Top 10 employment law myths

Published, 5 years ago

Whilst many employers attempt to rely on common sense and instinct to guide them through the complex maze of employment law, given the speed with which the law changes and the common myths bandied about, frequently this is not enough. Below, we attempt to dispel the top 10 employment law myths.

1. If there is no written contract between an employer and an employee, there is no contract at all

In the absence of a written contract, a court looks at the intention of the parties and the reality of the situation. By way of example, if the parties orally agree for the employee to be paid a salary of £100,000 per year and the employee is paid £100,000 per year, this salary is likely to be accepted by a court, regardless of the fact it was never put into writing. Of course, it is rare for people to agree on what was said, which is why it is always important to have a signed written contract.

2. If there is no written or oral contract in place the employee does not have any rights

Even without a contract, employees still benefit from certain legal rights. For instance, all employees are entitled to receive the National Minimum Wage and protection from discrimination, regardless of their length of service, age or job title. Furthermore, after being employed for one month, all employees are entitled to receive at least one week’s notice before their employment can be terminated. These rights cannot be waived, even with the employee’s consent.

3. Employment law does not apply to consultants and those who are genuinely self-employed

Although individuals falling into these categories do not benefit from the same wide range of rights as employees, they still receive some protection.

4. Employees with children have the right to work part-time or on a flexible basis

No employee has the right to work part-time or on a flexible basis. However, employees with children (under the age of 17), who have more than 26 weeks’ service with their current employer, have the right to submit a flexible working application. Employers do not have to allow the employee to work flexibly but must comply with a prescribed statutory procedure when considering an employee’s request and may only refuse a request on one of the specified grounds, such as increased costs or an adverse impact on performance.

5. Employees on long-term sick leave cannot be dismissed

An employer is not expected to keep a sick employee’s job open indefinitely and in certain circumstances, provided a fair procedure is followed (which may include consulting with the employee and his/her doctor to establish their condition, prognosis and ways in which the employer may facilitate the employee’s return to work), it may be possible to fairly dismiss an employee who is on long term sick leave. However, to avoid the possibility of successful litigation, each case should be analysed carefully prior to dismissal, to ensure the dismissal is fair and not discriminatory.

6. Employees who are pregnant or on maternity leave cannot be dismissed

An employee who is pregnant or on maternity leave is not immune from dismissal. However, it is important that the dismissal is not because of the employee’s gender, pregnancy or maternity leave as this would amount to discrimination and an automatically unfair dismissal, and may result in the employee bringing successful claims against the employer. Consequently, it is always important to analyse the facts of each case to ensure the business has clear, lawful, documented reasons prior to any dismissal taking place.

7. An employee cannot bring a claim for unfair dismissal on the expiry of a fixed-term contract

An employee who is given notice at the end of his/her fixed-term contract has exactly the same unfair dismissal rights as a permanent employee. It is therefore important that a fair dismissal procedure is followed for all employees, regardless of whether or not they are fixed-term or permanent.

8. Employers do not need to follow a procedure when dismissing an employee for gross misconduct

Given employees now have to be employed for two years prior to accruing unfair dismissal rights, many employers fall into the trap of thinking it is safe to dismiss an employee with less than two years’ service without following any form of procedure. Whilst this may be tempting, employers should, where possible, follow a fair procedure, regardless of the employee’s length of service, to avoid any inference the employee may subsequently try to draw that they were dismissed for a discriminatory reason. What amounts to a fair procedure will vary depending upon the circumstances of each case, but broadly speaking, as a minimum, it involves setting out the alleged misconduct in writing, inviting the employee to a meeting to discuss the allegations, providing written reasons for the outcome and allowing the employee the right of appeal.

9. If an employee does not give his/her employer notice or provides less notice than required, the employer is not required to pay accrued holiday pay or outstanding salary

An employee is entitled to receive payment in respect of the work they have undertaken. Consequently, even if an employee has provided the employer with less notice than required, they are still entitled to be paid for the days they have worked, in addition to any accrued holiday. However, if an employee provides less notice than required, it means the employer can stop paying the employee’s salary with effect from their first day of absence.

10. The first £30,000 of any severance payment can always be paid free of tax

It is only the first £30,000 of any non-contractual payment which can be paid free of tax. Therefore, if an employee’s contract contains a provision allowing the employer to terminate the contract by paying the employee a payment in lieu of their notice period, this provision would be contractual and consequently, any payment in lieu of the employee’s notice period would need to be taxed.

The above answers are not intended to provide complete solutions and may vary depending upon the facts of the case. Should you require any further assistance regarding any of the topics mentioned in this article, please do get in touch.

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