Contracts & Minimum Employment Terms
This question was recently considered in the case of Stefanko & Others v Maritime Hotel Ltd.
Under section 1 of the Employment Rights Act 1996, employers are required to give employees whose employment will continue for more than 1 month a written statement of employment terms. The details that must be given in the written statement include job title, place of work, salary and hours of work, to name a few.
This statement must be given to employees no later than two months after employment begins and section 6(2) of the Employment Rights Act 1996 states that it must be given even if the employment ceases before the end of the two-month period.
There is currently an exception made in the Employment Rights Act 1996 for those on “short term employment” so that where the employee is employed for less than 1 month, the employer does not have to provide a statement of employment particulars. (Although, this is due to be changed with effect from 6th April 2020 – from then on every new employee will have the right from day one.)
A failure to provide a statement of written particulars can be problematic for employers if the employee brings a successful tribunal claim (e.g. for unfair dismissal) because it can lead to the employer having to pay additional compensation. The minimum amount that can be awarded for this failure is 2 weeks’ pay, up to a maximum of 4 weeks’ pay.
Miss Stefanko and her fellow claimants (“the Claimants”) were from Poland and were employed by the Maritime Hotel as waiting staff. The Claimants started working at the Hotel at various dates commencing from 21 April 2016 until they were summarily dismissed on 7 July 2016. None of the Claimants were given a “section 1” statement of terms and conditions of employment during their employment or after it ended.
During their employment, the Claimants were poorly treated by their employer and when they complained about shortfalls in wages, late payments and falsification of wage slips, they were dismissed and told to leave the Hotel immediately.
The Claimants subsequently took the Hotel and one of the co-owners of the Hotel to the Employment Tribunal and succeeded in their claims for unpaid wages, holiday pay and in a finding of automatically unfair dismissal for asserting a statutory right.
Two of the Claimants were also successful in claiming compensation for failure to provide a section 1 statement of terms. They were each awarded 4 weeks’ basic pay. However, one of the Claimants, Ms Woronowicz did not succeed in her claim as she had been employed for less than 2 months and the Employment Tribunal decided that because of this, she could not claim compensation.
Ms Woronowicz appealed against this decision to the Employment Appeal Tribunal.
The Employment Appeal Tribunal upheld Ms Woronowicz’s appeal and said that the Employment Tribunal had overlooked section 2 of the Employment Rights Act 1996 and that there is an obligation on employers to provide a statement for employees with one month’s or more service, whether or not the employment relationship is ended in its second month. Accordingly, the Employment Appeal Tribunal found the Tribunal had made an error in law and that Ms Woronowicz was entitled to a statement of particulars. It therefore followed that she too should have succeeded in her claim against the Hotel for failure to provide her with such a statement.
Points to note
The Employment Appeal Tribunal emphasised that it is best practice for written particulars of employment to be given as soon as possible to “protect both parties and in order to minimise risk of ambiguity or misunderstanding of the terms agreed that form the contractual basis of the employment relationship” – a statement with which we wholeheartedly agree.
Action to take
- If you do not have employment contracts for your staff, we highly recommended putting these in place.
- It is not costly to have employment contracts prepared – please contact us for a fixed fee quote. We also provide contracts as part of our ongoing monthly support packages, known as the ‘HR Harbour’.
- Make sure staff contracts are up to date – review them periodically and make sure any changes made to an employee’s terms are reflected in their employment contract.