A contract of employment can give the employer protection
In this ultimate guide for employers we detail the various times in the workplace where a contract of employment can give the employer protection.
The face of employment law in this country was changed by legislation enacted from the early 1970s onwards, creating a body of law which is now principally aimed at protecting the employee.
Before this, the contract of employment was the definitive expression of the agreement between the employer and employee, but now Statute and Regulation has taken over.
Does a contract of employment have a function in the workplace?
New legislation started out by introducing the concept of unfair dismissal, and the system of industrial (now employment) tribunals to adjudicate in employer-employee disputes.
Over the years employees have obtained protection and entitlements in many areas of employment, such as:
- maternity pay
- sickness pay
- the right to Statutory Redundancy
- flexible working rights
There are now those who ask whether the contract of employment has any real function because of the obligations imposed upon employers by legislation.
In my view the contract is becoming increasingly important because of the wealth of regulation and obligation upon employers. While the employer cannot contract out of his statutory obligations, they can make sure that the contract makes clear the limitations that apply, and create a meaningful document to govern the relationship between employer and employee – helping to maintain what is at the very heart of an employer-employee relationship, mutual trust and confidence.
Defining overtime in a contract of employment
Overtime is best defined as the hours worked beyond an employee’s regular full-time contractual requirement. When an employee has fixed working hours, overtime will be any additional hours worked.
The need for overtime can arise through an increased demand from customers or clients for the employer’s products or services, which may be regular or irregular.
The contract of employment determines whether overtime is:
- voluntary, or
- compulsory and guaranteed, or
- compulsory but not guaranteed
How voluntary overtime works
Voluntary overtime can work both ways – with no obligation on an employer to offer overtime, but equally no obligation on the employee to do overtime if it is offered.
An employment contract can indicate the need for an employee to be flexible in dealing with potential overtime situations. But employees are able to choose whether or not to work extra hours if there is nothing in their contract to say they must do so.
Compulsory guaranteed overtime
With compulsory guaranteed overtime the employer is obliged by the contract of employment to offer it, and the employee is obliged to accept it.
The contract of employment can be very specific as to when overtime will occur, on a weekly or monthly basis. Or even more specific than that, if there is a particular customer who the employer needs to satisfy.
Compulsory but not guaranteed overtime
In the case of compulsory but not guaranteed overtime, the employer can make it clear that they have no obligation to offer overtime, but when it is offered the employee must accept and work it.
Some employers’ work can be very seasonal, and yet they cannot be certain as to how much overtime will be required in any one year.
An employer who wants to rely on either guaranteed or non-guaranteed overtime should set this out in the contract of employment. If that is done correctly, any employee that refuses to work compulsory overtime would be in breach of contract and subject to disciplinary sanctions.
Limits imposed on overtime
There is no real limit to how much overtime can be worked, except that the Working Time Regulations do not allow more than 48 hours per week on average to be worked by an employee.
However, this is something that an employee can opt out of. Again, this illustrates an interface between contract and legislation that can be dealt with by the employer in the contract of employment.
Laying off employees and short time working
The mirror image of overtime is where an employer, owing to the nature of his business, cannot afford to keep a full workforce fully engaged throughout the year.
To avoid the disruption of redundancy, the employer can make provision in the contract of employment that will require, with appropriate notice and statutory basic compensation, employees not to work when the demands of the business are at their slackest.
Suspension of an employee
Suspension can best be defined as a situation where an employee, for a short period of time, does not have to attend work or do any work. Once again the contract of employment must give the employer this right.
Suspension is usually part of a disciplinary procedure, but could be in relation to medical grounds, or for an employee under risk who is an expectant mother.
Suspension as part of disciplinary procedures
Suspension should never be used automatically by an employer when there is a disciplinary issue.
Most investigations or enquiries into an employee’s conduct can be dealt with while the employee is still in the workplace. There are certain situations where suspension could be used:
- where there are serious allegations of misconduct
- where the employee could influence witnesses or sway or make impossible an investigation
- where the working relationship between the employer and employee is almost at a breakdown or has already broken down
- where the employee’s presence might be a risk to other employees, the employer’s property or the business’ customers
- where an employee is subject to criminal proceedings
Any suspension must be for as limited a period of time as possible. There are various alternatives to suspension and if any of these are viable in the circumstances then these should be used by the employer ahead of suspension:
- moving an employee to a different area of the workplace
- changing the employee’s working hours
- creating restricted duties or supervision or, if the employer is big enough, moving the employee to another part of the organisation.
It is only where other options are not practical that suspension should be regarded as necessary by the employer.
Suspension on medical grounds
If an individual worker is unable or unfit to work due to a particular medical problem, and temporary alternative working conditions cannot be found, an employer has a duty to ensure the health and safety of all his employees.
If sensible adjustments cannot be made, suspension may be necessary until it is safe for the employee in question to return to work.
Maternity risk suspension
This relates to a very specific situation where there is a risk to a female employee, who can be suspended for maternity reasons.
The employer should make a risk assessment in relation to expectant mothers in their workplace, in the same way they would have to if they were considering suspension on medical grounds.
Procedures in relation to suspension
Suspension should commence with the employer providing the employee with a letter giving the reasons for the suspension, confirming the employee’s rights and obligations during suspension, and making clear the purpose of the suspension.
During the suspension the employee should receive full pay unless the contract of employment specifically provides otherwise. This would usually be in relation to a particular gross misconduct situation peculiar to the employer.
Ending a suspension
This should happen as soon as possible, and an employer has to be careful to properly arrange for the reintegration of the employee with an interview on return to work.
As can be seen from all the above, the suspension process is capable of being restricted, clarified and limited by the contract of employment between an employer and an employee.
For more information on the subject of contracts of employment, employers should contact us at TM LAW LIMITED for honest, expert employment law advice.
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