Employment Contracts FAQ

If you are self-employed, while you will be paying into your state pension by means of your National Insurance contributions (assuming you are paying them) you won't have any other pension scheme available unless you are paying into one. You are strongly advised to consult an independent financial adviser to set you up with a scheme most suitable for you.


Stakeholder Pensions were introduced in April 2001 as the new low-cost private pension initiative. The government has insisted that those employers with five or more employees must offer their staff access to a Stakeholder Pension scheme where there is no other form of company pension already in place that they would otherwise be eligible to join.

Unlike the traditional form of occupational pension, there is no legal requirement for the employer to contribute and benefits at retirement will depend on how much has been paid in, the performance of the funds while invested and the rates of interest available at retirement.

Stakeholder Pensions must meet certain standards designed to ensure they offer value for money. These standards are known as CAT (Charges, Access, Terms) standards and are summarised below:

  • There is a maximum management charge of one per cent of the value of the pension fund per annum.
  • The minimum contribution to the plan must be no less than £20 and the member can choose when and how often to pay.
  • The plan holder must be able to switch to another scheme or pension company whenever he likes and without penalty.
  • Any extra benefits such as life assurance or premium protection must be optional and arranged separately from the pension plan.

Contributions are made net of basic rate Income Tax by the employee and gross where the employer decides to contribute.


No, you can try conciliation through ACAS or formally agree to compromise.


Constructive dismissal is when an employee resigns because their employer's conduct fundamentally breaches your contract.


If an employee is made redundant and they have two years' service, they are entitled to Statutory Redundancy Payment from their employer as a minimum.


A basic unfair dismissal award of up to £11,400 (2010/11) plus a compensatory award of up to £65,300, depending on the circumstances.


Yes, three months from the last incident.


There are certain procedures that must be followed when an employee has a grievance with the company or an employer wishes to discipline or dimiss an employee and these are called 'statutory dispute resolution procedures'. These are outlined in more detail in Employment Law Made Easy.

Before you can take your grievance to an employment tribunal, you must first take certain steps to try to resolve the situation with your employer by initiating the statutory grievance procedure. If your employer is also unhappy with your actions and is contemplating dismissing you or taking disciplinary action other than giving a warning (e.g. demotion or transferring you to work in a different department) it must follow the standard dismissal and disciplinary procedure.

If your employer dismisses you without following the procedure, it will be automatically unfair and you may get compensation.


Yes, from October 2004 they have applied to all employers.


Subject to certain conditions, both parents can take up to a total of 13 weeks off, unpaid, to look after a child under the age of five. If you have a disabled child under the age of 18, you are also entitled to 18 weeks off.


Not always. A woman who is the long-term partner of a child's mother can also qualify.


If you have worked continuously for your employer for 26 weeks by the beginning of the 14th week before the expected week of childbirth, you can take either one week or two consecutive weeks' paternity leave (not odd days). During this period, your employer is required to pay statutory paternity pay at the current rate of £124.88 per week (from 6 April 2010), even if you don't intend to work after the child is born. To be eligible for statutory paternity pay, you must: be earning an average of at least £95 a week (before tax).


No, statutory adoption leave is only available to one of you. The other member of the couple, or the partner of the adopter, may be able to take paid paternity leave.


It's no longer lawful to discriminate on the grounds of age. From 1 October 2006 there is legal protection against age discrimination.


The Working Time Regulations provide that:

  1. Workers don't work more than 48 hours a week;
  2. Night workers don't work more than eight hours a night and are offered regular health assessments;
  3. Workers have a rest period of 11 consecutive hours between each working day;
  4. Workers have at least 24 days' paid leave each year.

Only in the case of the 48-hour week may individual workers choose to agree to ignore the regulations and work more than 48 hours. If they do, the agreement must be in writing and must allow the worker to bring the agreement to an end. You can use our Working Time Regulations 48-Hour Opt-Out Agreement download to get the agreement in writing.


Generally, no they don't, as they agreed to your working hours in their employment contract. However, if your employment contract or staff handbook says that your employees hours of work may be changed, then they would have to start an hour earlier.


Yes, they can be counted as part of the statutory 28 days' holiday (2010/11).


The terms of an employment contract can be written or verbal. 

The difficulty with relying on verbal promises as contractual terms is that they are very much more difficult to prove; it will often be your word against your employee's. This can be particularly difficult if a period of time has passed, or if the relevant manager who made the verbal promise has left. Therefore, if a verbal promise has been made and you wish to rely on this as a contractual term, it's wise to incorporate it into your employment contract.


Written terms and conditions (employment contracts) must be provided if you employ people for more than a month.


Employer's liability insurance isn't required to cover employees who are based abroad. However, do check the law in the country where they are based and find out if it requires you to take out insurance or carry out any other measures to protect your employees. If any employee is normally based abroad but spends more than 14 days continuously in Great Britain or more than seven days on an offshore installation, then employer's liability insurance will be required under English law.


You must undertake a risk assessment of your business premises and identify any significant health and safety risks which may arise. These may include, for example, the potential for a major escalating fire, explosion, building collapse, pollution incident and/or bomb threat. Once these major risks which may result in serious and or imminent danger have been identified, a formal emergency procedure must be produced.

The emergency procedure should set out the role, identity and responsibilities of the competent persons nominated to implement the action. The emergency procedure should normally be written down, clearly setting out the limits of action to be taken by all employees. In particular, work shouldn't be resumed after an emergency if serious danger remains.


In order to comply with the law, you should provide the following:

  1. The Health and Safety Law poster/leaflet
  2. The location of first aiders and the first aid box
  3. The location of the accident book
  4. The health and safety policy document

The rates of the National Minimum Wage depend on the worker's age and they are as follows:

  • 16-17 year olds: £3.72
  • 18-20 year olds: £5.03
  • Over 21s: £6.31
  • Apprentices aged 16-18, or 19 and over and in the first year of their apprenticeship - £2.68

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