Workplace pensions

About workplace pensions

A workplace pension is a way of saving for your retirement that’s arranged by your employer.

Some workplace pensions are called ‘occupational’, ‘works’, ‘company’ or ‘work-based’ pensions.

How they work

A percentage of your pay is put into the pension scheme automatically every payday.

In most cases, your employer also adds money into the pension scheme for you. You may also get tax relief from the government.

Joining a workplace pension

All employers must provide a workplace pension scheme. This is called ‘automatic enrolment’.

Your employer must automatically enrol you into a pension scheme and make contributions to your pension if all of the following apply:

you’re classed as a ‘worker’

you’re aged between 22 and State Pension age

you earn at least £10,000 per year

you usually (‘ordinarily’) work in the UK (read the detailed guidance if you’re not sure)

When your employer does not have to automatically enrol you

Your employer usually does not have to automatically enrol you if you do not meet the previous criteria or if any of the following apply:

you’ve already given notice to your employer that you’re leaving your job, or they’ve given you notice

you have evidence of your lifetime allowance protection (for example, a certificate from HMRC)

you’ve already taken a pension that meets the automatic enrolment rules and your employer arranged it

you get a one-off payment from a workplace pension scheme that’s closed (a ‘winding up lump sum’), and then leave and rejoin the same job within 12 months of getting the payment

more than 12 months before your staging date, you left (‘opted out’) of a pension arranged through your employer

you’re from an EU member state and are in a EU cross-border pension scheme

you’re in a limited liability partnership

you’re a director without an employment contract and employ at least one other person in your company

You can usually still join their pension if you want to. Your employer cannot refuse.

If your income is low

Your employer does not have to contribute to your pension if you earn these amounts or less:

£520 a month

£120 a week

£480 over 4 weeks

What happens when you’re automatically enrolled

Your employer must write to you when you’ve been automatically enrolled into their workplace pension scheme. They must tell you:

the date they added you to the pension scheme

the type of pension scheme and who runs it

how much they’ll contribute and how much you’ll have to pay in

how to leave the scheme, if you want to

how tax relief applies to you

Delaying your enrolment date

Your employer can delay the date they must enrol you into a pension scheme by up to 3 months.

In some cases they may be able to delay longer if they’ve chosen either:

a ‘defined benefit’ pension

a ‘hybrid’ pension (a mixture of defined benefit and defined contribution pensions) that allows you to take a defined benefit pension

Your employer must:

tell you about the delay in writing

let you join in the meantime if you ask to

What your employer cannot do

Your employer cannot:

unfairly dismiss or discriminate against you for being in a workplace pension scheme

encourage or force you to opt out

What you, your employer and the government pay

The amount you and your employer pay towards the pension depends on:

what type of workplace pension scheme you’re in

whether you’ve been automatically enrolled in a workplace pension or you’ve joined one voluntarily (‘opted in’)

Use the Money Advice Service’s contributions calculator to work out how much you and your employer will put in.

Tax relief

The government will usually add money to your workplace pension in the form of tax relief if both of the following apply:

you pay Income Tax

you pay into a personal pension or workplace pension

Even if you do not pay Income Tax, you’ll still get an additional payment if your pension scheme uses ‘relief at source’ to add money to your pension pot.

If you’ve been automatically enrolled

You and your employer must pay a percentage of your earnings into your workplace pension scheme.

How much you pay and what counts as earnings depend on the pension scheme your employer has chosen. Ask your employer about your pension scheme rules.

In most automatic enrolment schemes, you’ll make contributions based on your total earnings between £6,240 and £50,270 a year before tax. Your total earnings include:

salary or wages

bonuses and commission

overtime

statutory sick pay

statutory maternity, paternity or adoption pay

Workplace pension contributions

| The minimum your employer pays | You pay | Total minimum contribution

From April 2019 | 3% | 5% | 8%

These amounts could be higher for you or your employer because of your pension scheme rules. They’re higher for most defined benefit pension schemes.

In some schemes, your employer has the option to pay in more than the legal minimum. In these schemes, you can pay in less as long as your employer puts in enough to meet the total minimum contribution.

If you’ve voluntarily enrolled in a workplace pension

Your employer must contribute the minimum amount if you earn more than:

£520 a month

£120 a week

£480 over 4 weeks

They do not have to contribute anything if you earn these amounts or less.

How your take-home pay changes

Joining a workplace pension scheme means that your take-home income will be reduced. But this may:

mean you’re entitled to tax credits or an increase in the amount of tax credits you get (although you may not get this until the next tax year)

mean you’re entitled to an income-related benefit or an increase in the amount of benefit you get

reduce the amount of student loan repayments you need to make

Payments using salary sacrifice

You and your employer may agree to use ‘salary sacrifice’ (sometimes known as a ‘SMART’ scheme).

If you do this, you give up part of your salary and your employer pays this straight into your pension. In some cases, this will mean you and your employer pay less tax and National Insurance.

Ask your employer if they use salary sacrifice.

Protection for your pension

How your pension is protected depends on the type of scheme.

Defined contribution pension schemes

If your employer goes bust

Defined contribution pensions are usually run by pension providers, not employers. You will not lose your pension pot if your employer goes bust.

If your pension provider goes bust

If the pension provider was authorised by the Financial Conduct Authority and cannot pay you, you can get compensation from the Financial Services Compensation Scheme (FSCS).

Trust-based schemes

Some defined contribution schemes are run by a trust appointed by the employer. These are called ‘trust-based schemes’.

You’ll still get your pension if your employer goes out of business. But you might not get as much because the scheme’s running costs will be paid by members’ pension pots instead of the employer.

Defined benefit pension schemes

Your employer is responsible for making sure there’s enough money in a defined benefit pension to pay each member the promised amount.

Your employer cannot touch the money in your pension if they’re in financial trouble.

You’re usually protected by the Pension Protection Fund if your employer goes bust and cannot pay your pension.

The Pension Protection Fund usually pays:

100% compensation if you’ve reached the scheme’s pension age

90% compensation if you’re below the scheme’s pension age

Fraud, theft or bad management

If there’s a shortfall in your company’s pension fund because of fraud or theft, you may be eligible for compensation from the Fraud Compensation Fund.

Contact one of the following organisations if you want to make a complaint about the way your workplace pension scheme is run:

the Pensions Advisory Service

the Pensions Ombudsman

Managing your pension

Your pension provider will send you a statement each year to tell you how much is in your pension pot. You can also ask them for an estimate of how much you’ll get when you start taking your pension pot.

What you see on your payslip

You do not need to do anything to get tax relief at the basic rate on your pension contributions. There are 2 types of arrangements:

net pay

relief at source

Check with your employer or pension provider which arrangement your workplace pension uses. This determines what you’ll see on your payslip.

‘Net pay’

Your employer takes your contribution from your pay before it’s taxed. You only pay tax on what’s left. This means you get full tax relief, no matter if you pay tax at the basic, higher or additional rate.

The amount you’ll see on your payslip is your contribution plus the tax relief.

You will not get tax relief if you do not pay tax, for example because you earn less than the tax threshold.

‘Relief at source’

Your employer takes your pension contribution after taking tax and National Insurance from your pay. However much you earn, your pension provider then adds tax relief to your pension pot at the basic rate.

With ‘relief at source’, the amount you see on your payslip is only your contributions, not the tax relief.

You may be able to claim money back if:

you pay higher or additional rate Income Tax

you pay higher or top rate Income Tax in Scotland

Tracing lost pensions

The Pension Tracing Service could help you find pensions you’ve paid into but lost track of.

Nominate someone to get your pension if you die

You may be able to nominate (choose) someone to get your pension if you die before reaching the scheme’s pension age. You can do this when you first join the pension or by writing to your provider.

Ask your pension provider if you can nominate someone and what they’d get if you die, for example regular payments or lump sums. Check your scheme’s rules about:

who you can nominate - some payments can only go to a dependant, for example your husband, wife, civil partner or child under 23

whether anything can change what the person gets, for example when and how you start taking your pension pot, or the age you die

You can change your nomination at any time. It’s important to keep your nominee’s details up to date.

Sometimes the pension provider can pay the money to someone else, for example if the person you nominated cannot be found or has died.

Taking your pension

Most pension schemes set an age when you can take your pension, usually between 60 and 65. In some circumstances you can take your pension early. The earliest is usually 55.

Some companies offer to help you get money out of your pension before you’re 55. Taking your pension early in this way could mean you pay tax of up to 55%.

If the amount of money in your pension pot is quite small, you may be able to take it all as a lump sum. You can take 25% of it tax free, but you’ll pay Income Tax on the rest.

How you get money from your pension depends on the type of scheme you’re in.

Defined contribution pension schemes

You’ll need to decide how to take your money if you’re in a defined contribution pension scheme.

Defined benefit pension schemes

You may be able to take some money as a tax-free lump sum if you’re in a defined benefit pension scheme - check with your pension provider. You’ll get the rest as a guaranteed amount each year.

Changing jobs and taking leave

If you change jobs

Your workplace pension still belongs to you. If you do not carry on paying into the scheme, the money will remain invested and you’ll get a pension when you reach the scheme’s pension age.

You can join another workplace pension scheme if you get a new job.

If you do, you might be able to:

carry on making contributions to your old pension

combine the old and new pension schemes

Ask your pension providers about your options.

If you move jobs but pay into an old pension, you may not get some of that pension’s benefits - check if they’re only available to current workers.

If you worked at your job for less than 2 years before you left

If you were in a defined benefit pension scheme for less than 2 years, you might be able to either:

get a refund on what you contributed

transfer the value of its benefits to another scheme (a ‘cash sum transfer’)

This depends on the type of defined benefit scheme and its rules. Check with your employer or the pension scheme provider.

Paid leave

During paid leave, you and your employer carry on making pension contributions.

The amount you contribute is based on your actual pay during this time, but your employer pays contributions based on the salary you would have received if you were not on leave.

Maternity and other parental leave

You and your employer will continue to make pension contributions if you’re getting paid during maternity leave.

If you’re not getting paid, your employer still has to make pension contributions in the first 26 weeks of your leave (‘Ordinary Maternity Leave’). They have to carry on making contributions afterwards if it’s in your contract. Check your employer’s maternity policy.

Unpaid leave

You may be able to make contributions if you want to - check with your employer or the pension scheme provider.

If you become self-employed or stop working

You may be able to carry on contributing to your workplace pension - ask the scheme provider.

You could use the National Employment Saving Trust (NEST) - a workplace pension scheme that working self-employed people or sole directors of limited companies can use.

You could set up a personal or stakeholder pension.

You can get help with your workplace pension options.

If you want to leave your workplace pension scheme

What you do if you want to leave a workplace pension depends on whether you’ve been ‘automatically enrolled’ in it or not.

If you have not been automatically enrolled

Check with your employer - they’ll tell you what to do.

If you’ve been automatically enrolled

Your employer will have sent you a letter telling you that you’ve been added to the scheme.

You can leave (called ‘opting out’) if you want to.

If you opt out within a month of your employer adding you to the scheme, you’ll get back any money you’ve already paid in.

You may not be able to get your payments refunded if you opt out later - they’ll usually stay in your pension until you retire.

You can opt out by contacting your pension provider. Your employer must tell you how to do this.

Reducing your payments

You may be able to reduce the amount you contribute to your workplace pension for a short time. Check with both your employer and your pension provider to see if you can do this and how long you can do it for.

Opting back in

You can do this at any time by writing to your employer. They do not have to accept you back into their workplace scheme if you’ve opted in and then opted out in the past 12 months.

Rejoining the scheme automatically

Your employer will automatically re-enrol you in the scheme. They must do this either every 3 years (from the date you first enrolled), or they can choose to do it sooner. They’ll write to you when they do this.

When you do not rejoin automatically

If you no longer qualify for the scheme, you will not be automatically re-enrolled.

If you chose to leave the scheme in the 12 months before the date you would have been re-enrolled, your employer does not have to automatically re-enrol you. But they can choose to re-enrol you.

Get help

For questions about the specific terms of your workplace pension scheme, talk to your pension provider or your employer.

You can get free, impartial information about your workplace pension options from:

the Money Advice Service

the Pensions Advisory Service

Pension Wise if you’re in a defined contribution pension scheme

You can get impartial advice about workplace pensions from an independent financial adviser. You’ll usually have to pay for the advice.

For general questions on workplace pensions contact the DWP Workplace Pension Information Line.

Only use the information line if you’re a worker - employers should contact The Pensions Regulator.

Problems with being ‘automatically enrolled’

Contact the The Pensions Regulator if you have concerns about the way your employer is dealing with automatic enrolment.

The Pensions Advisory Service may also be able to help you.

If you’re already paying into a personal pension

Check whether it’s better for you to:

carry on with just your personal pension

stop paying into your personal pension and join your workplace pension

keep paying into both

If you’re saving large amounts in pensions

You may have to pay a tax charge if your total savings in workplace pensions and any other personal pension scheme go above your:

lifetime allowance - £1,055,000

annual allowance - usually the lowest out of £40,000 or 100% of your annual income

If you start taking your pension pot your annual allowance could drop to as low as £4,000.

If your pension scheme is closing

This can happen if your employer decides they do not want to use a scheme anymore or they can no longer pay their contributions. What happens to the money you paid in depends on the pension scheme you’ve joined.

If you’ve been automatically enrolled, your employer cannot close a pension scheme without automatically enrolling you into another one.

If you’re getting a divorce

You and your spouse or partner will have to tell the court the value of each of your pension pots. You then have different options to work out what happens to your pension when you get a divorce.


Changing an employment contract

Getting agreement

Usually, the employer and employee both need to agree to any contract changes. But an employee can insist on a change if they have a legal right to it.

Employers

You must get an employee’s agreement if you want to make changes to their contract.

You should:

consult or negotiate with employees or their representatives (for example from a trade union or staff association)

explain the reasons for changes

listen to alternative ideas from employees

You may also want to talk with workers, asking them about their future plans. With older employees this can include talking about their thoughts on retirement and their options for staying in the job, for example changes to their role, hours or working pattern.

Employees

Explain to your employer why you want to make the changes. You can insist on a change if it’s covered by a statutory right - for example not working on a Sunday.

Making changes

Once employers have agreed on changes with their staff, they need to:

update the terms of their employees’ ‘written statement’ of employment conditions

write to their employees within a month to tell them exactly what has changed

If an employer changes terms and conditions that are not in the written statement (for example the right to sick leave), they should tell their employees where to find information about the change. This could be in a company handbook, noticeboard or intranet site.

Collective agreements

Employers must write to their staff to let them know about any changes to collective agreements with trade unions or staff associations.

These changes might affect the terms of employees’ written statements, including pay and working hours, whether or not they’re a member of the union or staff association.

Flexibility clauses

Flexibility clauses are terms in a contract that give employers the right to change some conditions of employment, for example relocation.

Employers can only use flexibility clauses to make reasonable changes.

Changes of employer

If someone starts working for a different employer, they’ll normally have to be given a new written statement within 2 months.

However, if the name of a business changes or there’s a new employer but no other changes in terms and conditions, the employer does not need to issue a new written statement. They still need to write to their staff about the changes within a month.

Disciplinary measures

Sometimes changes to an employee’s terms and conditions, like a demotion, can happen as a result of a disciplinary measure.

Employers should make sure the staff handbook or intranet site contains information about how this could happen in the section dealing with disciplinary procedures.

Dealing with problems

Problems can arise if:

an employer tries to change a contract without agreement, or re-employs someone on new terms and conditions

there is a breach of contract where one of the terms in a contract is broken (for example an employer does not pay agreed wages or employees do not work agreed hours)

Solving disputes

Employers and their staff should try to solve disputes about contract changes by talking informally or through mediation.

Employees can also get advice from their trade union representative (if they’re a member of a union), Citizen’s Advice or Acas (Advisory, Conciliation and Arbitration Service). In Northern Ireland, they can get advice from the Labour Relations Agency (LRA) .

If the problem cannot be solved, employers or employees may have the right to take legal action. It’s important to get advice first because legal action can be expensive. Trade union members may be able to get legal advice from their union.

Making a change without agreement

If an employer makes a change to a contract without getting agreement (including by using flexibility clauses unreasonably), employees may:

have the right to refuse to work under the new conditions

say that they’re working any new terms under protest, and are treating the change as a breach of contract

resign and claim constructive dismissal

be able to take a case to an employment tribunal

In Northern Ireland an employment tribunal is known as an ‘industrial tribunal’.

If an employee disagrees with new terms and conditions but does not say or do anything, this may count as agreeing to the changes.

Re-employment on new terms and conditions

Employers may, as a last resort, end a contract and re-employ someone on new terms and conditions.

Employers who are dismissing employees must follow the legally required:

redundancy procedure in England, Wales and Scotland

statutory minimum dismissal in Northern Ireland

If an employer does dismiss and re-employ someone, they may be able to take a case to a tribunal and claim:

breach of contract

unfair dismissal

Breach of contract claims

If an employee claims breach of contract and they cannot solve things informally with their employer, they may be able to take their case to a civil court or an employment tribunal (or an industrial tribunal in Northern Ireland).

Their employer may be able to make a counter-claim.

Claims and counter-claims can only go to a tribunal if they:

are related to an employment contract issue

still have not been solved when the employee ends their employment

The claim or counter-claim cannot be related to a personal injury, or certain types of contract term like intellectual property rights.

Time limits

Usually, employees must make a claim to a tribunal within 3 months of ending their employment. The employer gets 6 weeks from receiving a copy of the claim to decide whether to make a counter-claim.

Compensation limits

If the tribunal agrees with the employee’s claim, they may award compensation. This can only be for financial loss (for example, non-payment of wages) up to a maximum of £25,000.


Your rights as an agency worker

When you're an agency worker

You’re an agency worker if you have a contract with an agency but you work temporarily for a hirer. Agencies can include recruitment agencies, for example ‘temp agencies’.

You’re also an agency worker if you look for work through entertainment and modelling agencies.

You’re not an agency worker if you use an agency to find permanent or fixed-term employment. Check with the company that hired you.

Contact ACAS if you’re unsure if you’re an agency worker.

Fees

Recruitment agencies cannot charge you a fee for finding or trying to find you work.

They can charge you for certain services, for example CV writing, training or transport. You have the right to cancel these as long as you give notice.

If any agency offers you services it:

must give you full written details of the fee and conditions before charging you - including details of your right to cancel and the notice period

cannot make you use these services as a condition for finding you work

There are different rules for entertainment and modelling agencies.

When you want to cancel a service

You can cancel paid services without a penalty. You must give a minimum of:

10 working days’ written notice to the agency to cancel living accommodation

5 working days’ notice for all other services, such as training courses

You can complain to Acas if you think your agency has unfairly charged you or it will not refund you during the notice period.

What your agency must give you

Your agency must give you information about the work they’re trying to find you.

Before you’re offered a job

Before looking for work for you, your agency must give you:

a key information document

written terms of engagement - often known as a contract

Key information document

The key information document is a short explanation of how you’ll be paid and what deductions will be applied.

It must include:

the minimum rate of pay you can expect

a sample payslip giving an estimate of your take home pay after things like National Insurance, Income Tax or private healthcare

who is paying you

if you have any fees to pay

if you’re entitled to any benefits

Your agency does not have to give you a key information document if you’ve already agreed terms of engagement with them before 6 April 2020.

Terms of engagement

The written terms of engagement should include:

whether you’re employed under a contract for services or a contract of employment

your notice period

your pay

your holiday entitlement

An agency cannot change your terms and conditions without telling you. If you agree to changes, you must be given a new document with the full details of the changes and the date they changed.

An agency cannot give information about you to any third parties (including current employers or hirers) without your permission.

When you’re offered a job

The agency must give you a written statement that tells you:

your start date

how long the contract is likely to last

the type of work

about any expenses you may have to pay

the location

your hours

about any health and safety risks

about any experience, training or qualifications needed for the role

Equal treatment

From the day you start work you have a worker’s employment rights.

You also have the same rights as your permanent colleagues to use any shared facilities and services provided by your employer, for example:

a canteen or food and drinks machines

a workplace creche or mother and baby room

car parking or transport services, like a local pick-up service or transport between sites

Rights after 12 weeks

After 12 weeks in the job you qualify for the same rights as someone employed directly. This is known as ‘equal treatment’.

Your rights include:

‘equal pay’ - the same pay as a permanent colleague doing the same job

automatic pension enrolment

paid annual leave

How to count your 12 week period

Start counting your 12 week qualifying period from your first day at work.

You do not have to be at work for 12 weeks in a row - some types of leave count and there can be breaks.

Do not count days on sick leave or a break

The qualifying period will pause for sick leave or breaks. Do not count the days when:

you take a break of 6 weeks or less

you’re on leave due to sickness or injury for up to 28 weeks

you take annual leave you’re entitled to

the workplace closes, for example for Christmas or industrial action

you’re on jury service for up to 28 weeks

Count time off for pregnancy, paternity or adoption

Your 12 week qualifying period will continue through time off you have for:

pregnancy and up to 26 weeks after childbirth

adoption leave

paternity leave

If your leave is more than 12 weeks you’ll qualify for equal treatment when you return to work.

Start from zero for a new job or role

Your 12 weeks will start again if you:

get a new job at a different workplace

have a break of more than 6 weeks between jobs at the same workplace

stay at your workplace but take a new role that’s ‘substantively different’

A substantively different role is one that’s completely new, different work. It could be a combination of different:

skills, or requiring new training

pay rate

location

working hours

Pay

You’re entitled to the National Minimum Wage for all the hours you work, even if you have not recorded them on a timesheet.

After 12 weeks you’re entitled to be paid the same as a permanent employee doing the same job.

If your agency withholds your pay

Your agency can delay paying you while they get proof of the hours you worked, but only for a reasonable period of time.

Your agency cannot refuse to pay you because your hirer’s unhappy with your work - this is a contractual issue between your agency and the hirer.

You can make a claim to an employment tribunal if your agency is refusing to pay you.

If you’ve opted out of the right to equal pay

Your agency should contact you to explain that after 12 weeks you’re entitled to the same pay as a permanent employee doing the same job.

Maternity rights

You may be able to get Statutory Maternity Pay, but you cannot get Statutory Maternity Leave.

As an agency worker, you have employee’s pregnancy rights after working in your role for 12 weeks.

It’s illegal to discriminate against you on the grounds that:

you’re pregnant

you’ve given birth in the last 6 months

you’re breastfeeding

It’s discrimination if your:

agency refuses to place you in a job

hirer refuses to hire you

job was terminated because you’re pregnant

agency refuses to keep you on its books

agency offers you only short jobs and gives longer ones to other agency workers

hirer will not let you come back after having leave due to maternity

Contact Acas if you believe you’ve been discriminated against.

If there’s a risk to your health

Your hirer should make reasonable adjustments so you can do your job. If this isn’t possible your agency must find you alternative work or pay you at the same rate for the expected length of your contract.

Antenatal care

After 12 weeks in the job you can get paid time off to go to ‘antenatal care’ if you cannot arrange it outside working hours.

Antenatal care includes antenatal classes, appointments and parenting classes if they’ve been recommended by a doctor or midwife.

You must also be paid for the travel time if it’s during working hours.

Entertainment agencies

Entertainment agencies can charge you a fee:

for finding you work, for example taking a commission (percentage fee) from your earnings

to publish your details online or in a publication

They must tell you in writing if a fee is involved.

If they’re publishing your details

Once you receive the contract, you have a 30-day ‘cooling off’ period when you:

can cancel or withdraw from it without getting a penalty

do not have to pay

The agency must show you what it plans to publish about you before it’s published.

You then have up to 7 days after the cooling off period to say if you do not want the information to be published. If you’re happy, you must pay after the 7 days.

If the agency charged you but did not publish your name, you have the right to a refund for up to 60 days.

Contact Acas if you believe you’ve been charged unfairly.

Modelling agencies

Fashion and photographic model agencies can charge you a fee for finding you work. They can take a commission (percentage fee) from your earnings.

They can also charge a fee to publish your details online or in a publication. They cannot charge this fee to you upfront but they can take it from your earnings if they find you work.


Understanding your pay

Overview

When you start work, your employer should tell you how much you’ll be paid and how often. They should also tell you:

the day or date you’ll be paid, for example each Friday or the last day of the month

how you’ll be paid, for example cash, cheque or bank transfer

If you’re an employee or ‘worker’ (not a contractor or freelancer), you have the right to a payslip, which shows:

your earnings before and after any deductions

the amount of any deductions that may change each time you’re paid, for example tax and National Insurance

the number of hours you worked, if your pay varies depending on time worked

You might need to know how to work out your weekly pay if you have to claim payments for redundancy or compensation from your employer.

Part-time workers

If you’re a part-time worker, you must get at least the same hourly pay rate as a full-time worker doing a similar job.

Working out your pay

Knowing how to work out your weekly pay is important because it’s used to work out how much you should get for:

redundancy pay and pay during time off for job-hunting if you’re made redundant

pay during your notice period when leaving a job

holiday pay

guarantee pay for work - you get this if your employer cannot provide you with work, but your contract says they have to pay you anyway

compensation awarded by Employment Tribunals

What you’re entitled to depends on your work status.

You do not need to calculate your weekly pay, if you’re paid weekly and your pay does not vary.

If your pay varies or you’re not paid weekly, you have to use a 12-week period for working it out.

The 12-week period

You can work out your weekly pay by getting an average figure for a 12-week period. The particular 12 weeks you use varies depending on what you’re calculating your pay for.

Redundancy

Use the 12 weeks up to the day you got your redundancy notice to work out your pay.

Notice pay

Use the 12 weeks up to the first day of the notice period to work out what your notice pay should be.

Paid annual leave

Work this out using the 12 weeks leading up to your holiday.

Guarantee payments

Use the 12 weeks leading up to when your payment is due. If you no longer work for that employer, use the last 12 weeks of your employment with them.

If you’ve worked for your employer for less than 12 weeks, you should be allowed to calculate your average weekly pay using:

the number of hours you would have worked

the hours of other workers doing a similar job for your employer

Working out your weekly figure

Add up the total amount of pay for the period and divide it by 12 to get the weekly figure. You do this even if you’ve had to use a period of more than 12 weeks.

You can also include bonuses.

Overtime

You can include overtime in your calculations if your contract says your employer has to pay it.

Work done for a previous employer

You can include pay for work done for a previous employer if you’re calculating your average weekly pay and you did not have a gap in employment when you changed jobs.

Get help with the calculations

You can get help to calculate a week’s pay from Acas (Advisory, Conciliation and Arbitration Service) or Citizens Advice.

Pay calculations if you work shifts or get bonuses

If your pay or working hours vary from week to week, the calculations for working out your weekly pay are more complicated.

Bonuses and commission

Your pay could vary depending on the amount of work you do, because of:

bonuses

commission

‘piece work’ - you’re paid by the amount of work you do, rather than by the hour

The 12-week period

If you get bonuses, commission or piece work, you’ll need to work out your average hourly rate over a 12-week period to work out your weekly pay.

Add up your total pay for the 12 weeks first. You can include overtime and bonuses. There are special calculations for bonuses.

Quarterly bonuses

You can include a proportion of your quarterly bonuses in your calculations.

Divide the bonus amount by 13 (the number of weeks in a quarter of a year).

Multiply this figure by 12 (the number of weeks your pay is averaged across).

Annual bonuses

If you get an annual bonus here’s what you need to do.

Divide the bonus amount by 52 (the number of weeks in a year).

Multiply this by 12.

Hourly rate

Work out the average hourly rate by dividing the total amount you earned in 12-week period by the number of hours you worked.

Weekly rate

Multiply your hourly rate by the average number of hours you worked each week in the 12-week period, to get your weekly rate.

Shift or rota work

Your week’s pay will be the average number of hours you work at an average pay rate over a 12-week period.

Get help with the calculations

Performance-related pay

Your employer should base your performance-related pay on clear, measurable targets - they should tell you about these.

There are 2 main types of performance pay:

short-term schemes, like bonus payments or sales commission

long-term schemes, like company shares

Non-payment of bonuses or commission

If you do not get a bonus or commission you’re owed and you think there’s been a mistake:

speak to your employer to see if there’s been a misunderstanding

ask them set out in writing how they’ve calculated your pay

keep copies of any letters and notes of any meetings

If a bonus or commission is included in your contract, non-payment is a breach of contract. You can get help with making a complaint.

Non-payment of bonuses may also be covered legally under:

unlawful deductions from wages - for example, you’re entitled to payment but it has not been given

unlawful discrimination - your employer must not discriminate against particular groups, for example giving smaller bonuses to women

You can get advice from Acas (Advisory, Conciliation and Arbitration Service), Citizens Advice or your trade union representative.

Deductions from your pay

Your employer is not allowed to make deductions unless:

it’s required or allowed by law, for example National Insurance, income tax or student loan repayments

you agree in writing

your contract says they can

there’s a statutory payment due to a public authority

you have not worked due to taking part in a strike or industrial action

there’s been an earlier overpayment of wages or expenses

it’s a result of a court order

A deduction cannot normally reduce your pay below the National Minimum Wage even if you agree to it, except if the deduction is for:

tax or National Insurance

something you’ve done and your contract says you’re liable for it, for example a shortfall in your till if you work in a shop

repayment of a loan or advance of wages

repayment of an accidental overpayment of wages

buying shares or share options in the business

accommodation provided by your employer

your own use, for example union subscriptions or pension contributions

If you work in retail - for example shops, restaurants

Your employer cannot take more than 10% from your gross pay (pay before tax and National Insurance) each pay period to cover any shortfalls.

If you have not been paid in full

Speak to your employer first to try to sort out the problem informally.

If this does not work, talk to Acas (Advisory, Conciliation and Arbitration Service), Citizens Advice or your trade union representative.

You have the right to go to an Employment Tribunal to get your money.

If you leave your job

Check your contract to see if your employer is allowed to withhold your pay. Normally you’re entitled to be paid everything you’ve earned up to the point you finish.

If you’re forced to resign because your employer refuses to pay you, you may be able to make a constructive dismissal claim in an Employment Tribunal.


Complain about your trade union

Overview

You can complain to the Certification Officer about a trade union if you’re a member.

You might also be able to complain if you’re not a member of a trade union, for example you’re a candidate in an election run by a union.

What you can complain about

You can complain if you think the trade union has:

broken its own rules, for example about holding elections or ballots

broken laws on running trade unions, for example not holding a proper ballot on a proposed merger of trade unions or not providing access to accounting records

You can also complain about trade union funds being used illegally or in a way that breaks the financial rules of the union, known as financial irregularities.

You do not have to be a member of a trade union to complain about financial irregularities.

The make a complaint guidance has a full list of the complaints you can make to the Certification Officer

What you cannot complain about

You cannot complain about what a union does for you, for example representing you if you’re unfairly dismissed. You should get legal advice instead.

Complain to your trade union first

Talk to your trade union and try to resolve the problem with them before taking it to the Certification Officer.

You can take your complaint further if you’ve been through all the steps in your trade union’s complaints procedure and you’re still not satisfied.

Complain to a court

You might be able to take your trade union to court, for example for breach of contract if it breaks its own rules. You should seek legal advice before you do this. You cannot complain to the Certification Officer and the courts about the same problem.

Complain to the Certification Officer

Make a complaint.

Attend a hearing.

Get a decision.

Make a complaint

Email or call the Certification Officer to talk about your complaint before you make a complaint in writing.

The make a complaint guidance has information on how to make a complaint and when you can make it.

The financial irregularities guidance has information on how:

to make a complaint about the illegal or improper use of funds in trade unions and employers’ associations

the Certification Officer might appoint an inspector to investigate the complaint

the Certification Officer makes a decision and how they’ll tell you this

Use the complaint form

Download and fill in the registration of complaint form.

Email the registration of complaint form to the address on the form.

Make an anonymous complaint

You might be able to make your complaint anonymously if you feel your complaint would put you in danger.

Use the registration of complaint form to make your complaint and do both of the following:

tell the Certification Officer that you want to make an anonymous complaint

explain why you want your identity kept secret from your union

If the Certification Officer agrees, they will keep your identity secret from the trade union.

You can retract your complaint if the Certification Officer does not think your complaint can be made anonymously. You should tell them in writing that you want to retract your complaint.

Attend a hearing

You’ll usually get the chance to attend a hearing with the Certification Officer to have your complaint heard.

You’ll get a letter from the Certification Officer asking you to confirm what your complaint is about, for example what rule you think has been broken.

Your complaint will be sent to your union - they can disagree with any allegation you’ve made.

Provide documents for your hearing

You and your union must send certain documents by a date specified by the Certification Officer.

These include:

copies of all the documents that relate to your complaint

written statements from anyone that’s going to give evidence at the hearing

written draft arguments

copies of any legal evidence that backs up the draft arguments

Get a date for the hearing

You’ll get a letter from the Certification Officer that sets a date for the hearing when both of the following have happened:

your union has replied to the Certification Officer about your complaint

you and your union provide the Certification Officer with all the necessary documents

You or your union can ask for the hearing to be postponed if either of you can’t attend the hearing on the date given.

The hearing guidance tells you:

how you or your union might be able to change the date of the hearing

what happens at the hearing

Get a decision without a hearing

You can also get a decision from the Certification Officer on your case without having to attend a hearing, for example if both you and the union agree that either the union’s own rules or the law has been broken.

You’ll still need to provide the Certification Officer with all the details about the case so they can decide what should happen next.

Get a decision

You won’t get a decision about your complaint at the hearing.

You’ll be told at the end of the hearing when you might get your decision.

You’ll get a decision in writing, with the reasons for it, from the Certification Officer.

Appeal against a decision

You can appeal to an employment appeal tribunal if you think the Certification Officer made a decision that was legally wrong.


Joining a trade union

Joining a trade union

A trade union is an organisation with members who are usually workers or employees. It looks after their interests at work by doing things like:

negotiating agreements with employers on pay and conditions

discussing big changes like large scale redundancy

discussing members’ concerns with employers

going with members to disciplinary and grievance meetings

Find a union to join

If there’s a union at work, you can ask the trade union representative (‘rep’) about joining. Their contact details may be in your company handbook, intranet site or on the union noticeboard.

The union rep will tell you if you’re eligible to join and give you a membership form to fill in.

Trade union contact details

You can search a list of unions and their contact details put together by the Certification Officer, the independent organisation responsible for the legal regulation of unions.

You can also use the TUC’s interactive tool to help you find a trade union in your workplace, or one which covers your type of job.

Trade union membership subscriptions

Your union will charge a union membership fee (‘membership sub’) to finance the work of the union. This can be the same amount for all employees or based on how much you’re paid.

Paying your membership subs

You can pay your subs by:

having the amount taken by your employer from your pay and sent to the union (otherwise known as ‘check-off’)

direct debit

cash

cheque

Paying by check-off

Your employer does not have to take union membership subs from your pay and send it to the union. They can stop sending your membership subs unless your employment contract says they have to.

Your employer cannot take union membership subs from your pay without your written permission. Many trade unions will get your agreement to pay by check-off when you join, and forward it to your employer.

You can also ask your employer in writing to stop taking money from your pay for check-off whenever you want. They must then stop taking subs from your pay as soon as it’s possible.

Your employer is responsible for making sure that any check-off payments they make are legal.

What to do if you have a problem

If you have a problem with your check-off payments, try to discuss the issue with your employer and your trade union first.

If your trade union subscriptions are taken from your pay without your consent, you could make a complaint to an employment tribunal against your employer.

If your complaint is successful the employment tribunal can order your employer to pay you the value of the unauthorised payments.

Trade union membership: your employment rights

You have the right to:

choose to join or not join a union

decide to leave or remain a member of a union

belong to the union you choose, even if it’s not the one your employer negotiates with on pay, terms and conditions

belong to more than one union

Your employer is not allowed to:

offer you a benefit to leave a trade union

threaten to treat you unfairly if you do not leave a union

Refusing to employ you for trade union membership reasons

An employer or employment agency is not allowed to insist that you:

join or leave a trade union

leave one union for another

Dismissal for trade union membership reasons

Your employer is not allowed to dismiss you or choose you for redundancy because you:

are or want to be a union member

are not or do not want to be a union member

took part or wanted to take part in union activities

Other unfavourable treatment

Your employer must not treat you unfavourably (for example refusing you promotion or training opportunities) if you:

join a union

take part in its meetings

leave a union

What to do if you have a problem

You may be able to use a grievance procedure or go to an employment tribunal  if you think your employer has treated you unfairly because of your trade union membership.

Contact the Advisory, Conciliation and Arbitration Service (Acas) if you have any questions about trade union membership.

Role of your trade union rep

A trade union representative (‘rep’) is a union member who represents and gives advice to colleagues when they have problems at work.

Trade union reps are not paid but they do get paid time off to do their work as a rep.

What do union reps do?

Reps are there to:

discuss any concerns you have about your employer

go with (‘accompany’) you to disciplinary or grievance hearings with management

represent you in negotiations (‘collective bargaining’) over your pay and terms and conditions of employment

meet with your employer to find solutions to workplace issues

develop the best possible health and safety procedures with your employer

Employers must consult with union reps if:

there is going to be a business transfer or takeover

they are planning to make 20 or more people redundant within 90 days

Your right to be accompanied

You have the right to be accompanied by your union rep to some meetings with management - for example, if:

you’re facing a disciplinary charge

you wish to raise a grievance with your employer

If your union rep cannot attend, you may be able to rearrange the meeting or ask a work colleague to go with you.

Becoming a union rep

If you want to become a union rep, ask another rep in the workplace or contact your union through its website. Depending on union rules, you may be appointed or elected.

If you become a union rep, find out what rights you have.

Union negotiations with your employer

When an employer and a union agree to negotiate on pay, terms and conditions, this agreement is called ‘recognition’ of the union. The negotiations are called ‘collective bargaining’.

How collective bargaining works

Your employer and trade union must agree on how collective bargaining will be done including:

which union, rep or official will represent a group of workers or employees (this group is called a ‘bargaining unit’)

who is included in the bargaining unit

how often meetings will take place

what issues they’ll discuss

how disagreements will be handled

how collective bargaining will work if more than one union is recognised

Collective agreements

Agreements reached through collective bargaining are called collective agreements and they often mean a change in your employment terms and conditions.

Collective agreements can cover all staff - not just union members.

Your employment contract may say which collective agreements cover you if:

your employer recognises more than one trade union

1 union is recognised to negotiate for more than 1 bargaining unit


Request an information and consultation agreement with your employer

Overview

You, together with other employees, can ask your employer to keep you informed and consult with you on issues related to your company or organisation.

This may include:

the company or organisation’s performance, for example financially and competitively

any changes to your working conditions and employment prospects

This is called an information and consultation agreement.

Your employer can start negotiating an agreement without a request from its employees.

How to make a request

Check that you’re eligible.

Write to your employer or the Central Arbitration Committee (CAC) with your request.

Eligibility

To make a request, you need to be an employee of a company or organisation which has both:

at least 50 employees

its registered office, head office or main operation in England, Scotland or Wales

There’s a different process if you work for a company or organisation based in Northern Ireland, unless both of these apply:

its head office or registered office is in England, Scotland or Wales

the majority of its employees work in England, Scotland or Wales

Number of employees needed to take part

Employees can either individually request an arrangement or make a single request as a group.

For the request to be valid the following must apply:

at least 2% of all the employees in the company or organisation make a request

at least 15 employees must make the request

individual requests must be received within a 6 month period to be counted together

Find out the number of employees

You can write to your employer to ask how many people they employ.

You can complain to the Central Arbitration Committee (CAC) if:

your employer refuses to provide the number of employees

you think the number they’ve given you is wrong

Download and fill in the complaint form and send it to the address on the form.

Make a request

You can either write to:

your employer to request an arrangement

the Central Arbitration Committee (CAC) - you can do this if you don’t want your employer to know you’re making a request

Request direct to your employer

Include the following:

the date you’re making the request

your name and the names of any other employees included in your request

Request through CAC

Email enquiries@cac.gov.uk with the following:

the date you’re making the request

your name and address

your employer’s name and address

the name of the manager who represents the employer

CAC will tell you and the employer how many requests have been made, without revealing the names of the employees.

What happens next

Your employer can start negotiating with you straight away if they choose to, regardless of how many employees have applied.

If more than 40% of employees have requested an agreement, your employer must start negotiating with you.

If less than 40% of employees have requested an agreement, your employer can:

say that there’s already a pre-existing agreement

hold an employee ballot to see if they should start negotiations

An employer can dispute the validity of any request.

Central Arbitration Committee (CAC) can be asked to decide if
requests are valid and if pre-existing agreements already exist.

Pre-existing agreements

Your employer may say there’s already an agreement about keeping you informed and consulting you.

A pre-existing agreement is a written explanation of how the employer informs and consults employees or representatives. It must:

cover all employees

have been agreed by those employees

You can complain to CAC if you do not agree there’s a pre-existing agreement.

If a ballot is held

Your employer may hold a ballot (a vote) to decide if they should start negotiating.

They must:

tell you no more than 1 month after they get your request that they’re going to hold a ballot

hold the ballot no sooner than 21 days after they tell you about it

Your employer might decide to hold a combined ballot of all employees if there is already an agreement (or more than one agreement) covering other parts of the business in addition to your own.

All employees must be allowed to vote in the ballot and the voting must be done in private.

Results of the ballot

Your employer must start negotiations with you if both these apply:

at least 40% of employees took part in the ballot

more than 50% of those voting supported the request for an information and consultation agreement

You cannot request a new agreement for 3 years if the results of the employee ballot do not meet both these requirements.

Complain about a ballot

Download and fill in the relevant complaint form and send it to the Central Arbitration Committee (CAC) if:

the employer has not told you that they’re holding a ballot within 1 month of getting your request - use form 8(7)

you think the employer is taking too long to hold a ballot after they’ve said they would and 21 days have passed - use form 8(8)

you believe the ballot was not fair - make the complaint within 21 days of the ballot using form 10(2)

Negotiate an agreement

You need to negotiate with your employer when they agree - or the Central Arbitration Committee (CAC) instruct them - to set up an agreement.

The terms will need to be agreed and written down by your employer and the employee representatives.

If the negotiations are started by the employer without receiving a request, they must inform all employees in writing about what’s happening. You can complain to CAC if they do not.

Selection of employee representatives

Your employer must make sure that every employee is represented by at least one representative. They can choose whether this is done by appointing or electing the representatives but all employees have a right to be involved in this process.

Complain to CAC within 21 days of the selection of the representatives if you think your employer has not done this properly.

CAC may tell the employer to rerun the process for appointing or electing representatives.

If negotiations fail

If your employer does not enter negotiations or an agreement cannot be reached then they must give you the following information and consult with you on:

what the company or organisation is doing, its economic situation and its future prospects

any changes to employee numbers and organisation, employment prospects, and particularly any threats to jobs within the company or organisation

decisions that might lead to changes in work organisation or in employment contracts including TUPE transfers and collective redundancies

Complaints when an agreement is in place

Complain to CAC by filling in the relevant form if you believe:

your employer has not complied with the terms of an agreement

your employer has made an unreasonable request that you keep information confidential

that disclosing particular information would harm your business


Taking part in industrial action and strikes

Overview

Industrial action is when workers:

go on strike

take other action, like refusing to do overtime (known as ‘action short of a strike’)

Sometimes an employer may stop their workers from working or coming back to work during a dispute. This is called a ‘lock-out’.

Calling industrial action

Industrial action happens when trade union members are in a dispute with their employers that can’t be solved through negotiations.

A trade union can only call for industrial action if a majority of its members involved support it in a properly organised postal vote - called a ‘ballot’.

Before organising a ballot, a union must decide which members affected by a dispute it wants to ask to take industrial action. It must tell all members entitled to vote and the employer what the ballot results were.

A trade union calls industrial action by telling members and the employer when and how this action will be taken. This should be done by a trade union official or committee that has the legal right to do so. Your voting paper must have said who this is.

Taking part in industrial action - your rights

If you’re a trade union member, you have the right to vote before your union asks you to take industrial action. You don’t have to take part in industrial action and can’t be disciplined by your union if you don’t.

If you do get excluded or expelled from your union, you can complain to an employment tribunal.

Secondary action

It’s against the law to take part in ‘secondary action’ (going on strike in sympathy with people who work for a different employer).

Holding a ballot

Your union must have a vote (a ‘ballot’) that’s properly organised according to legal rules.

Properly organised ballots

A ballot for industrial action must:

be supervised by a qualified independent person (a ‘scrutineer’ - often someone from an organisation like the Electoral Reform Society) appointed by the union if over 50 members are being balloted

be held before the union asks members to take or continue taking action

be open to all members the union wants to take action

be a postal ballot where members vote by marking a box on a voting paper and return it in a prepaid envelope

include information on what the ballot is about and where to post your vote

The union must tell everyone entitled to vote how many people voted, the number of yes votes, no votes or spoiled papers as soon as it can after the ballot.

It must also give the employer one week’s notice of the start of the ballot and tell them the result as soon as possible once it’s available.

There’s practical guidance on these rules in the code of practice on industrial action ballots.

Questions on the voting paper

When you’re balloted, your voting paper must ask whether you want to take part in either (or both):

strike action

action short of a strike

The union can only call on members to take action if a majority of members who voted were in favour of that particular action. If both questions are asked on the ballot paper and members vote yes to both, the union can decide what industrial action to take.

Complaining about ballots

You can apply for a court order if your union breaks the rules on industrial action ballots. You can take legal advice before doing this.

The court may order the union not to organise action if it decides a ballot wasn’t held according to the rules.

You can apply for a temporary injunction that tells the union not to call industrial action if your case can’t be heard in court straight away.

If the union doesn’t do what the court says, you can ask them to ‘declare the union to be in contempt of court’ and the union can be fined.

Your employment rights during industrial action

You have the right to take industrial action and you can’t be legally forced to stay at, or go back to, work (unless a ballot wasn’t organised properly).

If you take industrial action, you’ll probably have broken (be ‘in breach of’) your employment contract and your employer:

is unlikely to pay for the work you didn’t do when you took industrial action

can sue you for breaking your contract (this doesn’t happen often)

Taking industrial action doesn’t usually mean that your employer will say you’ve broken your period of continuous employment with them. This begins when you start working for your employer and ends on the day your employer uses to calculate your length of service.

However, if you take industrial action, your employer will reduce your length of service with them by the number of days you were on strike. This is important when working out your pension and things like statutory redundancy pay.

Dismissal for industrial action

You can’t be dismissed for industrial action if:

it’s called as a result of a properly organised ballot

it’s about a trade dispute between workers and their employer (eg about your terms and conditions)

a detailed notice about the industrial action (which is legally required) has been given to the employer at least 7 days before it begins

You can claim unfair dismissal at an employment tribunal if you’re dismissed for taking industrial action at any time within the 12 weeks after the action began.

After 12 weeks, you can be dismissed if you take industrial action and your employer has tried to settle the dispute. For example, your employer may bring in advisers from Acas to help find a solution.

When you may be dismissed

You could be dismissed for taking part in industrial action if:

the union hasn’t held a properly organised ballot

the union hasn’t given the employer the correct notice for balloting members or taking action

the union hasn’t called its members to take action because they think the dispute is settled or action is called by someone who doesn’t have the authority to do so

it’s in support of workers taking action against another employer (otherwise known as ‘sympathy’ or ‘secondary’ action)

it’s in support of only employing union members (otherwise known as a ‘closed shop’)

it breaks any other parts of industrial action law

If you take part in industrial action that breaks the regulations and you’re dismissed, you can’t usually claim unfair dismissal if all employees taking part are dismissed as well.

There’s more detail on legal rights and protections in the guidance on industrial action and the law.

Industrial action by non-union members

Non-union members who take part in legal, official industrial action have the same rights as union members not to be dismissed as a result of taking action.

Going on strike and picketing

A picket line is where workers and union reps (‘picketers’ or ‘pickets’) stand outside a workplace to tell other people why they are striking. Pickets may also ask people not to:

do some of their usual work

go into work

Pickets must not prevent people from going to work or doing their usual work if they want to do so.

The picketing code of practice explains the rules around lawful picketing.

Picketing and the law

It’s a criminal offence for pickets to:

use threatening or abusive behaviour to people walking past or crossing the picket line

block people or vehicles trying to get into the workplace which is on strike (called ‘causing an obstruction’ by police)

carry weapons

damage property

cause or threaten to cause a ‘breach of the peace’

try to block roads near the picket line (called ‘causing an obstruction to the public highway’)

try to stop the police who are outside the workplace from doing their job

You can have legal action taken against you if you break the law or encourage others to do so when you’re picketing. This includes:

trespassing (trying to enter a building without permission)

making a noise nuisance

using threatening language or offensive material, libel or slander in leaflets, banners, placards, chants or speeches

If you break a court order banning you or your trade union from holding a picket, you could be open to further legal action (otherwise known as ‘contempt of court’).

Mass picketing

Police have special powers to stop a mass picket if they think there’s a danger of:

serious public disorder (like a riot)

serious damage to property

The Code of Practice on picketing says usually there should be no more than 6 people outside an entrance to a workplace.

If you don’t stop picketing when told do so by police, you can be arrested.

Flying pickets

Flying pickets are groups of striking workers that move from one workplace to another to picket them. Usually flying pickets are illegal - you can only join a picket line at your workplace.

Trade union reps can be on picket lines at different workplaces if they’re responsible for organising workers in those workplaces.