disciplinary procedures

You should include examples of what you consider to be misconduct in your disciplinary rules.

Different disciplinary procedures are appropriate for different circumstances.

Employees have the right to be accompanied to all disciplinary meetings and to appeal to a manager. Keep notes of all meetings and give copies to the employee.

Misconduct

Misconduct can include things like persistent lateness or unauthorised absence from work.

To make sure the dismissal is fair when misconduct is not ‘serious’ or ‘gross’:

Arrange a meeting with the employee, telling them the reason for it. At the meeting, give them a chance to explain and issue a first written warning if you’re not satisfied with their reasons. In the warning, tell them how you expect them to improve and over what period - warn them that if they do not improve enough, you’ll give them a final written warning.

Hold a second meeting if their performance or behaviour has not improved enough by the deadline - give them a chance to explain and issue a final written warning if you’re not satisfied with their reasons. Revise the action plan with timescales for improvement and warn them that you’ll consider dismissal if there’s no improvement.

Hold a third meeting if their performance or behaviour is still not up to standard by these new deadlines. Warn them that dismissal is now possible. After the meeting - or appeal if there is one - decide whether to give the employee a further chance to improve, or dismiss them. You must tell the employee of your final decision, whatever it is.

Serious misconduct

You can issue a single ‘first and final’ written warning if the misconduct or underperformance is serious enough. Explain that not improving could lead to dismissal. ‘Serious enough’ includes if it’s likely to or has caused serious harm to the organisation itself.

Gross misconduct

Gross misconduct can include things like theft, physical violence, gross negligence or serious insubordination.

With gross misconduct, you can dismiss the employee immediately as long as you follow a fair procedure. You should investigate the incident and give the employee a chance to respond before deciding to dismiss them.

One-off incidents

An informal discussion may be enough to resolve the issue if the misconduct or underperformance was a one-off and the employee has a good disciplinary record.

Dismissals due to illness

Sometimes an employee may have to stop working because of long-term ill health. They may resign, or you may have to consider dismissing them.

Considering dismissing an employee

Dismissal is a last resort and you should consider as many ways as possible to help the employee back to work, including:

getting a medical report from their GP with the employee’s permission - they have the right to see the report before you do

arranging an occupational health assessment

work out whether or not they’re disabled and make any reasonable adjustments to help them do their job

If the employee cannot do their job because there are no reasonable adjustments that can be made, it may be fair for you to dismiss them, even if they’re disabled.

How to dismiss someone

During the dismissal procedure, make sure you act fairly and reasonably. You must treat the employee with sensitivity.

Your procedure should follow the advice set out in the Acas (Advisory, Conciliation and Arbitration Service) code of practice, or the Labour Relations Agency (LRA) code of practice for Northern Ireland.

If you do not follow the code and are taken to an employment or industrial tribunal, you may have to pay compensation.


Handling an employee's grievance

Overview

If your employee has a concern or problem that they haven’t been able to resolve informally, they may make a formal grievance complaint to you.

Businesses must have a written grievance procedure in place and share it with all employees. It must say how the process works and how long it takes.

After a hearing of the evidence, you should let the employee know your decision in writing. If they aren’t happy with the decision, they can appeal.

Grievance procedure

By law employers must set out a grievance procedure and share it in writing with all employees, eg in their statement of employment or staff handbook. It must include:

who the employee should contact about a grievance

how to contact this person

It should also:

say that if the problem can’t be resolved informally, there will be a meeting with the employee, called a grievance hearing

set out time limits for each stage of the process

identify who to contact if the normal contact person is involved in the grievance

explain how to appeal a grievance decision

state that employees can be accompanied in any meetings by a colleague or union representative

outline what happens if a grievance is raised during disciplinary action

You don’t have to include information about the grievance procedure in employment contracts. However, if you do, you must follow the procedure, or the employee could bring a breach of contract claim against you.

Acas Code of Practice

The Acas Code of Practice isn’t legally binding. However, an employment tribunal can reduce or increase any money awarded in a case by up to 25% if the code hasn’t been followed.

The grievance hearing

Preparing for the hearing

Before holding a hearing, employers should:

give the employee notice so that they can prepare their case

carry out a full investigation if necessary and take statements from any witnesses who cannot attend

make it clear that the employee can bring a colleague or union representative if they want to

arrange for another manager to attend to make sure that the hearing is conducted properly

arrange for someone to take notes

Delays

If the employee cannot attend the hearing (eg because they are ill), offer them a reasonable alternative date and time.

The employee can also suggest a different time for the hearing if the person accompanying them cannot attend. They must do this within 5 working days after you proposed the original meeting time.

You can make your decision without having a hearing if:

you have already rearranged the meeting, but the employee fails to attend

the employee is on long-term sick leave and unable to go to meetings in the near future (they can supply written information instead if they want to)

Employers' decisions and appeals

After the hearing

You should give the employee a copy of the meeting records. You may be able to leave out some information in certain circumstances (eg to protect a witness).

After you have decided the action to take, write to the parties involved, setting out:

your decision and the reasons behind it

the appeals process and deadline

If there are any delays during the appeal process, it’s important that you tell the employee as soon as possible.

Appeals

If the employee appeals, there should be another hearing to re-examine the decision. The process is the same as the original hearing but you should also look at:

the reasoning behind the appeal

any new evidence

If possible, the appeal should not be heard by the same person who held the original hearing.

After the appeal hearing, you should set out your decision in writing and state that this is the final outcome.


Making staff redundant

Overview

Redundancy is when you dismiss an employee because you no longer need anyone to do their job. This might be because your business is:

changing what it does

doing things in a different way, for example using new machinery

changing location or closing down

If you’ve been impacted by coronavirus (COVID-19), you can get funding to continue to pay your employees instead of making them redundant. This is known as furloughing.

For a redundancy to be genuine, you must demonstrate that the employee’s job will no longer exist.

Redundancies can be compulsory or non-compulsory. If you do have to make redundancies you can get help from Jobcentre Plus.

Employee rights

Employees have certain rights and may be entitled to redundancy pay if they’re made redundant.

All employees under notice of redundancy have the right to:

reasonable time off to look for a new job or arrange training

not be unfairly selected for redundancy

You should always take steps to avoid redundancies before dismissing staff.

Alternative employment

Employers must try to find suitable alternative employment within the organisation for employees they’ve made redundant.

Employees can try out an alternative role for 4 weeks (or more if agreed in writing) without giving up their right to redundancy pay.

Avoiding redundancies

You should take steps to avoid compulsory redundancies, for example by:

seeking applicants for voluntary redundancy or early retirement

seeking applications from existing staff to work flexibly

laying off self-employed contractors, freelancers etc

not using casual labour

restricting recruitment

reducing or banning overtime

filling vacancies elsewhere in the business with existing employees

short-time working or temporary lay-offs

Offers of alternative work

Even if you’ve selected someone for redundancy, you can still offer them alternative work.

For an offer to be valid:

it should be unconditional and in writing

it must be made before the employee’s current contract ends

it should show how the new job differs from the old

the job must actually be offered to the employee - they should not have to apply

the new job must start within 4 weeks of the old job ending

Employees who accept an offer of alternative work are allowed a 4-week trial period to see if the work is suitable. If you both agree that it is not, they can still claim redundancy pay.

The trial period can be longer than 4 weeks if you agree this in writing.

If you think the job is suitable but the employee refuses to take it, they might lose any redundancy pay entitlement.

Lay-offs and short-time working

You can lay off an employee (ask them to stay at home or take unpaid leave) when you temporarily cannot give them paid work - as long as the employment contract allows this.

Short-time working is when an employee works reduced hours or is paid less than half a week’s pay.

Laying off staff or short-time working can help avoid redundancies - but you have to agree this with staff first.

This could be in:

their employment contract

a national agreement for the industry

a collective agreement between you and a recognised trade union

National and collective agreements can only be enforced if they’re in the employee’s employment contract.

You may also be able to lay off an employee or put them on short-time working:

where you have clear evidence showing it’s been widely accepted in your organisation over a long period of time

if you agree with the employee to change their employment contract to allow them to be laid off or put on short-time working (this will not automatically give you the power to do this without their consent in the future)

Statutory guarantee payments

Employees are entitled to these if you do not provide them with a full day’s work during the time they’d normally be required to work.

The maximum payment is £30 a day for 5 days (£150) in any 3 months. If employees usually earn less than £30 a day, they’ll get their usual daily rate. For part-time workers, the rate is worked out proportionally.

Employees can claim a redundancy payment from you if the lay-off or short-time working runs for:

4 or more weeks in a row

6 or more weeks in a 13 week period, where no more than 3 are in a row

They must give you written notice in advance that they want to make a claim.

You do not have to pay if they’ll return to normal working hours within 4 weeks.

If you do not give guarantee pay to someone who’s entitled to it, they could take you to an employment tribunal.

There’s more advice on lay-offs and short-time working on the Acas (Advisory, Conciliation and Arbitration Service) website.

Non-compulsory redundancy

Voluntary redundancy

This is where you ask employees if they’d like to volunteer for redundancy.

You must have a fair and transparent selection process and tell employees they will not automatically be selected just because they applied.

Early retirement

This is where you offer employees incentives to retire early. It is used as an alternative to voluntary redundancy.

The offer must be made across the workforce - you cannot single out specific individuals.

You cannot force anyone into early retirement - it must be the employee’s choice.

Compulsory redundancy

If you decide you need to make compulsory redundancies, you must:

identify which employees will be made redundant

make sure you select people fairly - do not discriminate

Fair selection criteria

Fair reasons for selecting employees for redundancy include:

skills, qualifications and aptitude

standard of work and/or performance

attendance

disciplinary record

You can select employees based on their length of service (‘last in, first out’) but only if you can justify it. It could be indirect discrimination if it affects one group of people more than another.

Do not rely on length of service as your only selection criteria - this is likely to be age discrimination.

Unfair selection criteria

Some selection criteria are automatically unfair. You must not select an employee for redundancy based on any of the following reasons:

pregnancy, including all reasons relating to maternity

family, including parental leave, paternity leave (birth and adoption), adoption leave or time off for dependants

acting as an employee representative

acting as a trade union representative

joining or not joining a trade union

being a part-time or fixed-term employee

age, disability, gender reassignment, marriage and civil partnership, race, religion or belief, sex and sexual orientation

pay and working hours, including the Working Time Regulations, annual leave and the National Minimum Wage

You should always consult employees in a redundancy situation.

Redundancy consultations

If you do not consult employees in a redundancy situation, any redundancies you make will almost certainly be unfair and you could be taken to an employment tribunal.

You must follow ‘collective consultation’ rules if you’re making 20 or more employees redundant within any 90-day period at a single establishment.

There are no set rules to follow if there are fewer than 20 redundancies planned, but it’s good practice to fully consult employees and their representatives. An employment tribunal could decide that you’ve dismissed your staff unfairly if you do not.

Consultation does not have to end in agreement, but it must be carried out with a view to reaching it, including ways of avoiding or reducing the redundancies.

Collective consultation

Follow these steps.

You must notify the Redundancy Payments Service (RPS) before a consultation starts. The deadline depends on the number of proposed redundancies.

Consult with trade union representatives or elected employee representatives - or with staff directly if there are none.

Provide information to representatives or staff about the planned redundancies, giving representatives or staff enough time to consider them.

Respond to any requests for further information.

Give any affected staff termination notices showing the agreed leaving date.

Issue redundancy notices once the consultation is complete.

Notification

Notify RPS by filling in form HR1. Instructions on where to send it are on the form.

The deadline for notifying RPS depends on the number of proposed redundancies.

Number of proposed redundancies | When notification to RPS must be given

20 to 99 | 30 days before the first redundancy

100 or more | 45 days before the first redundancy

You can be fined an unlimited amount if you do not notify RPS.

Consultation

There’s no time limit on how long consultations last, but there is a minimum period before you can dismiss any employees.

Number of proposed redundancies | Minimum consultation period before dismissal

20 to 99 | 30 days

100 or more | 45 days

Information you must provide to representatives or staff

You must provide written details of:

the reasons for redundancies

the numbers and categories of employees involved

the numbers of employees in each category

how you plan to select employees for redundancy

how you’ll carry out redundancies

how you’ll work out redundancy payments

Further information

Download the guidance on how to manage collective redundancies from Advisory, Conciliation and Arbitration Service (Acas).

Giving staff notice

You must give staff notice and agree a leaving date once you’ve finished the redundancy consultations.

Give staff at least the statutory notice period, based on how long they have worked.

Length of service | Notice you must give

1 month to 2 years | At least a week

2 years to 12 years | A week’s notice for every year employed

12 or more years | 12 weeks

You can allow staff to leave earlier than the planned leaving date (for example without notice) by offering payment in lieu of notice.

Notice pay

You must give staff notice pay - based on their pay rate and notice period - or make a payment in lieu of notice.

Your employee’s notice pay is based on the average they earned per week over the 12 weeks before their notice period starts.

If your employee earned less than usual because you used the Coronavirus Job Retention Scheme to put them ‘on furlough’, you must work out their notice payments based on what they would have earned normally.

Pay in lieu of notice

If you have included a payment in lieu of notice clause in the employment contract, you can end your staff’s employment with no notice. This lets you make a payment to cover the notice period they would have worked.

These payments must have tax and National Insurance deducted.

When you make payments in lieu of notice, you still have to pay staff the basic pay they would have got during the notice period. You also have to pay pension, private health care insurance or other contributions if it’s in the employee’s contract.

Redundancy pay

Employees you make redundant might be entitled to redundancy pay - this is called a ‘statutory redundancy payment’.

To be eligible, an individual must:

be an employee working under a contract of employment

have at least 2 years’ continuous service

have been dismissed, laid off or put on short-time working - those who opted for early retirement do not qualify

You must make the payment when you dismiss the employee, or soon after.

A redundant employee also has the right to a written statement setting out the amount of redundancy payment and how you worked it out.

Statutory redundancy pay rates

These are based on an employee’s age and length of employment and are counted back from the date of dismissal.

Employees get:

1.5 weeks’ pay for each full year of employment after their 41st birthday

a week’s pay for each full year of employment after their 22nd birthday

half a week’s pay for each full year of employment up to their 22nd birthday

Length of service is capped at 20 years.

Your employee’s weekly pay is the average they earned per week over the 12 weeks before the day they got their redundancy notice.

If your employee earned less than usual because you used the Coronavirus Job Retention Scheme to put them ‘on furlough’, you must work out their redundancy payments based on what they would have earned normally.

Weekly pay is capped at £544. The maximum amount of statutory redundancy pay is £16,320.

Statutory redundancy pay rates may be different in Northern Ireland.

You can give your staff extra redundancy pay if you want to, or have a qualifying period of less than 2 years.

You can use the redundancy pay calculator to work out payments.

If you do not pay

If you fail to pay redundancy pay or if an employee disagrees with the amount, they have 3 months from the date their employment ended to make a claim for payment to an employment tribunal.

If an employee does not claim in time, a tribunal still has 6 months to decide whether or not they should get a payment.

If you have financial difficulties

If your business would become insolvent as a result of making the statutory redundancy payments, the Insolvency Service’s Redundancy Payments Service (RPS) may be able to help.

You’d have to repay any debt as soon as possible. Email the Redundancy Payments Service for more information. Include all of the following in your email:

your name

whether you’re the employer

whether you should be the main point of contact

the name of your business

your business address

number of redundancies

Tax

Employees who’ve been made redundant only pay tax on payments over £30,000. They do not pay any National Insurance.

Tax and National Insurance are deducted from other termination payments, for example payment in lieu of holiday or notice.

Getting help

If you have to make redundancies, Jobcentre Plus can give you and your employees support and advice through its Rapid Response Service.

Support could include:

helping people facing redundancy to write CVs and find jobs

providing general information about benefits

helping people to find the right training and learn new skills

helping with costs like travel to work expenses

Jobcentre Plus may also provide on-site support for large scale redundancies.

In Scotland, Rapid Response Service support is delivered through Partnership Action for Continuing Employment (PACE) - there’s more information on the Skills Development Scotland website.

In Wales, the service is delivered by the ReAct scheme.

Acas has an online redundancy helpline.

How to get help

To find out how your business can use the Rapid Response Service, email rrs.enquiries@dwp.gov.uk and include:

your contact details

the town(s) your business is based in (including postcodes)

the location(s) of the redundancies


Solve a workplace dispute

Overview

Problems with your employer usually fall into one of two categories:

grievances - when you raise your concerns, problems or complaints with your employer

disciplinaries - when your employer has concerns about your work, conduct or absence

Explain your concern to your manager to see if you can sort out any problems informally. You may find it helpful to suggest what you would like them to do to solve your problem.

Your employer should discuss any disciplinary issues with you informally first. These issues could lead to formal disciplinary action, including dismissal in more serious or repetitive cases.

Right to be accompanied

You have the right to be accompanied to grievance or disciplinary meetings (and any appeals) by either a:

colleague or trade union representative

family member or Citizens Advice Bureau worker if this allowed - check your employment contract, company handbook or human resources intranet site

Formal procedures

You can make a formal grievance complaint or face formal disciplinary action if you were not able to resolve your problem informally.

Grievances

You can make a formal grievance complaint if you’ve tried solving a problem by talking to your manager but you’re not satisfied.

Your employer should put their grievance procedure in writing. You should be able to find this in your:

company handbook

human resources (HR) or personnel manual

HR intranet site

employment contract

Your employer’s grievance procedure should include these steps:

writing a letter to your employer setting out the details of your grievance

a meeting with your employer to discuss the issue

the ability to appeal your employer’s decision

Read the Acas guide on discipline and grievances at work for more information.

Disciplinary action

You might face disciplinary action if your employer has decided they have a serious issue with you or your work.

Your employer should put their disciplinary procedure in writing and it should contain:

your employer’s disciplinary procedure rules

what performance and behaviour might lead to disciplinary action

what action your employer might take and your right to appeal

Suspension from work

If you are facing discipline over a serious issue, your employer may be able to suspend you during the time leading up to a disciplinary meeting.

Check your employment contract, company handbook or HR intranet site to see if you’re entitled to be paid when suspended.

Using the Acas Code of Practice

The result of your claim could be affected if either you or your employer do not follow the Acas Code of Practice on disciplinary and grievance procedures and you go to an employment tribunal.

In this situation a tribunal can adjust the amount of compensation awarded by up to 25%.

Appeals

You can appeal the result of a grievance or disciplinary procedure. Your appeal must be in writing.

Appeals procedure

Your employer’s grievance and disciplinary procedures will set out:

who you should submit your appeal to

the time limit within which an appeal must be made

any meetings that will be held

how the appeal meeting will be run

You have the right to be accompanied during any appeal meetings.

Mediation, conciliation and arbitration

You can get help from a third-party to solve disputes between you and your employer. The main ways you can do this are through:

mediation

conciliation

arbitration

Mediation

Mediation is when an independent and impartial third party discusses a problem with you and your employer (or between you and another employee) to try and find a solution. It’s often used after informal discussions have not come up with a solution.

Mediation is voluntary and the mediator cannot force you or your employer to accept a solution. Both you and your employer must agree on the way to solve the dispute.

Mediation should not be used to solve problems that have to be formally investigated (for example, harassment or discrimination).

You can also find a mediation service.

Read the Acas guide on mediation for more information.

Conciliation

Conciliation is similar to mediation but is normally used when:

you believe you may be entitled to make a claim to an employment tribunal

you have already made a claim to an employment tribunal

Conciliation is voluntary - both you and your employer must agree to it before it happens.

Acas can offer a free service to help to settle a claim or potential claim.

Read the Acas guide on conciliation for more information.

Arbitration

Arbitration is when a third-party makes a firm decision on a case after considering all the issues.

You and your employer must agree to an arbitrator’s decision being legally binding. If you do not agree, you can still take a case to an employment tribunal.

Read the Acas guide on arbitration for more information.

Tribunals

If you have been unable to solve a problem between you and your employer, you may have to go to an employment tribunal.

At the tribunal, you and your employer will present your cases, answer questions and the tribunal will make a decision.

Help and advice

Call Acas, contact Citizen’s Advice or speak to your trade union or staff representative for help and advice.


Taking disciplinary action against an employee

Overview

You should have written disciplinary rules and procedures to deal with employee performance and conduct and you must tell your staff about them.

Your rules must say what is acceptable and unacceptable behaviour in the workplace and what action you will take if the rules are broken.

The rules should follow the Acas code of practice on disciplinary and grievance procedures.

Not following the code is not illegal. However, if someone wins an employment tribunal against you and you did not follow the code, then their award could be up to 25% more.

Acas guide to discipline and grievances

The Acas guide to discipline and grievances at work gives more information for employers about taking disciplinary action.

Acas Helpline

The Acas Helpline has further advice on disciplinary issues.

Practical training courses

Acas also runs practical training courses on workplace discipline.

Writing disciplinary proceedings

Your disciplinary procedures should follow the Acas code of practice.

The exact rules will depend on your organisation, but could cover things like:

acceptable and unacceptable behaviour

absence and timekeeping

health and safety

use of phones and the internet

You cannot normally discipline or dismiss an employee for whistleblowing.

Gross misconduct

Your disciplinary rules should give examples of what will be treated as gross misconduct. This is misconduct judged so serious that it’s likely to lead to dismissal without notice, for example fraud, theft and physical violence.

Telling employees about disciplinary rules

Your disciplinary rules must be in your statement of employment or clearly written elsewhere, such as in a staff handbook.

The rules should clearly say when someone might face disciplinary action and what that action could be.

You must also give the name of someone they should appeal to if they’re unhappy about a disciplinary decision.

If you do not provide this information and an employee then wins an employment tribunal claim against you, they could be awarded 2 to 4 weeks’ pay.

Disciplinary procedures and contracts

If you make your disciplinary procedures part of an employment contract then the employee could make a breach of contract claim against you if you do not follow your procedures.

Example letters and forms

Acas has a number of sample letters and forms for disciplinary proceedings on its website.

Disciplinary investigations and hearings

The law does not say exactly how you should investigate disciplinary issues or hold disciplinary meetings.

However, the Acas guide to discipline and grievances at work has lots of practical advice about running disciplinary proceedings professionally and fairly.

The suggested disciplinary process

The Acas guidance suggests that your disciplinary process should follow the following format:

A letter telling your employee the issue and inviting them to a disciplinary hearing.

A meeting with your employee to discuss the issue - they should have the right to be accompanied.

A letter to your employee saying what action you are going to take. This should be sent as soon as practically possible.

Your employee should than have a chance to appeal your decision.

Disciplinary decisions

Disciplinary decisions could be anything that could resolve the problem.

This could include:

no action

written warning

final warning

demotion

dismissal

mediation with a co-worker

Appeals

An employee has the right to appeal against a decision made after a disciplinary hearing.

You should tell them about this when you give them written notice of your decision, and should give them a deadline to tell you they want to appeal.

Your employee’s statement of terms and conditions of employment must legally include the person they can apply to if they want to appeal a disciplinary decision. It must also explain how to do this.

If the employee does decide to appeal, you should try to hold the appeal hearing as soon as possible.

You should follow the Acas code of practice on disciplinary and grievance procedures when dealing with appeals. Otherwise, if someone wins an employment tribunal against you their award could be higher.


Whistleblowing for employees

What is a whistleblower

You’re a whistleblower if you’re a worker and you report certain types of wrongdoing. This will usually be something you’ve seen at work - though not always.

The wrongdoing you disclose must be in the public interest. This means it must affect others, for example the general public.

As a whistleblower you’re protected by law - you should not be treated unfairly or lose your job because you ‘blow the whistle’.

You can raise your concern at any time about an incident that happened in the past, is happening now, or you believe will happen in the near future.

Who is protected by law

You’re protected if you’re a worker, for example you’re:

an employee, such as a police officer, NHS employee, office worker, factory worker

a trainee, such as a student nurse

an agency worker

a member of a Limited Liability Partnership (LLP)

Get independent advice if you’re not sure you’re protected, for example from Citizens’ Advice.

A confidentiality clause or ‘gagging clause’ in a settlement agreement is not valid if you’re a whistleblower.

Complaints that count as whistleblowing

You’re protected by law if you report any of the following:

a criminal offence, for example fraud

someone’s health and safety is in danger

risk or actual damage to the environment

a miscarriage of justice

the company is breaking the law, for example does not have the right insurance

you believe someone is covering up wrongdoing

Complaints that do not count as whistleblowing

Personal grievances (for example bullying, harassment, discrimination) are not covered by whistleblowing law, unless your particular case is in the public interest.

Report these under your employer’s grievance policy.

Contact the Advisory, Conciliation and Arbitration Service (Acas) for help and advice on resolving a workplace dispute.

Who to tell and what to expect

You can tell your employer - they may have a whistleblowing policy that tells you what to expect if you report your concern to them. You can still report your concern to them if they do not have a policy.

There are other options if you do not want to report your concern to your employer, for example you can get legal advice from a lawyer, or tell a prescribed person or body.

If you tell a prescribed person or body, it must be one that deals with the issue you’re raising, for example a disclosure about wrongdoing in a care home can be made to the Care Quality Commission.

There’s a different whistleblowing process in Northern Ireland.

Making your claim anonymously or confidentially

You can tell your employer or a prescribed person anonymously but they may not be able to take the claim further if you have not provided all the information they need.

You can give your name but request confidentiality - the person or body you tell should make every effort to protect your identity.

If you report your concern to the media, in most cases you’ll lose your whistleblowing law rights.

What your employer or a prescribed person will do

Your employer or the prescribed person will listen to your concern and decide if any action is needed. You may be asked for further information.

You must say straight away if you do not want anyone else to know it was you who raised the concern.

You will not have a say in how your concern is dealt with.

Your employer or the prescribed person can keep you informed about the action they’ve taken, but they cannot give you much detail if they have to keep the confidence of other people.

A prescribed person cannot help you with your relationship with your employer.

If you’re not satisfied with how your employer dealt with your concern

Tell someone else (for example a more senior member of staff) or a prescribed person or body if you believe your concern was not taken seriously or the wrongdoing is still going on.

Contact the Advisory, Conciliation and Arbitration Service (Acas), the whistleblowing charity Protect or your trade union for more guidance.

If you’re treated unfairly after whistleblowing

You can take a case to an employment tribunal if you’ve been treated unfairly because you’ve blown the whistle.

You can get further information from the Advisory, Conciliation and Arbitration Service (Acas), Citizens’ Advice, the whistleblowing charity Protect or your trade union.

If you reported your concern anonymously, you may find it harder to argue that your unfair treatment was as a result of your whistleblowing.

You must raise any claim of unfair dismissal within 3 months of your employment ending.

You must notify Acas if you want to take your case to an employment tribunal.