175 Reviewing and Changing Contracts of Employment PDF

THOROGOOD
PROFESSIONAL
INSIGHTS
A SPECIALLY COMMISSIONED REPORT
REVIEWING AND
CHANGING CONTRACTS
OF EMPLOYMENT
Annelise Tracy Phillips, Paula Rome,

Thomas Player and Tracy Luke
IFC
THOROGOOD
PROFESSIONAL
INSIGHTS
A SPECIALLY COMMISSIONED REPORT
REVIEWING AND
CHANGING CONTRACTS
OF EMPLOYMENT
Annelise Tracy Phillips, Paula Rome,

Thomas Player and Tracy Luke
Published in 2003, updated 2005
Other Thorogood Thorogood Publishing Ltd

10-12 Rivington Street
Professional Insights London EC2A 3DU.
t: 020 7749 4748

f: 020 7729 6110
Applying the Employment Act 2002 e: info@thorogood.ws
w: www.thorogood.ws
Crucial Developments for
Employers and Employees
Audrey Williams Eversheds 2003, 2005
All rights reserved. No part

A Practical Guide to Knowledge of this publication may be
Management reproduced, stored in a retrieval
system or transmitted in any
Sue Brelade and Christopher Harman
form or by any means, electronic,
photocopying, recording or
HR Business Partners and otherwise, without the prior

permission of the publisher.
HR Outsourcing
Ian Hunter and Jane Saunders This Report is sold subject to the
condition that it shall not, by way
of trade or otherwise, be lent,
Email Legal Issues re-sold, hired out or otherwise
Susan Singleton circulated without the publishers

prior consent in any form of
binding or cover other than in
Employee Sickness and which it is published and without
Fitness for Work a similar condition including this
condition being imposed upon
Gillian Howard
the subsequent purchaser.
No responsibility for loss

Successfully Defending Employment occasioned to any person acting
Tribunal Cases or refraining from action as a
Dennis Hunt result of any material in this

publication can be accepted by
the author or publisher.
Special discounts for bulk quantities

of Thorogood books are available to
A CIP catalogue record for
corporations, institutions, associations and
other organisations. For more information this Report is available from
contact Thorogood by telephone on the British Library.
020 7749 4748, by fax on 020 7729 6110, or
email us: info@thorogood.ws ISBN 1 85418 296 X
Printed in Great Britain

by printflow.com
The authors
Annelise Tracy Phillips

Annelise Tracy Phillips is a Partner in the HR Group at Eversheds. She practices
in all aspects of employment law, including strategic issues such as managing
change and large-scale restructuring. Particular areas of expertise include discrim-
ination law and cross border change management/executive terminations.
Annelise lectures for the CIPD and is the co-author of published works on topics
as diverse as working time, family friendly working, employment tribunals and
race discrimination.
Paula Rome
Paula Rome is a member of the Eversheds HR Training and Development Team
and is involved in providing training for clients on legal and HR issues including
equal opportunities, bullying and performance management as well as writing
and presenting lectures on the training and development public programme.
Paula has also developed and provided training programmes for clients on equal
opportunities, avoiding harassment, performance management and absence
management, as well as participating in pan-European training sessions for inter-
national clients.
Thomas Player
Thomas Player is a Partner in the Human Resources Team at Eversheds. He has
a particular interest in industrial relations and collective bargaining. He is an
experienced labour and employment lawyer. He has experience on complex re-
organisational issues and collective redundancies. He has drafted collective
agreements and has experience of industrial action, balloting and trade union
recognition issues. He has a particular interest in the working time regulations.
THOROGOOD PROFESSIONAL INSIGHTS

THE AUTHORS
Tracy Luke
Tracy Luke is an HR and Employment law trainer with Eversheds.
Tracy initially worked for the Department of Trade and Industry (within the Statis-
tics Division and the Insolvency Service) for six years before her departure to
commence studies for her Law Degree. She qualified in 1995 and practised for
eight years as a solicitor.
Tracy currently delivers training to a range of different organisations from

FTSE 100 companies to police forces and housing associations. She has also
delivered training on a pro bono basis to charitable organisations.

Contents
1 CREATING THE CONTRACT OF EMPLOYMENT 1

ANNELISE TRACY PHILLIPS
Introduction..................................................................................................2
Offer ..............................................................................................................2
Invitation to treat .........................................................................................3
Acceptance ...................................................................................................3
Withdrawal of offer .....................................................................................4
Consideration...............................................................................................5
Intention to create legal relations ..............................................................5
Statement of main terms and conditions ..................................................5
Contents of the written statement .............................................................6
The terms of the contract of employment.................................................8
2 REVIEWING AND CHANGING THE

CONTRACT OF EMPLOYMENT 21
PAULA ROME, UPDATED BY TRACY LUKE
Handbook of policies and procedures.....................................................22

Legal status of the handbook ...................................................................22
Maintaining flexibility ...............................................................................23
Common content of the handbook ..........................................................26
HR Policies Key Policies and Procedures .............................................30
HR Policies Non-Key Policies ................................................................40

3 COLLECTIVE AGREEMENTS 45
TOM PLAYER
Introduction................................................................................................46
Legal enforceability ...................................................................................47
Incorporation of collectively bargained terms
into individual contracts ..........................................................................48
Express incorporation...............................................................................49
Implied incorporation ...............................................................................51
Incorporation by way of agency ..............................................................51
Provisions restricting rights to take industrial action ...........................52
Trade union recognition............................................................................53
Schedule A1................................................................................................54
Drafting of collective agreements ............................................................61
4 PRACTICAL DRAFTING CONSIDERATIONS 68

TOM PLAYER
Introduction................................................................................................69
Hours of work ............................................................................................71
Role and responsibilities ...........................................................................71
Building flexibility into contracts .............................................................72
Express flexibility clauses .........................................................................72
Place of work ..............................................................................................73
Deductions protection of wages............................................................75
Right to search ...........................................................................................77
Employee benefits......................................................................................77
Working time .............................................................................................79
Enforcement of the Regulations...............................................................82

5 CONFIDENTIALITY AND POST
TERMINATION RESTRICTIONS 83
PAULA ROME, UPDATED BY TRACY LUKE
Background ...............................................................................................84
Competition whilst still employed ...........................................................85
Post termination restrictions restrictive covenants ............................89
Enforcement ...............................................................................................93
The effect of wrongful and constructive dismissal ................................95
6 CHANGING THE CONTRACT 98

ANNELISE TRACY PHILLIPS
Introduction................................................................................................99
Consent between the parties ....................................................................99
Union agreement .......................................................................................99
Legal remedies .........................................................................................102
Deductions in wages claims ...................................................................104
Unfair dismissal .......................................................................................104
Remedies for unfair dismissal ................................................................106
Discrimination claims..............................................................................107
Imposing the change ...............................................................................107
The pressing business need....................................................................108
Collective consultation ............................................................................110
With whom should you consult? ...........................................................111
Employee representatives.......................................................................111
Notice ........................................................................................................113
Summary...................................................................................................115

7 INDUSTRIAL ACTION 116
TOM PLAYER
Introduction..............................................................................................117
What is industrial action? .......................................................................117
Definition of a trade dispute .................................................................118
The rules on ballots and notification .....................................................119
Information to be contained in notices .................................................119
Sample voting paper ...............................................................................120
Type of ballot ............................................................................................121
Industrial action notices..........................................................................122
Commencement of industrial action .....................................................123
Planning for industrial action.................................................................123
Temporary labour ....................................................................................124
Industrial action and the statutory right to
claim unfair dismissal............................................................................124
The strike ..................................................................................................126
Picketing ...................................................................................................127
SUMMARY 128

THOROGOOD
PROFESSIONAL
INSIGHTS
Chapter 1
Creating the contract of employment
Introduction............................................................................................2
Offer ........................................................................................................2
Invitation to treat ...................................................................................3
Acceptance .............................................................................................3
Withdrawal of offer ...............................................................................4
Consideration.........................................................................................5
Intention to create legal relations ........................................................5
Statement of main terms and conditions ............................................5
Contents of the written statement .......................................................6
The terms of the contract of employment...........................................8

Chapter 1
Creating the contract of
employment
Introduction
Technically, a contract of employment does not need to be a written document.
It can be wholly oral (subject to the statutory obligation to provide written partic-
ulars discussed below). Given the difficulties of interpreting oral agreements
after some time has passed it is clearly advisable for the written version of the
contract to be agreed between the parties and retained for future reference.
A binding contract of any kind must contain the following elements:
Offer
Acceptance
Consideration
Intention to create legal relations
Offer
In legal terms an offer is an expression of intent to enter into a binding contract
with specific terms on acceptance. Offers may be conditional on some other
activity or criterion being achieved so, for example, if an offer of employment
is subject to the receipt of satisfactory references and the employee accepts the
offer, the contract will not be complete and binding until all the conditions are
fulfilled.
An issue which regularly arises is what constitutes a satisfactory reference.
In Wishart -v- National Association of Citizens Advice Bureaus Limited [1990] IRLR
393, Mr. Wishart was offered employment subject to satisfactory references. His
references disclosed significant sickness absence in his former employment. The
job offer was withdrawn and Mr. Wishart sued.
THOROGOOD PROFESSIONAL INSIGHTS 2

1 C R E AT I N G T H E C O N T R A C T O F E M P L O Y M E N T
The question before the Court of Appeal was what constituted a satisfactory
reference. In particular whether the test is objective or subjective. That is, does
the reference have to be satisfactory to a reasonable employer or to that partic-
ular employer who may have significantly higher or lower standards?
The Court of Appeal decided the case on a different point but held, obiter (that
is as a matter of guidance rather than by binding precedent), that the use of
satisfactory in this context meant that an employer is reserving the right to
make up its own mind as to whether the references are satisfactory as opposed
to setting an objective condition.
Invitation to treat
A distinction must also be made between an offer whether conditional or not,
and an invitation to treat.
The difference is that, if a candidate accepts an invitation to treat, they are, in

fact, making an offer indicating their willingness to apply for a role. It is in this
context that adverts for roles must be seen as should application forms for specific
roles.
Advertisements do not constitute offers capable of acceptance but merely invita-

tions to make applications. It is when a formal offer of employment is made that
an acceptance becomes possible.
Acceptance
Acceptance must be absolute and unconditional. If the acceptance is subject to
conditions or is based on terms other than those in the original offer it will amount
to a counter offer. The employer is free to accept the counter offer if he/she so
wishes.
The counter offer operates to terminate the original offer. If the candidate purports
to accept a varied offer, and this counter offer is rejected by the employer, then
the candidate can no longer go back and accept the original offer unless it is
re-made.

Withdrawal of offer
A common problem area arises when an offer made in error is accepted by the
candidate. Offers may be withdrawn at any time before they are accepted even
if they have been stated to be valid for a specific period of time and that period
of time has not yet expired. Withdrawal of an offer is valid when it is commu-
nicated. Acceptance is valid when it reaches the offeree with one exception, that
is when it is posted. Postal acceptance occurs when it is posted rather than when
it is received.
This means that if an offer is withdrawn by letter and the acceptance is posted
before the withdrawal is received, a binding contract will have been created
between the parties.
In Sarker -v- South Tees Acute Hospitals NHS Trust [1997] IRLR 328 a binding
contract was created but was terminated before Mr. Sarker started work.
The Employment Appeal Tribunal held that the fact that the contract was set to
start at a later date did not mean that termination did not require notice in accor-
dance with the contract which had created the binding agreement.
An individual who claims breach of contract and succeeds is entitled to damages

to compensate him/her for the losses they have suffered. The measure of damages
amounts to the sum the individual would have recovered had the contract been
properly performed.
Normally this would amount to compensation for the proportion of the notice
period during which the contract would have been live, and salary and benefits
would have been paid.
The termination of the contract is a dismissal for the purposes of the Employ-
ment Rights Act 1996 and if the reason for it is one of the automatically unfair
reasons set out, e.g. pregnancy, then, because there is no applicable qualifying
period of employment for the automatically unfair categories, a claim for unfair
dismissal can be made.

Consideration
The doctrine of consideration is one of the most complex legal principles. At
its most basic it means that a benefit must pass from each party to the other. It
is a concept which is often difficult to apply in the employment arena. Usually
the consideration passing to the employee, namely pay, is easy to identify, but
in terms of the consideration which passes to the employer, this is usually said
to be the benefit of work done.
Intention to create legal relations

Without intention to create legal relations, contractual obligations cannot have
legal effect. In situations therefore where benefits are stated to be discretionary,
the parties are making it clear that there is no intention to create legal relations
and therefore they do not intend to be bound by the obligation to provide the
benefit.
In the terms of the exercise of the discretion and the potential breach of trust
and confidence see later (Chapter 4).
Statement of main terms and conditions

The law does not require a contract of employment to be in writing and, during
the first two months of employment, there is no duty on the employer to provide
any additional information as to the terms of the candidates employment.
However, Section 1 of the Employment Rights Act 1996 (ERA) requires that the
employee must be given a statement of the main terms and conditions of his
employment not later than two months from the beginning of the employment
(see below).
If an employer fails to provide written particulars and a claim is tagged on to

another claim, for example for unfair dismissal, an employees award can be
increased by between two and four weeks pay subject to the statutory
maximum of a weeks pay, currently 270 per week.
Technically the statement is not a contract, although it is very strong evidence

of what the terms of the contract are. By contrast, a document which is drawn
up as a contract of employment will provide direct evidence of what the terms
of contract are.

Contents of the written statement

The statement may be given in instalments during the two month period although
certain particulars must be included in a single document known as the Principal
Statement. These are as follows:
The name of the employer and employee; and
the date when the employment began; and
the date on which the employees period of continuous employment

began (taking into account any employment with a previous employer
for example, where the business has been taken over which counts
towards that period).
The statement must also contain details of the following particulars of employ-
ment which are applicable as at a date no more than seven days before the date
that the statement is given to the employee:
Scale of remuneration, or the method of calculating the remuneration;
the intervals at which the remuneration is paid (i.e. weekly, monthly

or at another interval);
any terms and conditions relating to hours of work such as details

relating to normal working hours;
terms and conditions relating to entitlement to holidays, including public

holidays and holiday pay;
the job title or brief job description of the work for which the employee
is employed;
either the place of work or an indication that the employee is required

to work at various places, and the address of the employer.

The remaining details which can be provided in instalments are terms and condi-
tions relating to:
Incapacity for work due to sickness or injury, including any provision

for sick pay;
terms and conditions relating to pension schemes and confirmation

as to whether or not a contracting out certificate is in force (a certificate
may be issued where an occupational pension scheme exists);
the length of notice which the employee is obliged to give and is entitled
to receive to terminate the contract of employment. There are statutory
minimum notice periods which apply to all employees employed for
one month or more; these are as follows:
Length of service Minimum notice
1 month less than 2 years 1 week (from employer)
2 years 2 weeks (from employer)
3-12 years 3-12 weeks (from employer on

the basis of one week per year
of service)
12+ years 12 weeks (from employer this

is the maximum)
1 month 12 + years 1 week (from employee)
where the employment is not permanent, the period for which it is

expected to continue or, for a fixed term, on which it is to end;
the particulars of any collective agreement which directly affects terms

and conditions including the persons by whom they were made where
the employer is not a party;
where the person is required to work outside the UK for more than
one month, the period for which he or she is to do so, the currency
in which the salary will be paid, any additional remuneration or benefits
and any terms and conditions relating to his or her return to the UK;
the statement must include a note specifying any procedure applicable

to the taking of disciplinary decisions relating to the employee or to
a decision to dismiss the employee or refer them to the provisions of
a reasonably accessible document which specifies such rules. It is useful
if the note specifically stipulates that the disciplinary procedure is not

a term of the employees contract. This is an important consideration

for employers as a result of recent cases in the Tribunals which have
held that in certain circumstances, employees would be able to claim
damages for breach of contract when a disciplinary procedure
which formed part of the employers contract was not followed (see
later).
The terms of the contract of employment

The parties to the contract may agree (subject to some specific exceptions) any
terms they wish. The terms of the contract may be written or oral, express or
implied.
Express terms
These are the terms which the parties have specifically discussed or agreed either
orally or in writing. They may also be terms which have been agreed by refer-
ence to collective documents accepted by the parties (see below). It is thus not
necessary for all express terms of the contract to be contained in a single written
contract.
Incorporated terms
Contract terms may become part of the contract of employment by incorpora-
tion where the contract expressly states that it is subject to the terms and
conditions of another relevant source, such as a collective agreement, work rules
or the staff handbook. Incorporation may also be implied by custom or past
practice in the industry. Once a term contained in a collective agreement is incor-
porated into the contract, then it applies to all employees despite the fact that
a particular employee does not approve of what has been agreed (Tocher -v-
General Motors (Scotland) Ltd 1990 IRLR 478) and whether or not he is a member
of the trade union.
Collective agreements
Collective agreements are generally made between employers and trade unions
and are not normally legally binding. When the union negotiates on behalf of
its members, it is acting as a principal and not an agent. Terms may, however,
become incorporated into individual contracts of employment if agreed

A collective agreement is defined in Section 178 of the Trade Union and Labour
Relations (Consolidation) Act 1992 (TULRCA) as an agreement or arrangement
made by or on behalf of one or more trade unions and one or more employers
or employers associations which relates to one or more of the items listed in
Section 178 (2). These are: terms and conditions of employment and conditions
of work, hiring, firing and suspension, allocation of work or the duties of employ-
ment between employees, discipline, union membership, union recognition,
facilities agreements, procedures and the other machinery of collective
bargaining.
Therefore, even though a collective agreement may not be enforceable between

the collective parties (the employer and the union), it may still be enforceable
between the individual parties (the employer and the employees). This is the case
even where the collective agreement expressly states that it is binding in honour
only. (Marley -v- Forward Trust Group Ltd (1986) IRLR, 1986 ICR 891, CA).
Not all terms will be incorporated into the contract of employment, only those
which are appropriate. Those which are essentially collective in nature will not
be classed as appropriate. Terms relating to pay, hours, holidays etc will be appro-
priate as opposed to those relating to conciliation schemes.
In National Coal Board -v- National Union of Mineworkers (1986) IRLR 439 (1986)
ICR 736, the judge decided a collective dispute procedure was not contractually
incorporated. In cases of ambiguity, the courts look to the intentions of the parties
to the collective agreement (Adams -v- British Airways plc (1995) IRLR 577).
Staff handbooks
In the same way as collective agreements, staff handbooks may be incorporated
expressly into the contract of employment by reference. Furthermore, where
the court can reasonably infer from the circumstances of the case that the parties
must have intended works rules to have contractual force, then they will be incor-
porated. For example, in Petrie -v- Mac Fisheries Limited 1940 1KB 258, a notice
about sick pay posted on the factory notice board had contractual effect.
If the principal contract does not expressly incorporate the collective agreement
or staff handbook, then the court will look to see whether the employee has
acknowledged the binding effect of the documents. For example, if they were
signed by the employee then obviously this may be evidence of the parties inten-
tion to incorporate the terms as terms of the employees contract of employment.

If there is no signature, then the Court will determine whether the employee
was put on notice of such terms and then assess how widely known and accepted
they are. If the terms are generally well known to the employee they may well
be incorporated into the individuals contract of employment.
Implied terms
These are terms which form part of a contract although they may not be specif-
ically referred to or stated by the parties. Implied terms have the same effect as
an express term but where an implied term is inconsistent with an express term
the express term will prevail. There are several ways in which terms may be
implied:
By conduct.
By custom and practice which must be reasonable, certain and

notorious.
For the purposes of business efficacy (Scally v Southern Health and

Social Services Board (1991) ICR 771)
By the officious bystander objective test.
As a characteristic term.
IMPLIED BY CONDUCT
The term is implied where the conduct of the parties indicates that they are in
general agreement about a particular matter. For example, where at the start
of his employment an employee regularly takes a 15 minute coffee break at
11:00am but there is no express term allowing it, the employee may argue that
the break was an implied term of the contract which the employer had accepted
by conduct. (see Aparau -v- Iceland Frozen Foods Plc (1996) IRLR 119, EAT).
One area of concern for employers is at what point a practice within the business
becomes a contractual right of the employee.
In the case of Quinn -v- Calder Industrial Materials Limited [1996] IRLR 126, this
very point was considered. In that case the employers had issued policy documents
with guidelines on enhanced redundancy payments. Over the years the terms
of the policy became generally known and it was used on four separate occasions.
When the applicant was dismissed by reason of redundancy, he brought a claim
for breach of contract because his employer had not made any payment in respect
of enhanced redundancy entitlements under the policy.

The Employment Appeal Tribunal held that the key factors in deciding whether
an enhanced scheme has become a contractual right are:
whether and how the policy has been drawn to the attention of the
employees
whether it has been followed without exception for a substantial period.
In particular the Employment Appeal Tribunal considered whether the

Employers had communicated the policy to the employees in a manner that
supported an inference that the employer intended to be contractually bound
by it.
IMPLIED BY CUSTOM AND PRACTICE
If it can be shown that a term is regularly adopted in the employers particular

trade or business the court may decide that such a term has been implied by
custom. Before the court will allow such a term to exist, it must be reasonable,
certain and notorious (Bond -v- CAV Ltd (1983) IRLR 360). This has been upheld
more recently by the EAT in Henry -v- London General Transport Services Ltd
([2001] IRLR 132 EAT).
The word reasonable has been held to mean fair (Devonald -v- Rosser & Sons
(1906) 2KB 728) and certain and notorious are interpreted as precise and well-
known. Once a custom is established, it is not necessary that an employee seeking
to rely on the custom knew of its existence.
IMPLIED TO GIVE BUSINESS EFFICACY
In the case of Liverpool City Council -v- Irwin (1997) AC 239 the court held that
a term will be implied into a contract if it is necessary to give the contract business
efficacy. In other words, the term is necessary to make the contract workable.
Examples of such terms quite often relate to mobility. For example, an employer
who employs an HGV driver with no express term requiring him to begin his
journey at any one of the employers sites, may imply a term into the contract
to the effect that the driver must begin his journey from any of the employers
sites that the employer stipulates depending on the journey the driver is likely
to make.
The courts justify interpreting the contract in such a way by claiming that the
parties must have intended the contract to work properly, and it can only be
capable of working properly by implying such a term. In this way, the courts
can take quite an active role in interpreting the contract. It is, therefore, best
practice to express the terms which are agreed. In Janes Solicitors -v- Lamb

Simpson 26.6.95 (EAT 323/94 unreported) the Employment Appeal Tribunal

implied a term allowing an employee to be paid in lieu of holiday entitlement
accrued, but not taken.
IMPLIED BY THE OFFICIOUS BYSTANDER TEST
This is an objective test which was first referred to in the case of Shirlaw -v-
Southern Foundries (1926) Ltd (1936) 2KB 206. Essentially, the court will imply
a term to exist where the term is so obvious that the parties must have intended
it to apply. The court supposes that if at the time the agreement was reached,
an officious bystander were to suggest some express provision in the contract,
the parties would both say oh, of course that should be included.
IMPLIED AS A CHARACTERISTIC TERM OF THE RELATIONSHIP
Under the common law, certain rights and obligations are characteristic of the
relationship of master and servant. On this basis, many terms may be held to
exist unless they are modified by expressly agreed arrangements, for example,
the employers duty to pay wages and take reasonable care of employees safety
and the employees duties of fidelity and obedience.
Employees implied duties
SERVICE
The obligation of an employee under a contract of employment is to carry out

the service for which he is employed in person, and his responsibility cannot
be delegated to another. A strike will usually amount to a breach of contract
because the employee is not willing to serve (Note: Employees are protected
from being dismissed (for unfair dismissal purposes) within the first eight weeks
of official strike action).
TO SERVE HIS EMPLOYER FAITHFULLY AND NOT ACT AGAINST HIS INTEREST
A term is implied into every contract of employment to the effect that an employee
may not set up a rival business during the period of employment without express
permission. However, preparation to set up a competing business after employ-
ment is not necessarily a breach of contract (Adamson -v- B and L Cleaning Services
(1995) IRLR 193). Nonetheless, the submission of a tender for future business to
a customer is unlawful competition, even if the employee was prepared to give
contractual notice expiring before work was due to start. It will also be a breach
of contract to attempt to persuade customers to transfer their business when
the employee leaves. (Wessex Dairies Ltd -v- Smith (1935) 2KB80).

COMPETENCE
A term is implied into every employment agreement that the employee promises
he is reasonably competent to do the job. Incompetence is therefore a breach
of contract (Harmer -v- Cornelius (1858) 5CBNS 236).
CARE
The employee impliedly promises to take reasonable care in the performance

of his duties. (Lister -v- Romford Ice & Cold Storage Co Ltd [1957] AC555).
OBEDIENCE
The employee should carry out the reasonable instructions of his employer. The
duties of obedience and fidelity are also owed to an employer to whom the
employee is seconded (MacMillan Inc -v- Bishopsgate Investment Trust plc (1993)
IRLR 393).
LOYALTY
Honesty the employee must be honest in the execution of the service but he
does not have to disclose his own acts of dishonesty (Bell -v- Lever Brothers 1983
ICR 801 AC). Senior employers who are under enhanced fiduciary duties may
have this obligation.
NOT TO MAKE SECRET PROFITS
An employee must not make a secret profit or take bribes. He may be compelled
to account to his employer for the secret profit or bribe (Boston Deep Sea Fishing
& Ice Co -v- Ansell (1888) 39 Ch D 229)
CONFIDENTIALITY AND TRADE SECRETS
Inventions and discoveries made during the course of employment, belong to

the employer in the absence of any agreement to the contrary.(British Syphon
Company Ltd -v- Homewood (1956) 2 All ER 897)
A breach of confidence is an independent equitable wrong irrespective of the

employment relationship (Faccenda Chicken Ltd -v- Fowler (1984) IRLR 61),
however, the duty of confidence is greater during the duration of the employ-
ment contract. Current employees are under an implied obligation not to use
or disclose confidential information. Former employees are required only to keep
trade secrets confidential, that is, information so highly confidential it requires
the same protection as a trade secret.

In Faccenda Chicken, the Court of Appeal set out the test for a trade secret.
What is the nature of the employment? Does the employee regularly

handle confidential information? If so, the duty of confidentiality is
greater.
What is the nature of the information and is there a need for it to be

protected?
Did the employer impress upon the employee that the information was
confidential?
Can that information be easily identified and separated from information

which the employee is free to use?
The duty of confidentiality is, in principle, unlimited, however it ends when the
information loses its confidential nature, for example, where it becomes public
knowledge or outdated.
Employers implied duties
DUTY TO PROVIDE WORK
In some cases it may be argued that, as long as the employee is fully remuner-
ated, he/she can be kept idle. However, if an employee is paid by commission
or is a piece worker, or if his skills would atrophy through lack of use, there is
an implied duty to provide work. In Langston -v- Amalgamated Union of
Engineering Workers (1974) ICR 180, the Court of Appeal indicated that a skilled
worker has a right to have the opportunity to exercise his skill.
In the case of William Hill Organisation Ltd -v- Tucker (1998) IRLR 313 the Court
of Appeal held that there may be an implied obligation upon the employer to
provide work to an employee during the employees notice period, where the
employees skills require frequent exercise. In this case the Court of Appeal refused
to enforce a garden leave injunction against a senior dealer.
DUTY TO INDEMNIFY
To indemnify in respect of costs, claims and expenses which arise through the
carrying out of duties.

DUTY OF MUTUAL TRUST AND CONFIDENCE
There is a duty of mutual trust and confidence owed by the employer and
the employee to each other.
The following are examples of breaches of this term:
being accused, without reasonable cause, of theft (Robinson -v-

Crompton Parkinson Ltd (1978) IRLR 61);
exercising an express clause in such a way as to render performance

of the contract impossible (United Bank -v- Akhtar (1989) IRLR 507);
In Aspden -v- Webbs Poultry & Meat Group (Holdings) Limited [1996]
IRLR 521 the Court held that the employer was under an implied duty
not to terminate the employees contract of employment if, in the
circumstances, this would result in the employee ceasing to be entitled
to payment under a permanent health insurance scheme. The employer
can still dismiss a sick employee in these circumstances if dismissal is
on the grounds of gross misconduct or on grounds of redundancy (Hill
-v- General Accident Fire & Life Assurance Corporation [1998] IRLR 641.
If dismissal is due to an employees fundamental breach of contract,

for example failure to comply with the necessary internal policies, then
it will not be a breach of trust and confidence to do so Briscoe -v- Lubrizol
Limited, Court of Appeal 2002 EWCA CIV 508.
References
The employer is under no implied duty to provide a reference to employees but
if he or she does then there is a duty of care to the employee about whom they
write to take reasonable care in the preparation of a reference. (Spring -v- Guardian
Assurance plc & Others [1994] IRLR 460).
Honest business
In Malick -v- BCCI [1997] 3 IRLR 1, the House of Lords established that claims
for stigma damages could be brought on the basis that the BCCIs conduct was
in breach of the implied term not to damage the relationship of trust and confi-
dence. Therefore if the employees can demonstrate that they had a measurably
increased risk of unemployment attributable to the stigma of having worked
for a previous employer, and from which an inference of loss could be drawn
on the basis of a lost chance, then they were entitled to recover in breach of
contract.

Not to suspend an employee without reasonable cause

In the case of Gogay -v- Hertfordshire County Council IRLR 2000 the High Court
held that the decision of Hertfordshire County Council to suspend a residen-
tial care worker, after one of the children made allegations of abuse, was in breach
of contract. The allegations against Miss Gogay were unfounded and she was
reinstated quickly, however she had suffered depression in the meantime and
never returned to work.
The Court of Appeal held that the decision to suspend was a knee jerk reaction
and other options could have been considered. In the circumstances there was
a breach of contract.
Equal pay
The Equal Pay Act 1970 applies to men and women and deems an equality clause
to be included into contracts of employment. The equality clause then modifies
the womans contract so that whenever she is engaged on like work, (work-related
as equivalent or work of equal value to a man), she is entitled to equal pay with
that man unless the employer can establish that the difference between the
womans and the mans contract is genuinely due to a material factor which is
not the difference of sex.
Where the equality clause is implied into a womans contract of employment

then it modifies that contract to include any beneficial term contained in the mans
contract which is not so contained in the womans. If any term of the womans
contract becomes less favourable than that contained in the mans contract then
the womans contract is again modified.
The Employment Quality (Religion or Belief Regulations) 2003, the Employment

Equality (Sexual Orientation) Regulations 2003, the Sex Discrimination Act 1995
and the Race Relations Act 1976 prohibit discrimination in terms and condi-
tions of employment on the grounds of:
Religion or belief
Gender
Sex or marital status (including pregnancy)
Race, ethnic, national origins, nationality and colour
Sexuality
Employers must also be aware of the possibility of indirect discrimination in terms

and conditions where a provision, criteria or practice is applied generally but

puts people at a particular disadvantage and that cannot be shown to be a

proportionate means of achieving a legitimate aims. Examples include the
requirement to work on particular days, e.g. Fridays or to work full-time.
The Disability Discrimination Act 1995 prohibits discrimination in relation to

the terms and conditions offered to disabled people unless their less favourable
treatment can be justified by a reason which is material to the circumstances
of the particular case and substantial.
Where terms in an employees contract of employment are discriminatory then

such terms are void where:
Their inclusion renders the contract unlawful;
they are included in furtherance of an act rendered unlawful by the

Act;
they provide for the doing of an act which would be rendered unlawful
by the Act.
If there is a term contained in the contract of employment which results in unlawful

discrimination against a party, then that term is not void but is unenforceable
against that party so that where an employee fails to comply with a discrimi-
natory term contained in his or her contract of employment the employer will
not be entitled to sue that individual for breach of contract.
Unfair contract terms

The Unfair Contract Terms Act 1977 makes some contract terms unenforceable.
Contracts can neither exclude nor restrict liability for death or personal injury
caused by negligence. Terms which impose strict liability for breaches of contract
or allow non performance or significantly different performance of contractual
obligations are unenforceable unless they are reasonable.
Fixed-term contracts
Fixed term contracts are subject to exactly the same rules as normal contracts
of employment, save only that they last for a specified period after which they
expire without further action by either party. No notice needs to be given to
terminate at expiry but notice clauses can be included in fixed term contracts
to allow either party to bring the contract to an end at some time before expiry.
Where employment continues after the date of expiry then the employee is
deemed to be working under the same terms and conditions as before but with

a reasonable notice period (subject to the statutory minima) implied into the
contract.
For the purposes of employment rights under the Employment Rights Act 1996,
expiry and non-renewal of a fixed-term contract amounts to a dismissal (ERA
Section 95(1)). Provided the employee satisfies the usual conditions for claiming
unfair dismissal, i.e. employment status, age and continuity of employment, then
claims for redundancy and unfair dismissal can be made.
WAIVER CLAUSES
Since 25th October 1999 it is no longer possible to agree to exclude the unfair
dismissal provisions in relation to fixed-term contracts (Section 18(1) Employ-
ment Relations Act 1999 which repealed Section 197(1) of ERA).
After 1st October 2002 fixed term employees on contracts of two years or more
can no longer waive their statutory right to receive redundancy payments on
the expiry or non-renewal of their contract. This rule applies to contracts signed,
extended or renewed after 1st October 2002. Waivers agreed prior to 1st October
2002 will remain in force until the contract is renewed or extended.
FIXED-TERM EMPLOYEES (PREVENTION OF LESS FAVOURABLE

TREATMENT) REGULATIONS 2002
These regulations came into force on 1st October 2002 and in summary they:
prohibit less favourable treatment in relation to fixed-term employees

terms and conditions of employment and other detrimental treatment
when compared to permanent employees where there is no objective
justification;
establish a framework to prevent the inappropriate use of successive

fixed-term contracts;
convert task or performance contracts into fixed-term contracts so that

unfair dismissal and redundancy rights apply;
give fixed-term employees the right to request a written statement in

relation to potential breaches of the regulations;
require employers to provide information to fixed-term employees about

permanent vacancies available in the organisation.

RESTRICTING THE USE OF SUCCESSIVE FIXED-TERM CONTRACTS
The use of successive fixed-term contracts is limited to a maximum of 4 years

unless their use for a longer period is justified. This requirement can be modified
by collective or workforce agreement which must provide alternative schemes
for preventing abuses and specify a maximum duration, a maximum number
of renewals and/or whatever objective reasons justify renewals.
If a fixed-term contract is renewed or extended in breach of the 4 years limita-

tion without justification, then that will become a permanent contract and
employees can make a claim in the Employment Tribunals for a declaration of
that fact. The clock began ticking on the 4 year limitation period on 10th July
2002 and any service prior to that date is disregarded.
PART-TIME WORKERS
The Part-Time Workers (Prevention of Less Favourable Treatment) Regulations

2002 have as their objective the prevention of less favourable treatment of part-
time employees in respect of their terms and conditions of employment as opposed
to comparable full-time employees. Part-time employees are also protected against
any detriment because of their part-time status.
This means that their:
rates of pay;
contractual and sick pay;
annual leave, maternity leave, parental leave and career breaks;
pensions;
training; and
redundancy terms
should all be equivalent unless there is an objective justification. In terms of

overtime, part-time employees must receive the same hourly rate of overtime
but only once they have worked more than normal full time hours rather than
when they exceed their part time hours.

Employees have the right to receive a written statement if they feel they have
been treated less favourably than a comparable full-time employee. They are
protected against unfair dismissal and being victimised on the grounds that they
have:
brought proceedings;
requested a written statement of reasons;
given evidence or information in connection with proceedings;
sought to assert their rights under the regulations;
alleged that their employer has infringed the regulations; or
because the employer believes they intend to do any of the above.
National Minimum Wage Act 1998

All workers have the right to be paid at a rate which is not less than the National
Minimum Wage.

THOROGOOD
PROFESSIONAL
INSIGHTS
Chapter 2
Reviewing and changing the
contract of employment
Paula Rome, updated by Tracy Luke
Handbook of policies and procedures ..............................................22
Legal status of the handbook .............................................................22
Maintaining flexibility .........................................................................23
Common content of the handbook....................................................26
HR Policies Key Policies and Procedures .......................................30
HR Policies Non-Key Policies ..........................................................40

Chapter 2
Reviewing and changing the
contract of employment
Handbook of policies and procedures

As a general rule, details specific to the employee will be set out in their individual
contract of employment. Such individual details will include salary/wages, hours
of work, place of work and job description or job title. Other more general policies
and procedures, which apply to all employees or large sections of the workforce,
are more often contained in an employee handbook. These policies and proce-
dures can be contractual entitlements of the employees or may be simply a
statement of best practice.
To comply with changes in legislation many handbooks are now seen as living
documents, undergoing constant review and revision. An employer must consider
how the handbook is going to be designed. Will it be bound or in loose leaf,
hard copy or electronic, or both? Is it worth assessing how often the policies
are likely to be amended? A loose leaf document or electronic format handbook
is easier to update at regular intervals.
The length of the handbook is also worth considering in light of the size and
complexity of the organisation. For some employers a basic handbook which
can be expanded as the business grows is ideal, whereas, for larger or opera-
tionally diverse organisations the handbook will normally be more comprehensive
and, as a result of this, is likely to need to be reviewed on a more frequent basis.
Legal status of the handbook

Terms of a contract can be written into the contract expressly, or incorporated
by reference to another document. Commonly, an individuals written contract
or Statement of Terms and Conditions will include some reference to certain
policies and procedures in the Handbook or intranet in todays electronic age.
There is the danger that unless this reference is drafted carefully the reference
may incorporate the policy as a contractual entitlement. Indeed, if a contract is
not carefully drafted and refers to the handbook then it is possible that the

2 REVIEWING AND CHANGING THE CONTRACT OF EMPLOYMENT
handbook as a whole may be deemed to be incorporated by reference and its

terms may become contractual entitlements of the employee.
If the policy or handbook is contractual, any failure to comply, to the letter, with
policies or procedures is a potential breach of contract. This would enable the
employee to pursue a claim against the Employer in either an Employment
Tribunal or through the ordinary courts.
As well as being a potential breach of contract there is also the danger that the
employers actions might amount to a constructive dismissal of the employee
where, by changing a policy or procedure, this change strikes at a fundamental
right of the individual. The right to claim constructive dismissal will apply to
employees with over 1 years continuation of employment.
Employers will therefore see, when drafting their contracts and handbooks and
the policies and procedures such handbooks contain, the need carefully to
consider whether they are willing to accept the implications of being contrac-
tually required to comply in full with such policies. If not, it is possible to draft
contracts in such a way so as to, expressly, not incorporate the handbook or to
limit incorporation to specific parts. Careful wording in order to maintain flexi-
bility for the employer is highly recommended.
Maintaining flexibility
It is even possible to draft flexibility into contractual policies and procedures
by careful consideration of the wording which is used. Many handbooks contain
phraseology which allows flexibility for the employer, for example:
the employer may;
at the employers discretion;
this list is not exhaustive.
The use of such words seeks to maintain flexibility for the employer to extend
or on occasion avoid compliance with the policy procedures.
Some caution must be exercised in this area as expressing rights as being discre-
tionary may be overridden if the employer habitually, and without exception,
always applies the policy. There has been a great deal of recent case law around
these points, in particular, regarding the application of bonuses. At present, in
cases such as Mallone -v- BPB Industries plc (2002) CA, there is guidance that
the courts and tribunals will expect such discretion to be exercised in a reason-
able fashion and may even, if a procedure or policy is well known and has been

communicated to the staff and was used without exception, decide that the
employer no longer has the right to rely upon the discretion that they have
purported to protect.
The Mallone decision examined the concept of absolute discretion in a Share

Option Scheme. When Mallone was dismissed on no fault grounds, the Direc-
tors of BPB cancelled his share options. It was only when Mallone tried to exercise
his options that he discovered this. He successfully argued in the High Court
that the cancellation was unlawful and the court decided that the Directors had
acted irrationally.
BPB appealed but the Court of Appeal agreed with the High Court deciding
that, notwithstanding the contract allowing the Directors to exercise absolute
discretion, the options were granted as reward for past performance and future
loyalty. The decision to cancel the options when Mallones dismissal was on no
fault grounds and ignore his past good service was an irrational exercise of
their discretion.
This case follows the earlier discussion in 2000 in Clark -v- Nomara [2000 IRLR
766] which examined this need for even discretionary bonus payments to be
excised in a way which is not irrational or perverse.
Custom and Practice can also lead to an expectation of payment as can be seen
by the series of cases examining when enhanced redundancy payments should
be made. This was recently examined in Albion Automotive Limited -v- Graham
Walkers and others CA2002. The employer in this case had provided enhanced
redundancy terms in six previous redundancy exercises and, as a result, the
Tribunal examining the redundant workers claims in the present redundancy
considered the enhancement to be incorporated into the contract. The Court
of Appeal backed the original Tribunal decision.
It is common practice for employers physically to separate contractual policies

from non contractual policies in an attempt to prevent confusion. Policies that
an employer more commonly may accept as contractual include:
Hours of Work Policies;
Holiday Policies;
Absence from Work Policies;
Compassionate Leave Policies;
Maternity and Family Friendly Policies;
Equal Opportunities, Bullying and Harassment Policies and Procedures

Health and Safety Policies
Data Protection
Employers commonly exclude best practice policies which often include Disci-
plinary and Grievance Procedures. Statutory minimum discipline and grievance
procedures will come into force in October 2004. The Government has
withdrawn its original proposal that these procedures would be implied into
all contracts. Instead, it intends to wait and see how the initial proposals bed
down before deciding whether to make them contractual.
CONTENT OF THE EMPLOYEE HANDBOOK
Included below is a table showing the types of polices that might be included
in an Employee Handbook relating them to the relevant legislation surrounding
the policy. There is a brief summary of the effect of the legislation and also of
any proposed changes which relate to the relevant legislation or which may impact
on the policies.
COMMUNICATING POLICIES AND PROCEDURES
It is of extreme importance that the employees know of the existence of the

handbook and how they can obtain it. It is especially important for policies imple-
menting equal opportunities and prevention of harassment (otherwise often
known as Dignity at Work policies). Unless the employer can show that the
policies have been effectively communicated to employees they will not be able
to rely upon the policies to provide a defence against claims of harassment made
by employees. This is because the defence is based on the argument that the
employer had taken all reasonably practicable steps to prevent the harassment
occurring and an employer is unable to argue this if an employee has not seen
the relevant policies. Similar arguments would apply to the failure to commu-
nicate email policies and then attempt to discipline an employee for breaching
such a policy.

Common content of the handbook
Explanation of the scope of the handbook/introduction

This can be used to explain the purpose of the handbook and whether it is a
wholly contractual document. It can also outline those parts which are consid-
ered contractual and those which are best practice only. If the employee is
expected to update the handbook himself it can explain that the employee will
be sent updates and expected to file them. The introduction should also encourage
the employee to familiarise himself with the contents of the handbook and to
retain it for future reference. It is also very common, if a company or organi-
sation has a mission statement, to include this in the introduction to the handbook.
Equal Opportunities Policy

It is currently unlawful to discriminate on the grounds of sex, race, disability,
sexual orientation and religion or belief.
By October 2006 this will further be extended to prevent discrimination on the

grounds of age. A policy decision must be made at this stage whether or not
to include this protection in advance of the implementation by law, or to await
further guidance and amend policies as and when changes occur.
It is essential to include an equal opportunities policy in a handbook as tribunals

will expect all employers to have taken steps towards tackling discrimination
issues in the workplace and the implementation of a policy is seen as a funda-
mental first step towards supporting employees and dealing with these issues.
The Equal Opportunities Policy should seek to deal with equality of treatment
during the whole length of the contract from the initial recruitment stage to dealing
with the employee within the workplace, provision of recruitment and training,
up to the end of employment.
The policy can include outlined steps for employees taking complaints or can
cross refer to the grievance and/or harassment procedures.
Sickness Absence Policy

Given the ever rising rates of absence it is crucial to have policies in place which
outline the employees duties when absent from the organisation with regard
to reporting in and providing evidence as to the reasons for their absence.

Leave Policy
This will include leave entitlements and holidays, maternity leave, paternity leave,
parental leave. Details surrounding compassionate leave, time off for medical
and dental appointments and public duties should also be outlined.
Disciplinary and Grievance Policy

Normal disciplinary policies will include examples of misconduct; some of these
can be specific to the requirements of a particular organisation. Some businesses
may have particular rules regarding smoking, food handling or, if public author-
ities, may limit actions outside the workplace such as political activities.
Examples of conduct which can be seen as gross misconduct and which may
lead to instant dismissal (after, of course, a fair procedure is followed) will also
usually be given.
Policies normally outline the need for fair investigations and the need to allow
the employee and his representative to prepare their case. The accompanying
representative will normally be a colleague or trade union representative who
may be chosen by the employee for any hearing which could result in a formal
warning such as:
Verbal warning also recorded in writing;
Written warning;
Final written warning; or
Dismissal.
These disciplinary steps will normally be outlined in the policy with a clause stating
that the process can be entered into at any warning level depending on the severity
of the misconduct.
Grievance policies normally initially encourage employees to raise issues

informally with their line managers and if this does not resolve their problem
then more formal steps are outlined.
These steps normally include referral of the problem to a more senior manager,
sometimes in writing. If a meeting is to take place the employees have similar
rights to be accompanied as in disciplinary situations. In October 2004 new regula-
tions came into force which implemented the statutory discipline and grievance
procedures introduced by the Employment Act 2002. The Regulations require
employers to follow set procedures for dealing with disciplinary matters or
employee grievances. A failure by an employer to follow the disciplinary proce-
dure (other than in specific circumstances) will result in a finding of automatic

unfair dismissal if an employee brings a claim (a one year qualifying period is

still required). Failure by the employer or employee to follow either procedure
will mean that any compensation will be increased/decreased by 10%-50%
depending on who is at fault.
Harassment Policy
The harassment policy will link into the equal opportunities policies stating that
harassment on the grounds outlined in the equal opportunities policy will be
unacceptable. Details of what will be considered as harassment should be outlined
and should include as a minimum:
Verbal conduct and actions;
Physical conduct and actions; and
Non verbal conduct and actions
which will cause the recipient to feel embarrassed, humiliated or uncomfort-

able in their working environment. Specific examples can be given.
The employee should be given a suggested method of complaint which will

normally include a choice of formal or informal action. The likelihood of disci-
plinary action being pursued against any employee who has been found to have
breached the policy should be outlined.
Health and Safety Policy

All health and safety policies should outline the responsibilities of:
the Company; and
the Employee.
The policy should also outline:
Who has the responsibility for managing health and safety within the
organisation.
Those procedures for reporting any accidents and notifying the health
and safety managers of incidents within the organisation and any
observed dangers or potential dangers.
What training the organisation has put in place regarding health and
safety issues.
Public Interest Disclosure/Whistleblowing Policy.

The employer should encourage employees to raise genuine concerns about

how the employer operates their business within the Company. The employer
can use this policy to assure employees that their concerns will be taken seriously
and acted upon by the employer. The policy should outline how the employee
can pursue their complaint or concern within the Company and can outline
those situations and bodies to whom external complaint can be made and the
situations when this is appropriate. The employer might consider it worthwhile
to outline the actions they will take if an employee raises false concerns in a
malicious fashion.
Other useful policies to be considered

Less common but very useful policies include:
Flexible Working Policy.
No smoking Policy.
Company Car Policy.
Personal Records Policy.
Email and Internet Policy.
Personal Expenses Claims.
Access to Premises/Security Policies.
Alcohol and Drug Abuse Policy.
Policy on Personal Development.
Personal Conduct Policy.
Diversity Policy.
Dismissal Policies (often incorporated into the disciplinary policy).

HR Policies Key Policies and Procedures
1 Bullying and Harassment Policy and Procedure
RELEVANT LEGISLATION
Disability Discrimination Act 1995 (DDA), Race Relations Act 1976 (RRA),
Sex Discrimination Act 1975 (SDA), Employment Equality (Sexual
Orientation) Regulations 2003, Employment Equality (Religion or Belief)
Regulations 2003.
SUMMARY OF RELEVANT LEGISLATION
Harassment is unlawful where it falls within the scope of anti-discrim-

ination legislation. It may also be unlawful under criminal law and
negligence (see below).
The statutory definition of harassment is unwanted conduct with a

purpose or effect of violating dignity and creating an intimidating, hostile,
degrading, humiliating or offensive environment.
There is currently no specific, legal definition of bullying nor is there

an express legal remedy. However, employees with complaints of
bullying may pursue claims of unfair constructive dismissal, personal
injury or alternatively the employer may face criminal prosecution under
the health and safety legislation. It may be that the bullied or harassed
employee also has a legal remedy under the Criminal Justice and Public
Order Act 1994 and the Protection from Harassment Act 1997.
FORTHCOMING LEGISLATION AND EFFECT
The DDA was amended in October 2004 to incorporate the statutory

definition of harassment. Changes to the SDA are expected in 2005.
Age discrimination legislation is due by October 2006.

2 Data Protection Policy and Procedure
Data Protection Act 1998.
Employees have access rights to information kept about them.

Employers must ensure that employees are kept properly informed
about the storing and processing of personal data and that consent
is obtained where necessary.
Data protection Codes of Practice the Office of the Information

Commissioner has issued final versions of the first three Data Protec-
tion Codes of Practice. The fourth code of practice relating to workers
health is not yet finalised. The codes do not have legislative effect but
are designed to assist compliance with the act. Further details of the
codes of practice can be obtained from the Governments Data
Protection website at www.informationcommissioner.gov.uk.
3 Disciplinary Policy and Procedure
Employment Rights Act 1996.
Employment Act 2002.
In order to minimise the risk of a successful claim of unfair dismissal,

the employer must show that he has acted fairly towards an employee
by following a fair disciplinary procedure. An employer must provide
details of the disciplinary procedure to its employees.
Employment Act the Act has given effect to Regulations with the aim
of resolving disputes between employers and employees internally by
introducing statutory dismissal, disciplinary and grievance procedures
and a fixed period of conciliation. The Regulations can be accessed
via the DTI website www.dti. gov.uk/er/.

4 Dismissals Policy
(may be incorporated in the Disciplinary Policy)
An employee has the right not to be unfairly dismissed by his employer.

The employer must have a potentially fair reason to dismiss as outlined
by Statute (conduct, capability, redundancy, statutory bar or some other
substantial reason) and must carry out the dismissal fairly.
5 Email, Internet and Telephone Policy
Data Protection Act 1998, Regulation of Investigatory Powers Act

2000.
Employers must inform employees if they intend to monitor employ-

ees telephone calls or their use of e-mail or the internet and to what
extent and how such communication will be monitored.
Data Protection Codes of Practice part three of the employment practice

data protection code addresses workplace monitoring and other
issues relevant to this area. Further details of the codes of practice can
be obtained from the Governments Data Protection website at
www.informationcommissioner.gov.uk.

6 Equal Opportunities Policy

(see also Bullying and Harassment Policy and Procedure)
An employer must ensure that men and women in the same employ-
ment receive equal pay for equal work and that no employee is treated
less favourably on the grounds of sex, race, disability, sexual orienta-
tion, religion or belief.
7 Family Leave and Time-off Policy

an employer must show that he has acted fairly towards his employees.
It will be easier to show this if the employer has followed a fair proce-
dure. This policy can also incorporate parental leave rights if not covered
by a separate policy.
8 Grievance Policy and Procedure
An employer must provide details of its grievance procedure to its

employees.

9 Health and Safety Policy
Health and Safety at Work Etc Act 1974.
An employer must protect the health and safety and welfare of its
employees at work and third parties from risks arising from work
activities.
10 Holidays Policy
Employment Rights Act 1996, Working Time Regulations 1998.
An employee is entitled to four weeks paid annual leave (including bank

holidays) under the Working Time Regulations. Most employers will
also have contractual leave, which may be more generous, and provi-
sions to outline what happens to holiday entitlement on termination
of a contract or during notice periods may be included.
11 Hours of Work Policy
Working Time Regulations 1998.
An employee must not work more than an average of 48 hours per week
in any 17 week period unless the employee has agreed in writing that
this will not apply to him. An employee is also entitled to a 20 minute
rest break where the working day is longer than 6 hours, 11 consecutive
hours rest in every 24 hour period and an uninterrupted rest period
of not less than 24 hours in each seven day period.

The European Commission has commissioned research on the 48 hour

opt out and is discussing the issues with member states and stake holders.
Further details regarding the Working Time Regulations can be
obtained from www.dti.gov.uk/er/work_time_regs/index.htm.
12 Maternity Policy
Employment Rights Act 1996, Maternity and Parental Leave etc. Regula-
tions 1999, Employment Act 2002.
Employment Act 2002 the Act has introduced the following changes
for women whose expected week of child birth falls after 6 April 2003:
ordinary paid maternity leave increases from 18 weeks to 26 weeks,

regardless of length of employment;
an additional 26 weeks unpaid maternity leave for those employed

for 6 months at the notification week (the notification week is the
15th week before the expected week of child birth), giving a total
maternity leave period of 1 year;
26 weeks paid adoption leave (at the same flat rate as Statutory
Maternity Pay) and an additional 26 weeks of unpaid leave; for
employees with 26 weeks service at the date of notification by
the adoption agency that a child has been matched with the
parents;
right to make a written request to work reduced/flexible hours

and to have the request considered seriously. (Information
regarding the Act can be obtained from www.dti.gov.uk/er/.

13 Parental Leave Policy
Employment Rights Act 1996, Maternity and Parental Leave etc. Act
Regulations 1999.
Parents of a child under 5 (or an adopted child under 18) are entitled
to 13 weeks unpaid leave. A maximum of four weeks leave per year
can be taken until the childs fifth birthday (or five years from the date
of adoption). Parents of a disabled child are entitled to 18 weeks unpaid
leave which can be taken up to the childs 18th birthday. Leave can only
be taken in blocks or multiples of one week (except where the child is
disabled where leave can be taken in multiples of one day). The employer
can postpone leave in certain defined circumstances. Special provisions
are in place for parents of children already born when the Regulations
came into effect in 1999. The time in which they can take their 13 weeks
entitlement is limited and will end in March 2005.
14 Part-time Working and Job Sharing Policy

(and Flexible Working Policy and Procedure)
Part Time Workers (Prevention of less Favourable Treatment) Regula-

tions 2000. Employment Act 2002.
It is unlawful for an employer to treat a part-time employee less

favourably that its full-time employees. Flexible working request
policies will need to be incorporated or dealt with in separate policies.

15 Paternity Leave Contract
Maternity and Parental Leave etc. Regulations 1999.
The Employment Act introduced a right of two weeks paid paternity

leave for employees with 26 weeks employment at the notification week
(the notification week is the week 15 weeks before the expected week
of child birth). Unpaid parental leave may also be available.
16 Performance Management Procedure
In order to minimise the risk of a successful claim of unfair dismissal, an

employer must show that he has acted fairly towards his employees. It
will be easier to show this if the employer has followed a set procedure.

17 Public Interest Disclosure Policy
Public Interest Disclosure Act 1998.
An employee who discloses wrong-doings by their employer to a third

party in specific circumstances (e.g. where the employee thinks his
employer has failed to comply with a legal obligation) is protected from
being dismissed or victimised. A policy to encourage employees to
pursue concerns within the organisation should be drafted into the
handbook.
18 Sickness Absence Policy and Procedure
Disability Discrimination Act 1995.
It is unlawful for an employer to treat an employee less favourably than

other employees on the grounds of disability. An employer must make
reasonable adjustments where appropriate.
In order to minimise the risk of a successful claim of unfair dismissal

an employer must show that he has acted fairly towards his employees.
This is easier to show if the employer follows a set procedure.
Disability Discrimination Regulations have amended the existing

Disability Discrimination Act 1995 so as to increase the powers of the
Employment Tribunals regarding remedies and to extend the protec-
tions of the 1995 Act to areas of employment that were previously
excluded. This took effect from October 2004.

19 Flexible Working Policy and Procedure
The Employment Act 2002 introduced the right for working parents
of children under the age of 6, or 18 if disabled, to make a written request
to work reduced/flexible hours and to have their request considered
seriously.

HR Policies Non-Key Policies
1 Alcohol and Substance Abuse Policy
Health and Safety at Work etc. Act 1974.
An employer must protect the health, safety and welfare of its

employees at work and of third parties from risks arising from work
activities
2 Business Expenses Policy
3 Business Mileage Policy
4 Company Car Policy
5 Company Telephones Policy
6 Confidentiality Policy
An employer must ensure employees protect the data held on third

parties and protect third parties from having information released
without consent.
Data Protection Codes of Practice may have an impact on release of

data. The Codes are available on the Governments Data Protection
website at www.informationcommissioner.gov.uk.

7 Fixed term Employees Policy
Fixed Term Employees (Protection from Less-Favourable Treatment)

Regulations 2002.
Fixed Term Employees (Prevention of Less-Favourable Treatment)

Regulations these Regulations prevent the less-favourable treatment
of fixed term employees as compared to permanent employees and came
into force on the 1 October 2002. (Further details regarding the Regula-
tions can be obtained from www.dti.gov.uk/er/fixed/consult.htm).
Incorporated in the Employment Act 2002.
8 Internal Theft Policy

an employer must show that he has acted fairly towards his
employees. It will be easier to show this if the employer has followed
a set procedure.
9 Leave of Absence Policy
10 Personal Conduct Policy and Procedures
Generally found in public authority handbooks. Important for organ-

isations who wish to prevent employees bringing the organisation
into disrepute. Breach of such a policy is likely to be seen as gross
misconduct.

11 Personal Records Policy
Employees have access rights to information kept about them.

Employers must ensure that employees are properly informed about
the storing and processing of personal data and that consent is obtained
when necessary.
Data Protection Codes of Practice
Further details can be obtained from the Governments Data Protec-

tion website at www.informationcommissioner.gov.uk.
12 Recruitment Policy
Sex Discrimination Act 1975, Race Relations Act 1976, Disability

Discrimination Act 1995, Employment Equality (Sexual Orientation)
Regulations 2003, Employment Equality (Religion or Belief) Regula-
tions 2003.
It is unlawful for an employer to discriminate against any person on

the grounds of sex, race, disability, sexual orientation, religion or belief
in respect of recruitment.
This policy may be incorporated into the Equal Opportunities Policy

see above.
Legislation in relation to age discrimination is likely to have an impact

on such policies. This legislation will be implemented in October 2006.

13 Redundancy Policy and Procedure
Employment Rights Act 1996, Trade Union and Labour Relations (Consol-
idation) Act 1992.
Redundancy is potentially a fair reason for dismissing an employee.

However, the situation which leads to the dismissal must fit the statutory
definition of redundancy and a fair procedure must be followed. Where
an employer proposes to dismiss as redundant 20 or more employees at
one establishment, he should consult all the appropriate representatives
or any employees who may be affected. Having a policy in place can help
employees understand what will happen regarding redundancy.
14 Smoking Policy
15 Special Leave Arrangement Policy
16 Stress at Work Policy
Disability Discrimination Act 1995, Health and Safety at Work etc. Act 1974.
Stress leading to depression can amount to a disability. It is unlawful for

an employer to treat an employee less favourably than other employees
on the grounds of disability. An employer must make reasonable adjust-
ments where appropriate. Stress is also seen as a health and safety concern
and must be risk-assessed.

17 Temporary Agency Workers Policy
Sex Discrimination Act 1975.
Race Relations Act 1976.
Disability Discrimination Act 1995.
Health and Safety at Work Act 1974.
Agency workers do not have unfair dismissal rights, however they may
pursue a claim based on discrimination or health and safety legislation.
18 Time-off to Care for Dependants Policy
An employee is entitled to take a reasonable amount of unpaid time off

work where it is necessary in order to take action in respect of a depen-
dant, for example, if a dependent falls ill or is injured or if there is an
unexpected breakdown in the arrangements for the care of a dependant.
19 Training and Development Policy
20 Working from Home Policy (see Flexible Working Policy)

THOROGOOD
PROFESSIONAL
INSIGHTS
Chapter 3
Collective Agreements
Tom Player
Introduction..........................................................................................46
Legal enforceability .............................................................................47

into individual contracts ....................................................................48
Express incorporation.........................................................................49
Implied incorporation .........................................................................51
Incorporation by way of agency ........................................................51
Provisions restricting rights to take industrial action .....................52
Trade union recognition......................................................................53
Schedule A1..........................................................................................54
Drafting of collective agreements......................................................61

Chapter 3
Collective Agreements
Introduction
A Collective Agreement is an agreement reached between a union and an
employer, typically as a result of collective bargaining. The majority of Collec-
tive Agreements are reached on a voluntary basis with the employer agreeing
to recognise either one or more trade unions for collective bargaining purposes.
A Collective Agreement is not usually enforceable as a matter of law and is usually
concluded in a climate of co-operation between the parties.
A Collective Agreement may be incorporated into individual contracts of employ-

ment of the workers covered and thus assume contractual force indirectly.
There are various rules about the legal enforceability of Collective Agreements.
The Trade Union Labour Relations (Consolidation) Act 1992 (the Act) seeks to
define what is meant by a Collective Agreement. It refers to a Collective Agree-
ment as any agreement or arrangement made by, or on behalf of, one or more
trade unions and one or more employers or employers associations and relating
to one or more of the following matters:
terms and conditions of employment, or the physical conditions in

which any workers are required to work;
engagement, non engagement, termination, suspension of employment

or duties of employment, of one or more workers;
allocation of work or the duties of employment between workers or

groups of workers;
matters of discipline;
a workers membership or non membership of a trade union;
facilities for officials of trade unions; and
machinery for negotiation or consultation, and other procedures,

relating to any of the above matters, including the recognition by
employers or employers associations of the right of a trade union to
represent workers in such a negotiation or consultation, or in the
carrying out of such procedures.

3 COLLECTIVE AGREEMENTS
Collective Bargaining means negotiations relating to or connected with any

of the above matters. It is clear, therefore, that an agreement can be a Collec-
tive Agreement irrespective of whether it is formal or informal or whether it is
an oral agreement or in writing.
Legal enforceability
In order for a Collective Agreement to be legally enforceable there has to be
some intention by the parties to enter into a legal relationship. It is often the
case that Collective Agreements will specify aspirational principles and values
that both the union and the employer agree to adhere to. Such wording may
be vague and imprecise so as to make it particularly difficult to enforce. As such
there is a common law presumption that Collective Agreements should not be
legally enforceable unless the parties specifically agree that it should. This common
law position was clarified in the Act.
Section 179 of the Act stipulates that Collective Agreements should be conclu-
sively presumed not to have been intended by the parties to be legally enforceable
unless the agreement:
is in writing; and
contains a provision (however it may be expressed) stating that the

parties intend that the agreement should be a legally enforceable
contract.
Where there is a Collective Agreement that does satisfy the above conditions,
then it should be conclusively presumed by any Court or Tribunal to have been
intended by the parties to be a legally enforceable contract. It is possible for
part of a Collective Agreement to be legally enforceable if the parties confirm
in writing within the Agreement that one or all parts of the Agreement should
be legally enforceable. Where this is the case, the remainder of the Agreement
shall be conclusively presumed not to have been intended by the parties to be
a legally binding contract.
A straightforward point arising from the above is that oral agreements

between an employer and a union can, therefore, never be enforceable at law.
Furthermore, the stipulation that there should be a clear statement of the parties
intention to show that they accept legal liability for their commitments requires
the parties to commit to such a provision in a clear and unambiguous manner.


into individual contracts
It is a requirement of Section 1 of the Employment Rights Act 1996 that an
employee beginning employment is entitled to a written Statement of Particu-
lars of Employment (see chapter 1). This written statement of particulars of
employment should stipulate whether there are any Collective Agreements which
directly affect the terms and conditions of employment. This is an important
statutory provision particularly for employees whose terms and conditions of
employment, or at least some of their terms and conditions of employment, are
subject to collective bargaining.
Where an employer recognises the union for collective bargaining purposes and
there is a Collective Agreement in force, when endeavouring to establish precise
terms and condition of employment governing that individual, it is important
to have due regard to the terms of any Collective Agreement as well as to the
individual contract of employment. This is so, irrespective of whether or not
the Collective Bargaining Agreement between the employer and the union is
legally enforceable.
This is because a Collective Bargaining Agreement often contains the details

of how negotiations between the employer and the union will be conducted in
respect of terms and conditions of employment for the relevant employees. In
some cases the agreements will be incorporated into the individuals contract
without the need for express agreement by the parties to the contract (employee
and employer). Incorporation can occur in three ways:
express incorporation;
implied incorporation; and
incorporation by way of agency.

Express incorporation
For a collectively bargained term to be expressly incorporated into an individual
contract of employment, there has to be some clear reference, either in the contract
of employment or the Collective Agreement, that specific collectively bargained
terms shall form part of an individuals terms and conditions of employment.
On the face of it this would seem relatively straightforward but there are often
problems of interpretation.
The Court of Appeal in the case of Henry and Others -v- London General Trans-
port Services Limited 2002 IRLR 472, considered carefully the individual
contract of employment, the terms and conditions of employment and the effect
of a Collective Agreement.
London General Transport employed 1500 staff at different garages. The

employers and the recognised trade union, the Transport and General Workers
Union entered into negotiations relating to changes in terms and conditions of
employment. These negotiations resulted in a framework agreement which
contained details of reduced rates of pay and terms and conditions which were
generally less favourable to the work force. The union conducted a number of
work place meetings and thereafter informed the employers that the majority
of the 1500 employees affected had consented to the new terms. There was no
ballot of employees despite the fact that this was the previous practice on other
occasions when negotiations had resulted in contractual change. The Company
then drew up notices outlining the changes in pay and conditions and these were
displayed at the various workplaces. Employees were then asked to sign individual
statements of changed terms and conditions of employment.
With effect from 5th November 1994 new terms and conditions came into effect
at the Stockwell Garage. This was the case even though a number of employees
had refused to sign statements accepting the new terms. The Company received
a petition signed by more than 130 of the staff at Stockwell two days later
expressing their dissatisfaction with the framework agreement, but employees
continued to work under protest. There was a further petition submitted at the
Stockwell Garage again by approximately 130 staff in December 1994 and the
workforce requested a ballot in respect of the new terms and conditions, but
no ballot was held.
Ultimately proceedings were commenced in the Employment Tribunal in

November 1996 some two years later. The claim was an unlawful deduction-
from-wages application.

In the first instance the Employment Tribunal upheld the complaint of the
employees. The Tribunal were of the view that, notwithstanding that there had
been a tradition of collective negotiation between the Company and the union,
the agreement that had been reached between the union and the Company dealt
with fundamental changes including a reduction in pay and it was insufficient
to establish that fundamental changes could be incorporated into individual
contracts by virtue of collective bargaining, notwithstanding the existence of
the framework agreement. The Tribunal was looking for strict proof that
employees had accepted the terms and conditions. It appears that the Tribunal
was looking for evidence of a ballot. No ballot was conducted and the Tribunal
was not satisfied with the framework agreement that had been reached
between the Company and the union.
The Employment Appeal Tribunal upheld an appeal against the decision by the
employers. The EAT concluded that the Tribunal was wrong to conclude, because
the changes envisaged by the employer were fundamental i.e. they related to
pay, that it was necessary to demonstrate strict proof, by reference to custom
and practice, that employees had accepted the changes. The EAT also consid-
ered that the petitions in themselves were not sufficient evidence that employees
had not accepted the terms and conditions of employment which, when one
considers the size of the workforce involved, this was probably the correct decision
to have reached. The employees thereafter appealed to the Court of Appeal and
on 21st March 2002 the Court of Appeal dismissed the appeal. The Employment
Tribunals were wrong in holding that the framework agreement that had been
reached was insufficient evidence of the custom and practice which was capable
of affecting fundamental change to the terms and conditions of employment.
The Court of Appeal accepted that it is necessary when establishing a custom
and practice for there to be clear evidence of practice and that any argument
in support of custom and practice should be properly scrutinised and tested.
However, the responsibility on an employer to demonstrate strict proof in these
circumstances is not required according to the Court of Appeal. When estab-
lishing custom and practice it has to be more likely than not that a custom and
practice exists on the balance of probabilities.
A further point considered by the Court of Appeal in this case was the fact that
the employees themselves had worked for two years under the new terms and
conditions, notwithstanding that they were maintaining that the new terms and
conditions had not been accepted and that they were working under protest.
In this regard the employees relied on the petition. However, the very fact that
the employees had worked under the new rotas and terms of employment, as
had all of the other employees who had not signed the petition, was evidence
that they had accepted the revised terms.

Implied incorporation
In the absence of an express agreement, it is possible to infer agreement to incor-
porate the appropriate collectively bargained term. The distinction between
express incorporation and implied incorporation is that express incorporation
would ordinarily require the individual employment contract to expressly state
that certain of its terms are regulated by a Collective Agreement under Section
1 of the Employment Rights Act 1996. Implied incorporation is where there is
a clear custom and practice that terms of collective agreements are incorpo-
rated into individual contracts. In the case of Henry and Others -v- London General
Transport Services Limited it is in effect a combination of express and implied
incorporation. In that case, it was a framework agreement expressly agreed
between the Company and the union which intended to vary the terms and condi-
tions of employment of the work force. The union took the framework
agreement to employees and indicated thereafter that the majority of employees
had accepted the terms of the framework agreement. As stated above, the Court
of Appeal was satisfied that the union had authority to bind the employees to
the terms of the framework agreement and were satisfied that the unions word
that a majority of the employees had accepted the terms of the framework agree-
ment was sufficient. The Tribunal therefore took this view irrespective of the
fact that the terms of the framework agreement had not been signed or expressly
accepted by individual employees.
Incorporation by way of agency

Under the laws of agency, for a union member to be bound by an agreement
entered into by a union, the union must have authority to negotiate on the
members behalf. This can be actual or ostensible authority, once again express
or implied. Implied authority is that which is inferred from the conduct of the
parties and the circumstances of the case. In the case of Harris -v- Richard Lawson
Auto Logistics Limited, the Company and the union entered into a Closed Shop
Agreement covering employees of a Depot where Mr Harris was employed.
Clause 5 of the Agreement under the heading of Recognition dealt with the
position of the Shop Steward. It stated the Company will recognise the Shop
Steward and the Deputy Steward, formally elected by the members of the Depot,
as the official representatives of the union. The Stewards agree to act in a respon-
sible manner and confine themselves to specific issues relating to the welfare of
their members. There was an agreement reached between the Company and
the Shop Steward in 1996 to resolve problems over holiday pay. Mr Harris was

a lorry driver employed by the Company and in 1997 he volunteered for redun-
dancy. His holiday pay was calculated by reference to the 1996 Agreement
between the Company and the Shop Steward. He contended that this Agree-
ment was not binding and that he was entitled to be paid in accordance with
earlier agreements which would have meant that he would have received a further
4,290 by way of additional holiday pay. There was an issue before the County
Court as to whether or not a Shop Steward had actual or ostensible authority
to sign the 1996 Agreement and bind the drivers. Judge Poulton dismissed the
claim on the grounds that the Agreement was well within the Shop Stewards
implied or ostensible authority. This point was presented to the Court of Appeal
but the appeal was rejected and the Court of Appeal supported the view of the
County Court Judge. They agreed that the Shop Steward had apparent or osten-
sible authority to negotiate revised terms of employment and, as a result, the
terms of the agreement negotiated by the Shop Steward applied to Mr Harris
holiday pay entitlement.
Provisions restricting rights to

take industrial action
Notwithstanding the above and the ability of an individual or a Company to
enforce collective negotiated terms on the basis that they constitute an express
or implied individual contractual term, there are restrictions relating to provi-
sions which seek to prohibit the right of individuals to participate in industrial
action.
Any term of a Collective Agreement which prohibits or restricts the right of

workers to engage in a strike or other industrial action does not form part of
any contract between a worker and employer unless the following conditions
are met the Collective Agreement must be:
in writing;
contain a provision expressly stating that those terms shall or may be

incorporated in such a contract;
be reasonably accessible at the place of work to the worker to whom

it applies and be available to him to consult during working hours;
and
is one where each trade union which is a part of the Agreement is an

independent trade union.

It is a further condition that the terms of the Collective Agreement must be

expressly or impliedly incorporated into the individuals terms and conditions
of employment. Both provisions are contained in Section 180 of the Act and should
be read in conjunction with the trade unions statutory right to call upon its
members to take part in industrial action pursuant to other statutory provisions
of the Act, the details of which are dealt with in Chapter 7 below.
Trade union recognition

The Employment Relations Act 1999 (ERA) is the first significant piece of legis-
lation to enhance union powers since the Employment Protection Act of 1975.
This Act, contains the Governments Union Recognition Regime and amends
the Trade Union and Labour Relations (Consolidation) Act 1992 by adding a
new Schedule A1 to it. The provisions came into force on 6 June 2000. Prior
to this date, irrespective of a unions level of membership within an undertaking
and amongst particular workers, if a Company did not wish to recognise the
union for collective bargaining purposes and enter into a collective agreement,
there was no statutory mechanism available to a union to force the Company
to do so.
The procedure enabling trade unions to apply for recognition requires a formal
application to the Central Arbitration Committee (CAC). This process is compli-
cated. Schedule A1 is long and complex divided into nine parts with 172
paragraphs.
The CAC has been established for many years and was initially introduced to
arbitrate in particular disputes between unions and Companies. The CAC is a
permanent independent body with statutory powers whose main function is now
to adjudicate on applications relating to the statutory recognition or derecog-
nition of trade unions for collective bargaining purposes in circumstances where
recognition or derecognition cannot be agreed voluntarily. The committee consists
of a Chairman, (Sir Michael Burton an experienced Barrister), 11 Deputy
Chairmen, 24 members experienced as representatives of employers and 22
members experienced as representatives of workers.

Schedule A1
The following is an overview of the key provisions of Part 1 of Schedule A1.
Formal written request

In order for a union to commence the legal process for recognition it must make
a formal written request pursuant to Paragraphs 48 and 49 of the Schedule. The
written request must be provided to the employer and must be clearly presented
as a request for recognition under the Schedule. It must also state the
bargaining unit over which the trade union is seeking recognition rights. The
union must have a Certificate of Independence and the employer must employ
at least 21 workers on the date that the request is made, or employ an average
of at least 21 workers in the 13 weeks ending with that day.
Once a trade union has made a formal request for recognition there will be a
fairly short period of time, known as the first period, of 10 days at the end of
which the employer has to decide whether to:
agree to recognition;
agree to negotiate further; or
refuse recognition.
If the employer is agreeable to recognition, the parties will agree a bargaining

unit and agree that the union is recognised as entitled to conduct collective
bargaining on behalf of that unit. There is then no need to continue with the
statutory procedure because the union has recognition. There would, however,
be important negotiations between the employer and the union to agree the
precise terms of any collective bargaining arrangement as this will indirectly
impact upon individual terms and conditions of employment for the workers
in the bargaining unit irrespective of whether or not they are union members.
An employer may not be prepared to agree to recognition as a result of a formal

request by a union but, equally, it may not feel it is appropriate to reject the request
out of hand. In these circumstances the Schedule allows the parties a further
period of 20 working days (or longer by agreement) to enter into negotiations
about recognition. In many cases an employer and union choosing to trigger
this second period would seek the assistance of the Arbitration and Concilia-
tion Body known as ACAS to enable them to endeavour to reach an agreement.
This period of time would typically involve the company and the union meeting
to discuss the possibility of recognition. The parties may agree to pursue an alter-
native process to determine the issue of recognition, for example, by voluntary

ballot arranged in conjunction with ACAS with or without the assistance of an

independent ballot organisation.
If an employer rejects the request out of hand it is open for the union to make
a formal application to the CAC.
Application to the CAC

It is at this stage that the CAC will become formally involved for the first time.
The main duty of the CAC is to adjudicate an application for statutory recog-
nition and the role played by the CAC, both in helping employers and trade unions
to reach agreement and in making specific decisions, is critical to this process.
The CAC has prepared a guide for parties which is available upon request from
their offices. The guide is designed to explain the formal process to the parties
as well as at what stage decisions will need to be taken by the CAC. The CACs
approach is to encourage voluntary arrangements wherever possible and, if
appropriate, to advise the parties to seek the assistance of ACAS. Each appli-
cation will be heard by a panel of CAC members and will be chaired either by
the Chairman, Sir Michael Burton or, more likely, a Deputy Chairman. There
will be one member with experience of representing employees and one with
experience of representing employers on any panel. The panel will take all
decisions on the application and they will be supported by a Case Manager. The
Case Manager is the primary point of contact for the parties.
The statutory process involves the trade union completing an application form,
copies of which can be obtained from the CACs offices. The application form
identifies the union making the application and the employer to whom the appli-
cation is being made. It also requires the union to confirm that they have a
Certificate of Independence and asks them specific details about whether or
not they have made a formal request for recognition and what the Companys
response was. Importantly, the union is required to provide data about the
number of workers employed as well as details of the employees for whom they
seek collective bargaining rights, i.e. identifying the proposed bargaining unit.
The union is also required to provide details of what evidence, if any, that they
have that a majority of the employees within the proposed bargaining unit would
be likely to favour recognition.
Once an application has been received the CAC will send it to the employer who
will be required to complete a questionnaire which sets out his response to the
unions application.

Once the CAC have received this initial data they will be required to make a
number of key decisions:
firstly, the CAC must decide whether the application is admissible or

whether it should be rejected;
secondly, assuming the application has been ruled admissible, the CAC
must determine what the appropriate bargaining unit should be;
thirdly, if the bargaining unit is different from that initially proposed

by the trade union, the CAC has formally to determine again whether
or not the application remains valid;
fourthly, if the bargaining unit has membership levels in excess of 50%

in respect of the bargaining unit the CAC must determine if, despite
that fact, a secret ballot should be ordered.
The CAC also has to determine in all cases where a ballot is ordered, i.e. where
membership levels within the determined bargaining unit are less than 50%, if
the ballot should be at the workplace or postal and, where the union is successful
in the ballot or if recognition is ordered, what the method of collective
bargaining should be in the absence of agreement.
Admissibility of the application

The general provisions about admissibility are contained in paragraphs 33 to
42 of Schedule A1. An application to the CAC will not be admissible unless the
CAC decides that:
members of the union amount to at least 10% of the workers

constituting the bargaining unit identified by the union; and
a majority of workers in their relevant bargaining unit would be likely

to favour recognition of the union as being entitled to conduct collective
bargaining on behalf of the workers within the unit.
The first point is unlikely to be contentious as the union, in all probability, will
not proceed with an application to the CAC unless their membership levels are
considerably in excess of 10% within their claimed bargaining unit. The
second test, which requires the union to demonstrate that the majority of
employees within the bargaining, unit would be likely to favour recognition of
the union as being entitled to conduct collective bargaining has resulted in a
number of contested cases before the CAC. A union in seeking to demonstrate
that it has satisfied the above test will not only rely on membership levels but
will often rely on petitions signed by workers. This is because, where a trade

union offers no evidence as to the likely views of the majority of employees in

the bargaining unit, the application is likely to fail. In the case of NUM -v- Hatfield
Colliery Company (TUR1/55/2001) the CAC reached a view that, where support
for recognition of the trade union could not be reasonably inferred from actual
membership levels (in this case membership levels were at approximately 30%),
some other evidence of support for recognition was required and, in the absence
of such evidence, the application had to be rejected.
There are a significant number of cases in which unions have succeeded in having
their applications accepted, notwithstanding that union membership levels have
been considerably less than 50% and where there has been less than 50% support
for recognition amongst workers on any petition. This is because the CAC have,
in certain cases, relied on their own industrial relations experience to conclude
that, where membership levels appear to be rising significantly, notwithstanding
that they are at the time of making the decision below 50%, this in itself is suffi-
cient evidence that the majority of employees would be likely to favour recognition.
The CAC does not require petitions to be disclosed to the employer, although
they will typically scrutinise petitions themselves on a confidential basis. This
is the position that has been adopted by the CAC and is supported by the recently
revised guidance to the parties.
Determining the bargaining unit

Once the question of admissibility is determined there is a further period of time
known as the appropriate period, a period of 20 working days or longer as
ordered by the CAC. During this time the parties are required to try and reach
agreement on the appropriate bargaining unit. This involves the employer consid-
ering the unions proposed bargaining unit and assessing whether or not it is
appropriate. In many cases the Company will propose their own bargaining unit.
If the parties fail to reach an agreement on the appropriate bargaining unit, the
CAC will make a ruling within 10 working days of the expiry of the appropriate
period as to what the appropriate bargaining unit should be. It is possible for
the CAC to vary this time limit.
The principal criterion in determining the appropriate bargaining unit is that

it must be compatible with effective management. The CAC, when considering
whether a unit is compatible with effective management needs to take into
account:
the views of the employer and of the union;
existing national and local bargaining arrangements;

the desirability of avoiding small fragmented bargaining units within

an undertaking;
the characteristics of workers falling within the proposed bargaining

unit and of any other employees which the CAC considers relevant;
and
the location of workers.
In applying Schedule A1 in this regard, the most important decision is that of

the Court of Appeal in the case of Kwik-Fit Limited -v- the CAC (18 March 2002).
This case involved a dispute over the appropriate bargaining unit. The union
claimed it should be solely depots within the M25, the Company said that it should
be all the depots throughout the country. The Company lost before the CAC
but appealed to the High Court by way of judicial review. Whilst they won before
the High Court the matter was referred to the Court of Appeal who ultimately
restored the decision of the CAC.
The Appeal Courts view was that the CAC, in determining the appropriate
bargaining unit, should initially consider the unions proposal and determine
whether it is appropriate. The CAC are required to:
test the unions proposed unit in light of the Companys arguments

that a different unit is appropriate; and
thereafter, consider the appropriateness of the Companys alternative

bargaining unit if the CAC consider (in light of the Companys
representations) that the unions proposal is inappropriate.
If the bargaining unit that the CAC determine is different from that initially
proposed by the trade union, the CAC has formally to determine again whether
or not the application remains valid. This involves the CAC reapplying the admis-
sibility tests by reference to the newly determined bargaining unit.
Ordering of the secret ballot

Once the CAC has made a ruling on the appropriate bargaining unit (and deter-
mined, if necessary, the issue of re-admissibility) it is required to make a decision
as to whether a ballot should be ordered. The CAC will conduct a membership
check of employees in the bargaining unit by reference to the unions member-
ship records and the list of employees which they require the Company to submit.
If the CAC conclude that less than 50% of employees in the bargaining unit are
members of the union, then a secret ballot will be ordered to determine the
question of union recognition. Even where the union shows that it has member-

ship of 50% in the bargaining unit, it will be necessary for the CAC to order the
secret ballot if any of the following situations are applicable:
the CAC believes a ballot is required in the interests of good industrial

relations
a significant number of union members in the bargaining unit inform

the CAC that they do not want the union to conduct collective
bargaining on their behalf
membership evidence is produced to the CAC which leads it to be

believed that there are doubts whether a significant number of union
members in the bargaining unit want the union to conduct collective
bargaining on their behalf.
In this context membership evidence is evidence about the circumstances in

which the union members became members and about the length of time for
which union members have actually been members.
Holding a secret ballot

If the CAC is not satisfied that the majority of the workers constituting a
bargaining unit are members of the union, it must give notice to the parties that
it intends to arrange for the holding of a secret ballot. The purpose of a secret
ballot will be to ask workers whether they want the union to conduct collective
bargaining on their behalf.
When the CAC decides to hold a ballot it must decide whether the ballot should
be a workplace ballot or a postal ballot. In making their decision they should
consider the likelihood of the ballot being affected by unfairness or malprac-
tice if it were conducted at the workplace. The CAC will appoint an independent
person to conduct the ballot and will inform the employer and the union accord-
ingly. A Company faced with a ballot for union recognition is required to adhere
to the following:
firstly, to co-operate with the union and the independent person in

connection with the ballot;
secondly, to give the union reasonable access to the workers in the

bargaining unit.
thirdly, to give the CAC the names and address of those workers in
the bargaining unit and inform the CAC if any individual either joins
or leaves the bargaining unit.

There is a Code of Practice governing the unions right to access to workers

during recognition and de-recognition ballots. This document provides guidance
to the parties on how a unions access should be managed and what type of
access is appropriate in these circumstances. The Code requires the union to
submit its request for access to the Company in writing and typical access would
involve large group and/or small group meetings. The union would also have
a right to a notice board. The union is also entitled to provide literature to the
qualified independent person appointed to run the ballot to enable that
individual to post information to the home addresses of employees on the unions
behalf. The union is required to bear the cost of postage of such information.
If an employer fails to comply with its statutory duties set out above, the CAC
may issue a declaration that the union is recognised to conduct collective
bargaining on behalf of the bargaining unit.
The cost of the ballot will be shared between the employer and a trade union
on a 50/50 basis.
The union will win the ballot if it is supported by a majority of the workers who
vote and at least 40% of the workers constituting the bargaining unit. There-
fore, if the bargaining unit consists of 100 workers, 40 must vote in favour of
recognition with fewer than 40 voting against. If the union is successful in the
ballot, the CAC must issue a declaration that the union is recognised and is entitled
to conduct collective bargaining on behalf of the bargaining unit. If the
Company is successful in the ballot, the CAC must issue a declaration that the
union is not entitled to conduct collective bargaining on behalf of the bargaining
unit. If the union lose the ballot it is not allowed to reapply for recognition for
the same, or broadly the same, bargaining unit for a minimum of three years
from the date of the ballot result. Alternatively, if the union are successful in the
ballot it is entitled to be recognised for collective bargaining purposes for a
minimum of three years from the date of the ballot result.
If the union is successful in a ballot for recognition under the CACs procedure
and a Company wished to de-recognise the union at some future point, there
is a complicated procedure (again governed by Schedule A1) which requires
the Company to go through a number of steps before being able formally to
derecognise the union. The reality is that it is likely that this process would again
involve a further ballot.
Once the CAC has issued a declaration as to the ballot result, a further period
of time known as the negotiation period of 30 days (or longer by agreement)
is triggered. During this time the employer and the trade union (with the assis-
tance of the CAC, if required) aim to reach agreement on a method by which
they will conduct collective bargaining.

If the parties fail to reach an agreement, either party can refer the matter to the
CAC triggering the fifth period known the Agreement Period of 20 days or
longer as specified by the CAC. During this period of time the CAC again will
help the parties to reach agreement on how they will collectively bargain but,
if agreement proves impossible, the CAC will specify the method as to how collec-
tive bargaining will be conducted.
Imposed bargaining method

The imposed bargaining method is governed by the Trade Union and Recog-
nition (Method of Collective Bargaining) Order 2000. The main difference
between the bargaining method imposed by the CAC and a voluntary arrange-
ment is that it has effect as if it were a legally binding contract between the
parties. If one party believes the other is failing to follow the specified method,
that party may apply to the Court for an Order of Specific Performance ordering
the other party to comply. Failure to comply with such an Order could consti-
tute contempt of Court. Once a bargaining method has been imposed it can
be varied (including whether or not it is legally binding) by agreement
between the parties in writing.
There is very little to be gained by a Company failing to agree a bargaining method

with a trade union once the question of recognition has been determined by
the CAC. This is because the specified method is very prescriptive in its format
and requires the employer and the union to establish a joint negotiating body
with a specified number of representatives on both sides.
Drafting of collective agreements

Collective Agreements vary in complexity and detail. A well drafted Collective
Agreement ought to make it expressly clear, in the first instance, who the parties
to the agreement are with a precise definition of which employees within an organ-
isation are to be subject to collective bargaining. It may be in the Companys and
the unions best interests to ensure that the scope of the agreement is drafted as
widely as possible to avoid the recognition of a number of other trade unions
for similar classes of employees within an organisation.
General principles
Collective agreements will often contain a set of principles which are relevant
to the parties. A well drafted principles and values section in a collective agree-
ment should reflect the organisations business plan and will aim to ensure that

the parties co-operate for mutual benefit. Employers will want to ensure that
they retain the ability to manage the business in a way that enables them to operate
quickly and decisively should the need arise. A trade union would wish to ensure
that, whilst it is important for any organisation to be able to operate quickly
and decisively in business, this should not be to the detriment of employees. It
is in this section of the agreement that the Company and the union would seek
a commitment to resolve any differences in a constructive manner with the objec-
tive of avoiding any industrial action, if at all possible.
Consultation, negotiation and information

It is important for the parties to consider those issues which they are prepared
to consult about and those matters which will be a matter of negotiation for the
parties.
In relation to those issues which the employer agrees to consult upon, these are
likely to address the organisations consultation obligations as set out in the Act,
for example, collective redundancy situations, business transfers, health and safety
issues and matters affecting pension schemes. An employer should also
consider entering into sensible consultation concerning changes to working
practices as a matter of good industrial relations.
If recognition arises as a result of an application to the CAC, a union will be

entitled to conduct collective bargaining (i.e. negotiation rights) over pay, hours
and holiday. As a minimum, therefore, a trade union entering into a voluntary
arrangement would seek negotiating rights in connection with these three areas.
There is no definition of pay, hours and holidays within either the Act or Schedule
A1. If the parties are to reduce the potential for dispute as to what is a matter
of negotiation and what is a matter on which a union is entitled to be consulted,
the parties should consider defining terms.
Issues about which, as a matter of good industrial relations, a Company may

wish to inform the trade union can include, for example, investment issues,
economic trends and the financial and operational performance of a business.
However, in light of the forthcoming enactment of the Information and Consul-
tation Directive EC Directive No. (2002/14/EC) which the United Kingdom
committed to in March 2002, there will, in due course, be further information
and consultation obligations that a Company will be faced with which may well
have a bearing on a Companys relationship with a recognised trade union.

Broadly, Article 4 of the Directive imposes three obligations on employers:
Firstly, an obligation to provide information on recent and probable

development of the organisations activities and economic situation.
Secondly, to provide information and consult (in this context, defined

as meaning the exchange of views and the establishment of dialogue
between the employees representatives and the employer) on the
situation, structure and probable development of employment within
the organisation and on any anticipatory measures envisaged, in
particular, where there is a threat to employment.
Thirdly, to provide information and consult (which in this latter context

is defined as consultation with a view to reaching agreement on
decisions within the scope of the employers powers) on decisions likely
to lead to substantial changes in work organisation or in contractual
situations, including situations already covered by the existing EC
Directive on collective redundancies (98/59 EC) and any other existing
obligations to consult.
The Directive will apply to:
a) undertakings employing at least 50 employees in any one Member State;

or
b) establishments employing at least 20 employees in any one Member

State.
Article 2 defines an undertaking as a public or private undertaking carrying

out an economic activity, whether or not operating for gain, which is located
within the territory of the Member States.
Establishments are also defined under Article 2 as a unit of business defined

in accordance with national law and practice and located within the territory
of a Member State, where an economic activity is carried out on an ongoing
basis with human and material resources.
The implementation phases in the UK are:
Three years from adoption: undertakings with at least 150 employees

or establishments with at least 100 employees (April 2005).
Four years from adoption: undertakings with at least 100 employees

or establishments with at least 50 employees (April 2006).
Five years from adoption: undertakings with at least 50 employees or

establishments with at least 20 employees (April 2007).

Information and Consultation of Employees Regulations 2004

In July 2004 the government issued what are effectively the final draft regula-
tions to be known as the Information and Consultation of Employees Regulations
2004. The government have also published draft DTI guidance in respect of the
regulations.
When the law is effective in April 2005 (in respect of undertakings employing
more than 150 people), then employees may at any time trigger the legal regime
by making a request to the employer to establish an information and consulta-
tion forum. A request can be triggered by 10% of the employees in the
undertaking. The request is likely to be in the form of a petition and it may be
that a Union that is seeking consultation rights and collective bargaining will
organise an employee petition in this regard. The request to file such a petition
can be made either directly to the employer or the petition can be sent to the
Central Arbitration Committee. It is possible in limited circumstances for the
employer to challenge the request on the basis that it contains false informa-
tion but generally, in the majority of cases, the numbers will be right and therefore
the request will be allowed to proceed. A trade union has the right to ask the
employer to provide the number of employees currently employed within the
undertaking and therefore the employees (or the union) will know upfront how
many signatories it needs to satisfy the 10% test.
What happens next will depend upon whether the employer wants to argue that
it has an existing information and consultation process in place which complies
with specific criteria set out within the regulations. The criteria for existing
arrangements are that the arrangement:
is in writing.
covers all employees of the undertaking.
has been approved by the employees.
sets out how the employer is to give information to the employees or

their representatives and to seek their opinions on such information.
If the employer decides that an existing information and consultation proce-

dure is in place then the employer can, in these circumstances, arrange a ballot
in support of the existing arrangements. Where there is no existing arrange-
ment in place the employer will be required to elect or appoint negotiating
representatives for the purposes of seeking to agree an information and consul-
tation forum. For the existing arrangements to be overturned in a ballot more
than 40% of employees must vote to endorse the original employee request and

that 40% must also amount to a majority of those that vote. A ballot must be
fairly run and all employees must be entitled to vote. A ballot must also be in
secret.
The great advantage for an employer who holds a ballot in such circumstances
and then goes on to win the ballot is that no further challenge to existing arrange-
ments is possible for a period of three years.
It is also possible for the existing arrangements to cover groups of undertak-

ings where there are a number of different subsidiary companies. Where there
are no existing arrangements in place, the law goes on to make clear that the
employer must elect negotiating representatives and initiate negotiations
within one month with those representatives with a view to reaching an agree-
ment on an information and consultation structure for the particular business.
There is a period of six months for the agreement to be reached or longer by
agreement. Where agreement is reached then the employees must approve the
agreement. Employee approval in these circumstances means that at least 50%
of employees must approve the arrangement in writing or there must be a ballot
showing approval. Additionally, the agreement must be signed by a majority
of the negotiating representatives. Ultimately in the event of no agreement there
are default information and consultation provisions which apply and which are
more onerous (on the employer) than a negotiated agreement may be. There is
therefore an incentive for Companies to familiarise themselves with the default
provisions and consider either establishing a pre-existing agreement or at least
be prepared to manage information and consultation in the workplace in such
a way as to minimise the likelihood of a request being submitted by employees
and/or the union.
Working with the trade union

It is sensible in any collective agreement to specify a framework as to how the
Company and the trade union will work together. For example, is it proposed
to establish a negotiating body for consultation and negotiation purposes? This
area of the agreement should make it clear how often the parties propose to
meet and also what the constitution of the negotiating body will be. Further-
more, if a Company has any requirements in terms of the type of individual in
their employment who can be considered as a trade union representative by
reference to length of service or disciplinary records, then this should be specif-
ically set out in any agreement.

Trade union membership

A trade union may wish to consider requesting a Company to operate check
off. Check off is a method by which an organisation deducts union member-
ship fees from employees who are union members directly from their salary with
a view to remitting payment to the appropriate union. Employers should be aware,
however, that if they are prepared to agree to this pursuant to any request by
a union, the specific consent of individual employees is needed in writing before
any deductions can be made.
Trade union facilities

Where an organisation is able to provide the recognised union with facilities
to carry out their responsibilities then parties may wish to specify this in any
agreement. It is not unusual for Companies to provide a notice board for official
union notices and minutes.
Equal opportunities
There will often be a section in a voluntary agreement which states that both
partners to the agreement are committed to promoting equal opportunities
regardless of colour, race, creed, marital status, age, sex, sexual orientation, polit-
ical affiliation or ethnic origin. This is an important aspect of any agreement
for many organisations. Other areas of sensitivity relevant to a particular business
can be built into any voluntary agreement.
Avoidance of disputes procedure

For many employers the ability to ensure that the trade union adheres to the
provisions of any disputes procedure and its various stages before considering
recourse to industrial action is often very important. A disputes procedure typically
sets out the various stages of the procedure and at what point senior trade union
officials and managers should intervene and whether or not the parties are
committed to involving ACAS mediation and/or arbitration.

Termination
If voluntary there is no requirement for an agreement to last for any specified
period. Typically a collective agreement will contain a provision which entitles
either the union or the Company to terminate it upon notice. The very fact that
collective agreements are generally binding in honour only would, in any event,
enable a union or a Company to depart from the agreement, often without legal
consequence, irrespective of any notice provisions relating to the termination
of the agreement.

THOROGOOD
PROFESSIONAL
INSIGHTS
Chapter 4
Practical drafting considerations
Tom Player
Introduction..........................................................................................69
Hours of work ......................................................................................71
Role and responsibilities.....................................................................71
Building flexibility into contracts.......................................................72
Express flexibility clauses ...................................................................72
Place of work........................................................................................73
Deductions protection of wages .....................................................75
Right to search .....................................................................................77
Employee benefits................................................................................77
Working time .......................................................................................79
Enforcement of the Regulations ........................................................82

Chapter 4
Practical drafting considerations
Introduction
Contracts of employment are made up of a variety of terms and conditions which
set out the respective obligations for both employer and employee.
As with any contract, once these and any other terms have been agreed between
the parties, they become binding and any attempt to vary them unilaterally will
constitute a breach of contract.
As outlined in Chapter 1, there are different types of contractual terms which

an employer needs to consider when drafting a contract of employment:
Express Terms
Whether agreed orally or in writing, express terms will be construed by the Courts
at their face value providing such terms are both clear and complete. If either
or both of these qualities are missing, other evidence to show the intention of
the parties will be considered to assist in the contracts interpretation.
Implied Terms
Certain terms will be implied into a contract by the courts despite the fact that
they are not expressly stated in writing.
Furthermore, the law imposes upon the parties to an employment contract implied
contractual terms which are considered central to the employment relationship.
These include the relationship of trust and confidence, placed upon both parties
to the contract, as well as the employers duty to take reasonable care to ensure
the health and safety of employees.

4 P R A C T I C A L D R A F T I N G C O N S I D E R AT I O N S
Incorporated Terms
Additional terms may be expressly incorporated into a contract of employment
from other sources such as a trade union collective agreement, a staff handbook
or health and safety procedures. In Airlie & Ors -v- City of Edinburgh District
Council [1996] IRLR 516 the employer reduced the staff incentive bonus which
was detailed in a collective agreement without the consent of the employees or
the Trade Union although the code of practice governing the collective agree-
ment was expressly incorporated into the individual contracts of employment.
The code of practice contained provision for the review of the bonus scheme.
The Court held that, although there was no express permission within the code
authorising unilateral variation, there were a number of provisions which
indicated that the employer had the right to control the operation of the scheme.
Consequently, the employers, having undertaken a review of the scheme in accor-
dance with the terms of the code of practice, were entitled unilaterally to determine
any adjustments to the bonus scheme.
In practice, therefore, contracts of employment are often made up of express

contractual provisions contained in a written contract or detailed in a collec-
tive agreement. In addition there may be further contractual provisions which
become implied into the contract of employment or which have been agreed
orally between the parties. From the employers perspective it is important to
try and create certainty and clarity as to what terms between the parties ought
to be included in a contract of employment. Wherever possible the employer
should give careful thought to the content of contractual documentation prior
to the commencement of the individuals employment and in advance of issuing
any statement of particulars of employment pursuant to section 1 of the Employ-
ment Rights Act 1996 (the Act).
The actual terms of the contract will depend upon the nature of the role to be
performed by the individual and contracts of employment vary in terms of detail
and complexity. By way of example, a senior individual who is in receipt of confi-
dential and proprietary information as part of their role and has access to customer
lists, sensitive business data and has an intimate knowledge of the Company,
ought probably to be subject to correctly drafted confidentiality clauses and
possibly some post termination restrictions (see Chapter 4). This chapter is
intended to provide guidance on the practical drafting considerations that ought
to be taken into account when preparing the contract of employment in the first
instance so as to ensure that there is clarity between the parties with a view to
minimising the potential for any future breakdown in relationships.

Hours of work
In many cases employees have normal hours of work and it is a requirement
under section 1 of the Act to detail these in writing for employees. When preparing
a written statement in this regard or drafting a contract of employment the
Company should consider whether normal working hours are likely to vary from
time to time and whether the Company require flexibility in terms of the hours
of work. If, for example, the employment is governed by a shift pattern, it would
be essential, should the Company wish to reserve the right to vary the shift pattern
(arising from a change in business circumstances), to reserve the express contrac-
tual right to modify it. Failure to allow sufficient flexibility in the contract of
employment to vary working hours or shift patterns will make it extremely diffi-
cult for a Company to implement such changes.
In the event that there is a right to vary working hours, either in the contract
of employment or in accompanying shift pattern documentation, it would be
in the interest of good industrial relations for employers to allow for a period
of notice to enable employees to manage the transition to an alternative shift
pattern with minimum disruption to their personal lives.
In the European Court of Justice case Lange -v- Georg Schunemann Gmb H 2001
IRLR 244 the European Court of Justice ruled, under Article 2(1) regarding the
Proof of Employment Relationship Directive, that an agreement relating to
overtime was an essential aspect of the contract which must be mentioned in
written particulars.
As such, if the employer does require employees to work overtime either on a

voluntary or compulsory basis from time to time, then this ought to be included
in the written contract of employment.
Role and responsibilities

It would be normal to provide the employee with his job title or a brief descrip-
tion of the work which he is employed to do. The European Court of Justice
indicated in the case of Kamplemann and Others -v- Landschaftsverband
Westfalen-Lippe 1998 IRLR 333 that, in certain cases, simply providing the employee
with a job title may not be sufficient. As such it is advisable for further details of
the employees role to be provided. If a Company require flexibility on the part
of the employee then, rather than simply providing a list of duties and respon-
sibilities, it is sensible to ensure that the contract states that any list is not intended
to be exhaustive and that the employee will comply with any reasonable instruc-
tions that the Company may issue from time to time.

Building flexibility into contracts

It is possible to draft contractual clauses relating to such terms as hours of work,
roles and responsibilities in such a way that they allow for reasonable flexibility.
Although there are certain aspects of flexibility which are implied into employ-
ment contracts, it is obviously in the interests of the employer to provide an express
right to vary the contract of employment so that terms can be varied at any point
in the future to reflect business needs where necessary. An express clause allows
the employer the flexibility of altering terms of employment in the event that
the Company need to make such changes, due to economic or restructuring
reasons, at any point in the future.
Flexibility can be implied into a contract. For example, an employees job title
can imply that the job will entail a variety of tasks. The employer needs to take
care in this regard, however, as a job title is significant as can be seen from the
case of Haden Ltd -v- Cowen 1982 IRLR 314. The individual in this case was
employed as a Divisional Contracts Surveyor. The Court held that the employer
could not, therefore, transfer him to any job as quantity surveyor despite an express
provision for flexibility in that the employee would be required to undertake any
and all duties which reasonably fall within the scope of his capabilities.
Express flexibility clauses

Contracts of employment sometimes include express flexibility clauses which
give the employer the right to change the employees job duties, hours of work
or their place of work. It is clear that an express flexibility clause, drafted with
sufficient clarity, will for example, enable an employer to transfer an employee
to other work without acting in breach of contract.
In Hussman Manufacturing Ltd -v- Weir 1998 IRLR 288, the employee had been
working on a night shift since 1985 and his pay included a night shift premium.
In March 1996 a three shift system was introduced with the result that work
was no longer available for the employee on the night shift and, therefore, he
was no longer eligible for the night shift premium. The employee did not consent
to the reduction and presented a complaint to a tribunal alleging unlawful deduc-
tion from his wages. The tribunal found that, under the terms of the collective
agreement with the relevant trade unions, the employers were contractually
entitled to move employees from one shift to another. Where an employer acted
within the contract of employment, and a resultant loss of income was caused
to the employee, that loss did not render the employers act a breach of contract.

Consequently, where an employer is seeking to rely on a flexibility clause, care

must be taken to ensure that these clauses are not drawn too widely as such provi-
sions are likely to be unenforceable. For example, a clause stating the employer
reserves the right to make any changes in the employees contract of employment,
at the employers discretion, without notice is unlikely to be enforceable.
Further, care must be taken to ensure that the change proposed is in fact covered
by the flexibility clause. For example, in White -v- Reflecting Road Studs Limited
1991 IRLR 331, the contract only authorised the employer to transfer employees
if the requirements of operational efficiency made it necessary. In this case it
was held that the company had reasonable grounds to move the employee and
his transfer to another department, which resulted in a reduction in pay, was
lawful.
When drafting or applying flexibility provisions it is important to have regard

to the discrimination laws. In Meade-Hill & Anor -v- British Council 1995 IRLR
478, a female employee was promoted and asked to sign a contract which included
a clause that obliged her to work anywhere in the United Kingdom that her
employer, at its discretion, might require. The Court held that such a clause in
a contract of employment was capable of constituting unlawful indirect sex
discrimination unless the employer could justify the requirement. The reasoning
behind the Courts decision was that, given that a higher proportion of women
than men are secondary earners in a household, fewer women than men could
comply with this requirement.
Place of work
In a contract of employment there is typically a clause identifying the location
in which the employee will be required to work or the actual site at which they
will be required to work. It is often of vital importance for employees to be mobile
and work in many locations throughout the UK or indeed to attend business
trips abroad. The contract should therefore provide for this eventuality and
provide adequate flexibility.
Even if there is no express mobility clause in an employees contract of employ-

ment, a certain degree of mobility may be implied where it is obvious or necessary
to give business efficacy to the contract. The extent of this implied mobility will
depend on, for example, the nature of the employees job, whether or not the
employee has in fact moved and what they were told on recruitment. Such a
term may also be implied by custom and practice in the industry or because of
the conduct of the parties.

In Courtaulds Northern Spinning Ltd -v- (1) Sibson (2) TGWU 1988 IRLR 305,
the Court of Appeal held that, in the absence of an express clause specifying
the place of work, an employee could be required to work at any place within
reasonable daily reach of their home. However, a mobility clause must be imple-
mented in a reasonable manner. This was demonstrated in United Bank -v- Akhtar
1989 IRLR 507, where the employee was told on a Friday he must move from
the Birmingham to the Leeds Branch on Monday. The employers refused his
request for a short postponement and offered no financial assistance. The
employee resigned and claimed constructive dismissal. It was held in this case
that the employer had acted in breach of contract, including breach of the implied
term of mutual trust and confidence.
Contracts of employment often include express mobility clauses which give the
employer flexibility and the right to change an employees job duties or their
place of work without acting in breach of contract.
Therefore, employers should consider the practical consequences before

invoking a mobility clause. They should be conscious as to whether it is reason-
able to expect the employee concerned to comply with the move. This would
involve considering, for example, whether the employee is disabled, whether
a family is involved, or whether there are any other specific facts that tie them
to the geographical area they are currently situated in.
An employer must also have regard to the implied term of mutual trust and confi-
dence and they must provide all employees concerned with reasonable notice
of a proposed move before it is implemented.
In Prestwick Service Ltd -v- McAndrew [1990] IRLR 191 the employers had two
factories situated 50 miles apart. All employees engaged after 1983 had a mobility
clause inserted into their contract of employment to allow the employers the
flexibility of moving employees between one plant and the other. Mr McAndrew
joined the Company prior to 1983 and therefore did not have a mobility clause
in his contract of employment. Mr McAndrew refused to move from one plant
to the other because it would mean working for a supervisor with whom he did
not get on. Mr McAndrew subsequently resigned and claimed constructive
dismissal. Whilst the Employment Tribunal accepted that the employers had a
contractual right to move Mr McAndrew, this was subject to an implied quali-
fication that the employee should be given reasonable notice of any proposed
transfer. Therefore Mr McAndrew was successful in his claim.

Another potentially important case is that of Bridgen -v- American Express Ltd
[2000] IRLR 94 where it was ruled by the High Court for the first time that mobility
clauses in contracts of employment are covered by the Unfair Contract Terms
Act 1977. The High Court stated that a move that is deemed as unreasonable
can be prevented by an injunction against the employer.
Deductions protection of wages

Part II of the Employment Rights Act 1996 contains provisions relating to the
protection of wages. In particular, all employees pursuant to section 13 of the
Employment Rights Act 1996 have the right not to suffer unauthorised deduc-
tions. An employer is not entitled to make a deduction from the wages of any
worker employed by him unless:
the deduction is required or authorised to be made by virtue of a

statutory provision or, more likely, a relevant provision of the workers
contract, or
the worker has previously signified in writing his agreement or consent

to the making of the deduction.
It is becoming increasingly common for employees to receive payments from

their companies in the form of loans. It may also be the case that employees
receive funding from their employer to undergo specialist training.
If an employer seeks to recover any company loans or training costs for example,
from an employees wages, either whilst they are still employed by the Company
or from the individuals final salary payment, then it is a strict requirement that
the Company have reserved that right in writing. This would typically involve
the employer drafting a short clause in the contract of employment to permit
such deductions. Alternatively an employer at the time of agreeing any training
costs or loans to the employee, can draft appropriate documentation which the
individuals should sign.
Where an employee has suffered a deduction in pay, instead of bringing an action

for breach of contract in the civil courts, he/she may be able to bring a claim
before a Tribunal that the employer has made an unlawful deduction from wages
under part II of the Act. A Tribunal will need to consider whether or not the
wages asked for should be payable to the worker and if the payment of less than
the sum that was properly due has been authorised. What is properly payable
to the employee will depend on the terms of the contract of employment and
how much they normally receive on a week by week or month by month basis.

In the case of MacRuary -v- Washington Irvine Limited EAT 857/93 the EAT held
that a Tribunal erred in ruling that Mr. MacRuary, who was faced with a unilat-
eral pay cut, was in a take it or leave it situation and, since he had not resigned,
he must be deemed to have accepted the breach. Mr. MacRuary claimed unpaid
wages and this was upheld by the EAT because he had expressly refused to accept
the pay cut and had stated that he was working under protest. As a result the
employers were seen to have made an unauthorised deduction from his wages.
In the recent case of International Packing Corporation (UK) Ltd -v- Balfour and
Others 2003 IRLR 11 Mr. Balfour and his fellow applicants were employed by
the Company on a working week of 39 hours. As a result of falling orders the
employer introduced short time working and reduced the employees earnings.
The employees claimed that the reduction in pay amounted to an unauthorised
deduction from wages under section 13 of the Act. In the first instance the Tribunal
Chairman found that there was no express term in the employees contracts which
permitted the employer to introduce short-time working unilaterally. However,
he went on to imply such a term by custom and practice. Notwithstanding that
finding, the chairman held that the deductions had not been authorised by written
provisions in the contract of employment or by any other means and therefore
there was an unlawful deduction in wages.
On appeal the employers submitted that there was no deduction from wages
because the employees were being properly paid for the hours that they had
actually worked. The employees cross-appealed against the finding of an implied
term entitling the employers to introduce short-time working.
The EAT held that a reduction in the Applicants pay, following the unilateral
introduction of short-time working by the employers, amounted to an unautho-
rised deduction from wages in terms of section 13 of the Act. Such a reduction
in working hours was plainly a variation of the contract of employment and the
EAT considered that, unless this was expressly catered for in a contract or allowed
by implication in the terms of the contract, any actual deduction of wages, even
if related to hours worked, is not authorised by the Act and can only be achieved
by agreement. There was no agreement in this case.
Finally it should be noted that an employer is not precluded from recovering

overpayments of wages from future salary, as this is specifically provided for
in part II of the Act.

Right to search
Although this will not be a practical consideration for all employers, the right
to search employees is required on an increasingly regular basis in certain sectors
such as manufacturing industries or computer technology where expensive pieces
of equipment are used by employees on a regular basis. Enforcing such policies
is often difficult and, in order to achieve the maximum co-operation of staff, strict
guidelines should be implemented. Consequently, it is advisable to have a policy
in place and to obtain the express agreement of the employee for compliance
with the requisite procedure by issuing notification of its existence and location
of areas where the policy operates as well as requiring the signature of employees
on a returnable form.
Employers intending to implement such a clause should be alive to the impli-

cations of the Human Rights Act 1998. Although this is not directly applicable
in the private sector, any claim brought by an employee to an Employment
Tribunal is subject to compliance with the Human Rights Act and the Tribunal,
which is a public body, must be aware of any human rights issues in determining
cases.
Therefore, it is imperative that all stop and search procedures are communi-
cated to employees explicitly and that they are made fully aware of the
frequency with which they will be stopped and searched. All searches must be
reasonable and avoid unnecessary physical contact . There should be training
for managers and those carrying out the searches. Employers should be aware
that no physical strength or force should be used otherwise allegations of an
assault could occur.
Employee benefits
Additional benefits alongside normal salary are now commonplace in most
businesses. Benefits such as company cars, private medical insurance and low
rate loans are enjoyed by many employees across the UK. If benefits such as a
bonus or private health insurance are genuinely discretionary or ex-gratia benefits,
then an employer is entitled to reduce or withdraw these benefits once they have
given the employee reasonable notice of this. Employers need to be cognisant
of the fact that just because they label a particular benefit discretionary or ex-
gratia this will not automatically mean that the benefit in question is, in fact, a
contractual entitlement. A Court or Tribunal will consider how regularly the
benefits have been paid and also the nature of the benefit to see whether or not
it has become contractual.

An employee is entitled to be compensated for the loss of any fringe benefits

or perks to which he/she was contractually entitled. Great care needs to be
taken, therefore, when drafting the contract of employment as to the status of
particular benefits. If a Company intend to detail an employees entitlement to
a Company car, life assurance, private medical cover or permanent health insur-
ance then the basis upon which these entitlements are offered to employees should
be made clear. In circumstances where such entitlements are provided by virtue
of an insurance policy then at all times it should be made clear to the individual
that any benefits or entitlements are subject to the terms of any insurance policy.
Therefore, where the employee does not qualify for any payment or benefit under
the terms of the policy, there should be no additional means for the employee
to seek compensation or benefits from the employer directly pursuant to the
terms of a contract of employment.
It is also important to consider the circumstances in which a Company may wish

to change or modify such benefits from time to time. Often Companies will find
that it is not economical to continue to provide certain benefits or they may wish
to change the nature of the benefit by contracting with another insurance
Company. This, in many cases, can be detrimental to employees and in order
to avoid breach of contract claims it is important to ensure that such entitle-
ments are not contractual in the first instance.
In this regard employee benefits which are provided by an employer should be

subject to additional policies or procedures which are clear and unambiguous
and which give the Company the right to replace, withdraw or amend the benefit
from time to time. A clear statement should be set out in any documentation to
employees that such benefits do not form part of an employees contractual entitle-
ment where this is the intention of the employer.
In circumstances where fringe benefits are regarded as part of an employees

remuneration, breaches of terms relating to such benefits may well amount to
repudiatory breaches of contract.
In the case of Allsopp -v- Carr Lane Engineering Services Ltd Employment Tribunal
case number 11750/83 the employers reduced the amount that they were prepared
to pay towards an employees telephone bill when the contract had initially made
it clear that the employer had promised to reimburse the employee in full. This
was held to be a fundamental and repudiatory breach of the employees contract
of employment.

In the case Beaven -v- Phillput (Stationers) Ltd Employment Tribunal case number
29382/85 the Company withdrew an employees company car despite previously
promising the individual that she could retain the car. The value of a car to the
employee personally can be considerable particularly where it is used for business
and private purposes. As such the removal of the company car amounted to a
breach of the employees contract of employment. This is a further reason to
have transparent company car policies which make it clear the terms upon which
the car is made available and the circumstances in which it can be used.
It has also been found that non payment of employers pension contributions
to an employees pension fund can amount to repudiatory breach of contract.
This is because, although it may be possible for a pension scheme itself to be
replaced or withdrawn from time to time, the actual payment of employers
pension contributions can in itself amount to a contractual entitlement. There-
fore, in circumstances where a Company is considering replacing or withdrawing
any benefit or entitlement, it is sensible to consider how much notice should be
given to the employee, what the Company intend to do in terms of replacing
the policy or benefit and if there is a requirement to compensate the employee
to avoid possible claims of breach of contract.
Working time
The Working Time Regulations 1998 (the Regulations) set out the health and
safety requirements for an employer in relation to working time and create limits
regarding hours of work, entitlements to rest breaks, pay and annual leave.
Working time is deemed to mean any period during which a worker is at his
employers disposal and carrying out his activities or duties. Recent Court
decisions have shown that they are willing to take a generous approach to this
definition and time spent on relevant training also counts as working time.
By virtue of the fact that the Regulations apply to a worker, which is a wider
category than employee, employers need to be aware that the provisions of
the Regulations apply under any contract where the individual personally
performs any work or services for another party to the contract where the other
party is not a customer or client of any business or professional service under-
taken by the individual.
Flexibility to adapt or exclude aspects of the Regulations can be achieved by

using one of the following three types of agreement. These agreements may be
incorporated into an employees terms and conditions of employment by using
a specific clause of reference in the contract of employment.

COLLECTIVE AGREEMENT
This is an Agreement between an independent trade union and an employer

which satisfies Section 178 of the Trade Union Labour Relations Consolidation
Act 1992.
WORKFORCE AGREEMENT
This is an alternative to a Collective Agreement. The Workforce Agreement is

an agreement between the employer and employee representatives and it may
apply to the whole workforce or a particular group. A Workforce Agreement
must be in writing and must be effective for a specified period, which does not
exceed 5 years, in accordance with Schedule 1 of the Regulations.
RELEVANT AGREEMENTS
This generic term covers collective agreements, workforce agreements and any
agreement in writing which is legally binding between the worker and the
employer. Such agreements enable an employer to extend the ambit of the Working
Time Regulations in certain circumstances. It is possible through such an agree-
ment for a worker to agree to work more than the 48 hour average weekly limit
through an individual opt out agreement. This must be in writing and must allow
the worker to bring the agreement to an end at any time. The agreement may
specify a notice period of up to 3 months before it is terminated. If no notice period
is specified, only 7 days notice will be required under the Regulations. When an
individual worker has agreed to work in excess of the average working week,
an employer must maintain up-to-date records of all workers who have made
this agreement. The use of individual opt outs is exclusive to the United Kingdom
and is due to be reviewed later this year by the European Commission. Further-
more it is not possible for a Union or employees representatives to enter into a
Workforce or Collective Agreement on behalf of employees to opt of the 48 hour
working week. Such an opt-out can only be given by the individual. It is impor-
tant to note that workers are protected against suffering a detriment or being
dismissed if they refuse to opt out of the Working Time Regulations.
The main provisions under the Regulations are:
Night Work Limits an employer is required to take reasonable steps

to ensure that the normal hours of their workers do not exceed an
average of 8 hours in every 24 hour period. Night time is a period of
at least 12 hours which includes the period from midnight to 5.00 a.m.
A precise period can be determined by relevant agreement and, in the
absence of such an agreement, it will be 11.00 a.m until 6.00 a.m. A night
time worker is defined by the Regulations as a worker whose daily
working time includes at least 3 hours of night time on the majority

of days they work. Night workers are entitled to free health assessments
before taking up night work and these should be carried out at regular
intervals. Records must be kept to show that the working hours of night
workers do not exceed the maximum limit. Records will also need to
be kept of health assessments undergone by a worker for up to 2 years.
Rest Periods workers are entitled to a daily rest period of 11

consecutive hours in each 24 hour period. The Regulations further state
that weekly uninterrupted rest periods of no less than 24 hours in each
7 day period must be given by the employer. An in-work rest period
of at least 20 minutes must further be provided by the employer where
shifts of 6 hours are being worked. Such rests do not have to be paid,
but they must be spent away from the workers work station.
Paid Annual Leave there is an entitlement for employees to receive

at least 4 weeks paid annual leave in every leave year. There used to
be a qualifying period of 13 weeks before entitlement for annual leave
arose, but this no longer applies and workers will be entitled to annual
leave from the first day in their new employment. The arrangements
for deciding when leave may be taken should be set out in the contract
of employment. The contract should further specify whether the worker
can be required to take all or any of the leave of his own accord, provided
that prior notice is given, or whether the employer is able to specify
periods during which leave can be taken. The contract should also specify
the amount of notice that needs to be given and who needs to be
informed of the leave requirements. Employers may further wish to
specify circumstances in which they may refuse the worker permission
to take such leave.
Sickness Absence a landmark ruling of the Employment Appeal

Tribunal has held that employees can take annual leave during a period
of sick leave. The EAT in Kigass Aero Components Ltd -v- Brown [2002]
IRLR 312 has held that under the Regulations, workers on long term
sick leave can claim holiday pay even where they have been absent
from work and have not put in any working time in that particular leave
year. In this particular case, Mr Brown had not worked throughout
the holiday year of 1999 due to long term sickness but was entitled to
take 3 weeks paid leave for holiday despite the fact that he had exhausted
his contractual and statutory entitlement to sick pay. The EAT held that
the only conditions necessary to claim annual leave under the
Regulations are that the person is a worker who has given the employer
proper notice to take the leave under Regulation 15.

All of these considerations should be borne in mind when drafting the terms of
a contract of employment. It is important for the employer to remember that, in
the event of any breach, the provisions of the Regulations will take precedence.
Enforcement of the Regulations

Employers can face criminal sanctions (fines and imprisonment) for failing to
comply with the limits on working hours or the health and safety aspects of the
Regulations. The Regulations are either enforced by the Health and Safety Execu-
tive or by local authority environmental health officers depending on the industry
sector of the employer. Workers can complain to the Employment Tribunal if
they have not been granted their entitlements under the Regulations.
Workers can also complain to the Tribunal that they have suffered a detriment
for asserting an entitlement under the Regulations. In successful cases, the Tribunal
has the power to award compensation.
Employees (but not workers) can bring unfair dismissal claims if the dismissal
results from their assertion of an entitlement under the Regulations.
Recent opinion suggests that the Regulations have had little impact on the long
hours culture in the UK. Recent surveys have shown that 40% of companies in
the UK state that their employees have agreed to work longer than the 48 hour
week limit set by the Regulations.

THOROGOOD
PROFESSIONAL
INSIGHTS
Chapter 5
Confidentiality and post
termination restrictions
Paula Rome, updated by Tracy Luke
Background .........................................................................................84
Competition whilst still employed .....................................................85
Post termination restrictions restrictive covenants ......................89
Enforcement.........................................................................................93
The effect of wrongful and constructive dismissal ..........................95

Chapter 5
Confidentiality and post
termination restrictions
Background
Many employers have certain information or contacts in their business which
they view as their property and would like to protect from competitors.
Employers need to think about protecting themselves against the activities of

their employees if they believe that it is likely that their employees may set up
in competition against them. During the term of employment the employee has
a duty of loyalty and good faith towards the employer. This duty is normally
referred to as the duty of fidelity. This duty will, however, come to an end when
employment terminates.
It is therefore relatively common for an employer to attempt to restrict the actions

of an ex-employee by including in the contract a promise by the employee that,
upon leaving employment, he/she will not set up in competition, solicit customers,
be employed by a rival or entice away former colleagues. This is particularly the
case with senior employees who could cause the business extensive damage
because of their experience, customer connections and access to confidential infor-
mation. These restrictive covenants are traditionally difficult to enforce as, if a
court considers them too wide, they will be seen as an unreasonable restraint
of trade.
The difficulty in enforcing such restrictive covenants (often referred to non-compete

or non-poaching clauses) led to the use of garden leave provisions. A garden
leave clause provides that, during the notice period, the employee can be required
to remain away from the workplace (i.e. he/she is sent to work in his garden) or
can be required to carry out duties different from his/her normal duties.
Keeping the employee away from work limits contact with confidential infor-
mation and also allows the employer to encourage other employees to re-establish
relationships with customers which the departing employee had fostered.

5 C O N F I D E N T I A L I T Y A N D P O S T T E R M I N AT I O N R E S T R I C T I O N S
Competition whilst still employed
Preparation to compete
There is a useful case examining those situations where employees have started
taking steps to set up their own business whilst still in employment; the question
being whether such actions amounted to a breach of the duty of fidelity. In
February 2002 the Court of Appeal looked at the situation in the case of Ward
Evans Financial Services Limited -v- Fox and another [IRLR 31 February 2002].
Mr Fox and Mr Phillips had been employed by Ward Evans Financial Advisers
and their contract of employment included a clause which provided that, during
the course of their employment, they would not hold an interest in any organ-
isation in competition with Ward Evans or disclose confidential business
information. In 1998 they set up a new company which remained dormant until
they had left Ward Evans employment. Upon the new company becoming active
they were approached by a former customer of Ward Evans, a personal contact
of Mr Fox who transferred his business to their new company.
The Court of Appeal held that by setting up the company whilst still in employ-
ment, even though the company was dormant, Mr Fox and Mr Phillips had
breached their duty of trust and confidence. Their ability to serve their employer
had been impaired and Mr Fox and Mr Phillips had failed to act in the best inter-
ests of Ward Evans whilst still employed. The result of this was that they would
have to recompense Ward Evans for the loss they had caused.
This guidance seems to imply that taking steps to set up a new business in compe-
tition with your existing employer whilst still employed may amount to a breach
of contract, a point giving some comfort to employers.
Garden Leave
Because of the difficulties encountered in relying on restraint-of-trade clauses
garden leave has now become a safer option. There are, however, dangers as
the courts will examine the length of notice periods subject to garden leave and
how these may interact with other restrictions. The courts have also shown
hostility to the leave as this may cause the employees skills to atrophy whilst at
home. The courts may see this as being against public interest in that it may
militate against maintaining a skilled workforce.

Garden leave can come into play whether the employer or employee gives notice
to terminate employment. If the employer decides to hold the employee to the
whole or part of their notice period but excludes the employee from the premises
the employee will remain employed during the garden leave period. To protect
the employer this must be written into the contract as the court will not imply
a right to send an employee on garden leave. The aim of garden leave is that:
The employers confidential information may be out of date by the time

the employee can join his new employer
The employer will have time to find an appropriate replacement who

can develop relationships with the departing employees contacts
The employee will not have access to the employers staff records and
computer systems
Common features of garden leave clauses

All garden leave clauses will be slightly different. There are, however, some
common features which include provisions that:
The employer has the right to place an employee on garden leave upon
the employer or employee giving notice of termination of employment.
(Some clauses are drafted to cover the situation where an employee
may attempt to leave the organisation without giving notice, by
expressing the clause as being applicable when the employee announces
an intention to resign. The clause then becomes effective).
The employee to carry out no duties or to carry out specific duties

outlined by the employer.
The employee may be excluded from the employers premises and will
not be allowed to contact employees or customers without the consent
of the employer.
The employee must receive full pay and benefits during the garden leave
period. Some benefits may be expressly excluded from this such as
discretionary bonuses. This can often become a negotiation point
Emphasise that both express and implied duties of trust and confidence
continue during the garden leave period so as to prevent the employee
working for or providing services to anyone else.

The importance of specifically including clauses to prevent the employees working

for others during the term of the contract was emphasised in the case of Symbian
-v- Christensen (24.5.2000). In this case the Court of Appeal ruled that an employee
on garden leave, even when this was allowed in the contract, was put in a situa-
tion where the employer had fundamentally and irretrievably undermined the
employer/employee relationship. The Court of Appeal took the view that what
remained was the bare contract and all that could be enforced against the
departing employee were the express terms of the contract. Employers would
not be able to rely upon implied terms of good faith and fidelity. It is therefore
essential that the contract contain a clause preventing employees from working
for others during the term of the contract if the employer is to be able to stop
the departing employee from working for a competitor during that period.
As can be seen the garden leave clause is only as useful as it is long and, if the
employee is on a short notice period, then the garden leave will also be a short
duration. This is not to say that the garden leave clause is without its uses
especially in those contracts where there are no post-termination restrictive
covenants or if the employer believes that there is a risk that such covenants
would be unenforceable.
Loss of skills
Even if a contract contains a garden leave clause which specifically provides
that an employee cannot work for a competing organisation or in direct compe-
tition themselves whilst on garden leave, the courts will examine to what extent
the employer may lawfully withdraw the employees duties if such withdrawal
impacts upon the employees skills. As will be seen in the case law outlined below
regarding restrictive covenants the courts are unsympathetic if an employee is
taken out of the working environment for a long period of time. This is especially
the case where the absence from the workplace may affect the future employ-
ment prospects of the employee. There have been cases where courts have been
willing to reduce the length of the garden leave period to allow the employee
back into the workplace when it is believed that the employer had been adequately
protected GFI Group Incorporated -v- Ecclestone (1994 IRLR 119).
The courts have shown a willingness to re-write clauses to protect the employer,
unlike restrictive covenants where courts have historically been more likely to
decide that the clause is simply invalid rather than re-write it.

Confidentiality covenants protection of the employers

confidential information
If it is decided to include a confidentiality covenant, then one of the main points
to be borne in mind is the type of information the employer wishes to protect.
This needs to be very closely defined and so must be specified and described
with as much detail as is possible. Some information will be clearly identifiable
as being confidential but there is a certain level of information which could be
described as border line. If the information falls within this category then,
although describing it as confidential in an express clause in a contract this will
not automatically make it confidential, it will enable the employer to attempt at
least to make a more persuasive argument to the court.
In contrast to restrictive covenants, which are discussed below, confidentiality

covenants tend to be unlimited in time. Most covenants apply to information until
it enters the public domain. Some employers try to limit this exclusion to provide
for the possibility that information was placed in the public domain because of
the actions of the employees, and should still be subject to protection.
It is also common for clauses to state that the confidentiality requirement will
be overriden where there is a legal requirement to release information. If an
employee is required to give evidence by a court or Employment Tribunal then
this will override the confidentiality covenants.
Confidentiality or knowledge
There has long been confusion in deciding what amounts to confidential infor-
mation deliberately used by an employee and that which is innocently
remembered. In the case of SBJ Stephenson -v- Mandy (2000 IRLR 233) it was
decided that what is of true importance is the nature of the information.
The court decided in this case that a customer list was indeed confidential infor-
mation which SBJ Stephenson was entitled to protect by a confidentiality clause
despite the fact that it had been innocently remembered by their ex-employee.
The confidentiality clause had sought to restrain the employee from disclosing
information about the Companys affairs following the termination of his employ-
ment. Mr Mandy argued that the clause was too wide as it failed to account for
information which remained in his head innocently such as the names of the
Companys clients.

Previous leading case law in this field (Faccenda Chickens Ltd -v- Fowler (1986
IRLR 69)) carefully restricted the scope of confidential information to trade secrets
or information akin to trade secrets. In Mr Mandys case the contract of employ-
ment contained a clause far wider protecting information in relation to the affairs
of the company or any group company or any client thereof of which he has become
or may have become possessed whilst in the service of the company.
The court accepted that the clause was valid and emphasised that they did not
see Faccenda as supporting the proposition that information innocently
remembered could not be capable of protection.
The court drew a useful conclusion regarding the status of information. They
decided that there were two types of knowledge:
Objective knowledge knowledge which belonged to the employer

and was the employers property and
Subjective knowledge knowledge which belonged to the employee

and which was the employees property
Information such as trade secrets and the names of customers would be objec-
tive knowledge whereas skill, dexterity and mental capabilities were subjective
and the employees property. The court emphasised that many trade secrets,
for example chemical formulae, would be carried in the minds of employees who
work with them and an employee could innocently remember both objective
and subjective knowledge. However, the subjective knowledge would still remain
the property of the employer and therefore protectable by confidentiality covenant.
Post termination restrictions

restrictive covenants
Key areas
When drafting covenants three key areas must be considered:
1 NATURE OF THE BUSINESS
When considering the nature of the business thought must be given to:
2 BUSINESS ACTIVITIES
Customers their number, how identifiable they are, how often they
will place orders or require services

Will customers use other providers and services or are you their sole
provider
The geographical area within which the employee will work
How the business is likely to develop in terms of customers and suppliers

in the areas where the employee will be employed
3 EMPLOYEES ROLE
It should be decided:
What will be the employees duties?
What are the employees skills and experience?
Will the employee have direct contact with customers or suppliers?
Will the employee be responsible for running a team and working

with key employees and personnel?
Will the employee work for group companies?
Will the employee be privy to trade secrets and confidential

information?
What length of notice will the employee have?
Will the employee change roles within the organisation during the
term of their employment?
Likely competitive activity
Having considered the nature of the business, business activities and the
employees role within the business the employer can select from the most useful
type of covenant as outlined below. The employer should be trying to assess
the realistic risk to the business that the employees leaving and competing could
cause, and limit this.
Geographical area clause

This clause attempts to prevent an ex-employee carrying out similar business
within a certain defined area. It is common that a radius taken from the premises
of the former employer is used. This area must relate to the real business area
of the employer.
Geographical limits can be used for global organisations but the wider the
geographical area the more tightly the rest of the covenant will need to be drafted.

If the geographical area is linked to certain premises then care must be taken
to update if the employer moves or relocates.
The geographical location is normally combined with a particular time scale.

Courts tend to prefer the shortest period possible which will allow the employer
to protect their business information and contacts. The courts will also look at
the length of the notice period and the seniority of the employee when deciding
if covenants are reasonable. Courts will also look at the turn around time of
customer instructions and restriction periods common throughout that business
sector.
Certain prohibited specific activities can be narrowly outlined. For example:
An employee can be prohibited from working for a named competitor

in a named capacity (for these purposes the capacity should be directly
related to the specific job that the employee is carrying out in the
business at the time that they resign) or in a specific area for a specific
time.
Non-solicitation/non-dealing covenants
In addition to the geographical area restraint and/or prohibited activity an
employee can be bound into a non-solicitation and/or non-dealing covenant.
This prevents the ex-employee from using their dealings and contacts with
customers, suppliers and clients of the employer to put them in an enhanced
position when setting up in competition.
Non-solicitation covenant
The Employer must consider the minimum time required to protect their connec-
tions with the customer. The courts will assess the time it will take a replacement
employee to re-establish a relationship with the ex-employees customers. The
courts will consider the type of business carried out and the degree of customer
loyalty which may depend upon the nature and frequency of customer contact.
An employer may seek to protect potential customers with whom they are actively
negotiating as well as existing clients and customers.

An example of such wording, used in the case of International Consultancy Services

outlined below, defined the restriction as one in which, for a period of 12 months
following the termination of his employment, the employee would not:
canvass, solicit, approach or deal or contract with any company, firm

or person who at any time during the 12 months immediately preceding
the date of termination is or was:
a) negotiating with the employee for the supply of services;
b) a client or customer of the employer; and/or
c) in the habit of dealing with the employer.
When the employee in this situation attempted to side line work from a prospec-
tive customer of this employer to his own business the matter was considered
by the courts. In this case of International Consultancy Services (UK) Ltd -v- Hart
(2000 IRLR 227) it was held that such a clause was not so uncertain as to be
unenforceable and the employer did have the right to protect himself from the
poaching of such prospective clients and customers.
The High Court allowed protection of prospective clients where there had been
discussions about the terms of the contract and a contract was a real possibility.
The benefit of a non-dealing covenant is that not only does it prevent the act of
solicitation of customers but also the dealing with customers regardless of how
the business was initiated. Once again the wording would have to be narrowly
tailored to fit the circumstances of the employee being subjected to the restric-
tions. It may well be that such a restriction would only be appropriate for certain
employees such as those engaged in research or creative work, or in the commer-
cial side of a business. It would most likely be inappropriate to apply these
covenants to support function roles.
Non-enticement covenants/no poaching covenants

former co-workers
As with all restrictive covenants, such clauses must be narrowly drawn. The courts
have shown in the past their unwillingness to limit individuals ability to work
where they choose. Such clauses should, therefore, only cover those employed
or engaged at the same time as the ex-employee and should be carefully limited
only to employees or independent contractors whom the employer needs to
protect. Generally this will not cover the entire workforce.

Case law has allowed the use of general descriptions such as senior employees
however it is likely that, should this point be re-examined, the courts may decide
that the description should be as specific as possible, perhaps naming certain
types and levels of employees.
The duration of the clause is a point for consideration. There is no case law
guidance and in practice, enticement of staff is likely to take place shortly before
the employment has ended or within a relatively short time thereafter.
Enforcement
Enforcing post-termination restrictions

The enforcement of restrictive covenants is traditionally difficult. In order to be
valid and enforceable such restrictions must:
protect a legitimate interest such as trade connections, suppliers and

customers, the employers work force, trade secrets or other confidential
information; and
go no further than is reasonably necessary to protect that legitimate

interest.
As can be seen, the courts will look at each case on its own merits and it is
dangerous to rely upon previous case law to establish general principles. There
are some general points which have been defined by the courts as persuasive.
These include situations in which an employer is trying to impose restrictive
covenants to protect trade secrets where the courts decide that there are none,
where an employer is trying to prevent employees soliciting customers if the
employees had no significant contact with the employers customers, or the
employer is trying to prevent employees contacting customers where the
employee has build up customer connections as a direct result of their personal
connections.
To go no further than is reasonably necessary

If an employer does have a legitimate interest to protect then a court may enforce
a restrictive covenant as long as it is not drafted too widely. As has been discussed,
clauses can be limited either by a point in time or some geographical limitation
as well as defining restricted activity. The factors interrelate and therefore, if some
of the factors are widely drawn others must be more limited. The courts attempt
to balance the impact of the restraint on the employee against the employers
need for protection.

When considering the reasonableness of the clause the courts will consider the
status of the employee. The more senior the employee, the more likely that a
restraint will be upheld. More junior employees should not be subjected to high
levels of restrictions as the courts will be keen to protect those employees in
weaker bargaining positions.
The covenant must be reasonable at the time the employer seeks to enforce it
and it is therefore vital for employers to ensure that restrictive covenants are
kept up to date. The employer must be in a position to explain why a restraint
is drawn in the way that it is and how particular harm could be caused by breach
of the restrictive covenant.
The powers of the court

Those employers who have drafted restrictive covenants in the past, or have
seen contracts with such clauses, will have noticed that the clauses are divided
into small separate commitments made by the employee. Clauses are drafted
this way so that there is the possibility that if one part of the clause is found to
be drafted too widely then the courts may be persuaded to delete only that section
and allow the remaining sub-clauses to be acted upon.
If the court is to be persuaded to make the amendment it must be able to delete

the covenant in restraint of trade in a way that does not alter what remains of
the contract or the meaning of what remains. The court therefore will examine
the remaining wording and consider whether the parties actually did intend the
words to be, not merely grammatically appropriate but, separate promises.
This principle that the courts can delete wording (some times referred to as the
blue pencil principle) permits deletion of words as long as the remainder has
grammatical meaning. It is common that such clauses actually include wording
to invite courts to make amendments should the existing form of the wording
be seen as unenforceable. It must be noted however that, whilst the court may
delete sections, it will not rewrite a covenant in order to make it effective and
employers should not rely upon their willingness to do so.

The effect of wrongful and constructive dismissal
Breach of contract by the employer

If the employer wrongfully dismisses the employee then the contract and the
protections contained will fall away. The employee will be entitled to treat
him/herself as free of the covenants. Wrongful dismissal may arise where the
employee is:
summarily dismissed where there are no grounds to justify the

instant dismissal; or
dismissed without notice where there is no contractual provision to allow

this to take place. It can be written into the contract of employment
that an employer may dismiss without notice but make payment in lieu
of notice instead (commonly known as a pilon clause). If there is instant
dismissal without a pilon clause then this will constitute a breach of
contract and a wrongful dismissal.
Constructive dismissal
If an employer takes an action which is seen as breaching the duty of trust and
confidence between him and his employee then this may put the employee in a
position where he/she can claim constructive dismissal. The actions of the employer
are seen as striking at the heart of the contract and putting the employee in a
situation where he/she is forced to resign.
If a court decides that an employee has been constructively dismissed then the
employee will be able to leave employment free of any restrictive covenants. It
is therefore not uncommon, in situations where an employee wants to leave to
work with a competitor (who may be dissuaded from employing him because
of restrictive covenants), to pursue the argument that they had been in fact,
constructively dismissed.
The employers rights

If the employee breaches a valid restrictive covenant the employer will have the
following remedies:
a claim for damages against the former employee for breach of contract;
potentially, a claim for damages against the new employer if they

knowingly encouraged the employee to breach the covenants; or
injunctive relief.

The most common step for the employer to take is to seek an order of the court
to prevent the employee from breaching the restrictions (the injunctive relief).
If the employee or the new employer then breached that court order this would
amount to contempt of court (a potentially imprisonable offence).
Such injunctions can be applied for immediately and damages will be consid-
ered at a later date when all the evidence will be heard in full. The injunction is
an attractive option because of:
its speed;
the fact that it will keep the commercial status quo protected until the
case is heard in full;
the practical difficulty of proving that breach of contract has caused

financial loss; and
the length of time that the damages claim may take to be concluded
in court.
It is common that the employer will try and protect his position with regard to
damages by pursuing a joint injunction and damages claim. The employer can
apply for the injunction pending the trial to protect from further damage in the
period between the hearing for the injunction and the full trial.
Before granting an injunction courts will look for the employer to show that:
there is evidence that the employee has breached contractual obliga-

tions; and
the balance of convenience is in favour of granting the injunction the

damage to the employer cannot simply be recompensed by damages.
The employer will have to undertake that, if at the full hearing it is found that
the injunction was wrongly granted, he will meet the damages caused by the
injunction to the employee or the employees new employer. This is commonly
referred to as a cross undertaking for damages.
Any agreed settlement may restrict the employee to a slightly lesser extent than
the original covenants but still protect the employer.

Practicalities
Given the cost and complexity of enforcing restrictions, many employers may
take the view that they are not the most useful clauses to include in a contract.
They do, however, have the practical impact of dissuading future employers of
key employees from encouraging them to join with the specific intent to poach
business or previous members of their team. This practical dissuasive impact
may well be worth the time and effort of putting together tightly worded restric-
tive covenants. Most incoming employers will not want to be faced with a
potentially costly injunction and the adverse publicity which could be involved
in pursuing the case through the courts.

THOROGOOD
PROFESSIONAL
INSIGHTS
Chapter 6
Changing the contract
Introduction..........................................................................................99
Consent between the parties..............................................................99
Union agreement .................................................................................99
Legal remedies ...................................................................................102
Deductions in wages claims .............................................................104
Unfair dismissal .................................................................................104
Remedies for unfair dismissal ..........................................................106
Discrimination claims........................................................................107
Imposing the change.........................................................................107
The pressing business need..............................................................108
Collective consultation ......................................................................110
With whom should you consult? .....................................................111
Employee representatives.................................................................111
Notice ..................................................................................................113
Summary ............................................................................................115
Chapter 6
Changing the contract
Introduction
There are four ways to change a contract of employment:
1 by consent;
2 under the terms of the contract (see flexibility clauses in Chapter 4);
3 by Union agreement; and
4 by imposition.
Consent between the parties

Variation by express agreement between the parties is obviously the most sensible
way of implementing a change to the contract of employment. Any variation
of contract must be supported by consideration. In employment contracts the
consideration for the employees promise to work is the employers promise to
pay wages (Lee & Others -v- GEC Plessey Telecommunications [1993] IRLR 383).
Union agreement
Because the parties to the contract of employment are the employer and the
employee and the Union is not, the fact that a change is agreed by the Union
has no effect on the contract itself in the majority of cases. Therefore, even if
the Trade Union has agreed and or balloted its members, unless the Union acts
as an agent for the employee or the contract of employment expressly or impliedly
incorporates agreements made between the employer and the Union, agree-
ment with the Union will have no effect on its terms (see chapter 3).

6 CHANGING THE CONTRACT
Union acting as agent

If the employee appoints the Union as his or her agent the Union is entitled to
act on the employees behalf. The Agency is not inferred from membership of
the Union alone but can arise from the factual circumstances.
In Harris -v- Richard Lawson Auto Logistics Limited, Court of Appeal 14 March
2002, the employer entered into a closed shop agreement with the Union at the
premises at which the applicant was employed. By that agreement a shop steward
was recognised as the official representative of the Union. During pay negoti-
ations the employer and the shop steward signed an agreement with regard to
holiday pay but the other employees were not required to sign the agreement.
When Mr. Harris took voluntary redundancy his holiday pay entitlement was
calculated in accordance with the agreement.
The Court of Appeal held that the shop steward had actual or at least osten-
sible authority to enter into an agreement on the members behalf, binding them
even where there was no evidence of consultation with the workforce, contrary
to existing custom and practice and the shop steward was not a proper signa-
tory to the agreement in accordance with existing Union procedures.
Incorporated agreement
Where it is a term of the contract of employment that agreements made between
the employer and the relevant trade union are binding on the individual
employees, then any such agreement will vary the individuals contract of employ-
ment whether or not the employee is a member of a trade union. By agreeing
to such a term in his or her contract the employee has agreed to be bound by
any such agreement.
Imposition
Where the employer is unable to achieve agreement with the employee, but still
wishes to make the change he has two options:
to undertake unilateral change; or
to terminate the contract of employment.

Unilateral change
Where the employer decides unilaterally to vary the contract of employment
this will be ineffective unless the employee consents to the change. Employees
therefore have a number of options:
to consent, either impliedly or expressly, to the change;
to object to the change but continue working; or
to resign and claim constructive dismissal.
Express or implied consent

Consent may be express or implied by the employees conduct, i.e. continuing
to work for a significant period aware of the change in contract terms without
comment or protest.
How long such implied consent will take depends on the nature of the term and
the effect its change has on the employee. Where the effect of the contract change
is immediate and regular, and the employee takes no steps, then he or she will
be deemed relatively quickly to have impliedly accepted it. If, however, the change
has no immediate impact, e.g., contractual redundancy payments, then the
employee, by continuing to work, may never be deemed to have accepted the
change. The old contract term will continue to apply to the employment.
Employee objecting to the change but continuing to work

This process is often initiated by employees providing employers with statements
that they have reserved their rights. This means that the employee is treating
the terms of the employment as being unchanged. If the employer then decides
to enforce the unilateral variation he will prima facie be in breach of contract
(Rigby -v- Ferodo Ltd 1987 IRLR 516).
Hogg and Dover claim

Where the unilateral change in the contract of employment is a significant one,
then the employee may be able to argue that the employer has terminated the
existing contract and re-issued a new one. (Hogg -v- Dover College 1990 ICR
39). Employees are therefore entitled to make claims of unfair dismissal which
can be defended by the employer in the usual fashion (Alcan Extrusions -v- Yates
1996 IRLR 327).

Resigning and claiming unfair dismissal

Employees may decide, where the breach of contract is sufficiently fundamental,
to resign and claim constructive unfair dismissal under the principle set out in
Western Excavating -v- Sharpe 1978 QB761.
In order to claim constructive dismissal an employee must demonstrate that:
there was a fundamental breach of contract;
they left employment because of that breach; and
they did not waive that breach.
It should be noted that the breach referred to need not be a single act but may,
under the principles in Lewis -v- Motorworld Garages Limited 1986 ICR 157, be
a series of actions which taken together with the employers other actions might,
cumulatively, amount to a breach of the implied term.
In summary, therefore, the three potential results of a unilateral variation of the

contract of employment are as follows:
Consent.
Constructive dismissal.
Breach of contract.
Legal remedies
Principally, the legal remedies an employee may pursue under these circum-
stances against his or her employers are divided into two specific groups, those
available for breach of contract claims and those available where a dismissal
has occurred.
Breach of contract claim

Where the employee has not consented to the unilateral variation undertaken
by the employer, or has objected to such change and continued to work reserving
his/her rights, and the employer goes ahead and imposes the term, there is a
prima facie breach of contract. The employee is entitled to make a claim, under
the contract, for damages. It is not necessary for the employees employment
to have ended for such a breach of contract claim to be brought. Damages are
now also awarded for psychiatric illness suffered by an employee as a result of
an employers breach of the implied term of trust and confidence (Gogay -v-
Hertfordshire County Council [2000] IRLR 703).

The measure of damages

Normally, when an employee is dismissed in breach of contract, any claim for
damages is limited to the length of the notice period, this being the period of
notice the employer would have had to have given had he/she wished to termi-
nate the contract lawfully. However, in Rigby -v- Ferodo (above), the Court of
Appeal indicated that this principle did not apply where the breach of contract
was continuing. Despite the fact that the employer could have terminated the
contract of employment lawfully by giving notice, the Court of Appeal held that
damages were not limited to the notice period (Gunten -v- Richmond Upon Thames
London Borough Council 1980 IRLR).
Where damages are insufficient to remedy the breach then, in certain circum-
stances, the court may grant injunctive relief. Injunctions are granted only where
the relationship of trust and confidence between employer and employee has
not been fundamentally destroyed by the actions of either party (The Public Trustee
as executor for Onofre Braganza (deceased) -v- Nuffield Nursing Homes Trust
t/a Fitzroy Nuffield Hospital CA 7th May 1993 unreported).
County Court or Employment Tribunal

Since 1984, Employment Tribunals have had jurisdiction to hear claims for breach
of contract where these are connected with employment. A claim must arise or
be outstanding at the date of termination of employment and must be brought
within 3 months of the effective date of termination of the contract or within a
further reasonable period (where it is not reasonably practicable for the employee
to present a claim in time).
The following claims are specifically excluded under the Employment Tribunals
Extension of Jurisdiction (England and Wales) Order 1994:
Terms relating to employers providing living accommodation for the

employee.
Terms imposing an obligation on the employer or the employee in

connection with living accommodation.
Terms relating to property.
Terms imposing an obligation of confidence.
Terms which are in restraint of trade.
Claims brought in the Employment Tribunal are limited to 25,000.

Deductions in wages claims

Where the imposed change affects the earnings of the employee, then a claim
under the Deduction from Wages section of the ERA (1996) may be used by the
employee to found a claim.
Under the ERA, no deduction from the workers wages can be made unless either:
it is required or permitted by a statutory/contractual provision or;
the employee has given his prior written consent to the deduction.
If the deductions are made pursuant to a contractual provision then the employee
must have been made aware of that provision prior to the event giving rise to
the deduction in wages.
If deductions are made in breach of the ERA then the sums wrongfully deducted
may be ordered to be repaid and the employer will lose the right to recover the
sums by any other means, e.g. by contractual claim in the County Court. Deduc-
tions claims may therefore provide employees with a useful tactical advantage
were contracts have been changed without their consent.
Unfair dismissal
Where the employee resigns and claims constructive dismissal or, alternatively,
the employer terminates the contract of employment, either by imposing radical
changes (Hogg & Dover) or where the employer expressly terminates the contract
and the employee does not accept the renewed offer containing the varied terms
(see later), the employee may make a claim for unfair dismissal.
The right to claim unfair dismissal

Certain employees will, depending on their age and length of employment,
acquire the right not to be unfairly dismissed and may challenge a dismissal
in the Employment Tribunal. Currently an employee requires one years conti-
nuity of employment for claims of unfair dismissal where no claim is made under
the automatic unfairness provisions.

A fair reason
Where the employee has the right to claim unfair dismissal, then the employer
must establish that the reason for the dismissal was one of the five potentially
fair ones, and then go on to show that he acted fairly and properly in treating
the reason as a sufficient reason to dismiss the employee.
The five fair reasons for dismissal are:
1 Conduct
Misconduct
2 Capability
Performance, ill health, qualifications
3 Redundancy
4 Statutory Bar
5 Some other substantial reason

business reorganisation
The reasonableness of the dismissal

Once an employer has established a fair reason for dismissal, the determina-
tion of whether dismissal was fair or unfair in accordance with Section 98 of
ERA will:
Depend on whether, in the circumstances (including the size and admin-

istrative resources of the employers undertakings), the employer acted
reasonably or unreasonably in treating it as a sufficient reason for
dismissing the employee, and that question shall be determined by equity
and the substantial merits of the case.

Remedies for unfair dismissal

There are three basic remedies; reinstatement, re-engagement and/or
compensation.
Compensation limit
The three principle awards of compensation in unfair dismissal cases are:
the basic award
compensatory award
additional award
Basic award
This is calculated by reference to the employees age, length of service (subject
to a maximum of 20 years) and basic pay (subject to a cap of 270.00 per week
since 1st February 2004).
However, where the effective date of termination falls between 1st February 2003
and 1st February 2004, the basic pay cap is 260.00 per week.
Compensatory award
Shall be such amount as the Tribunal considers just and equitable in all the circum-
stances, having regard to the loss sustained by the complainant in consequence
of the dismissal, insofar as the loss is attributable to the action taken by the employer
(Section 123 of the ERA 1996).
Where the effective date of termination falls on or after 1st February 2004 the
maximum compensatory award is 55,000.00. The House of Lords in Dunnachie
v Kingston upon Hull has confirmed that employees may not recover compen-
sation for injury to feelings caused by the way in which he/she was dismissed.
Additional award: non-compliance with an order

Where the Order for reinstatement or re-engagement is not complied with,
an additional award may be made. In unfair dismissal cases the additional
compensation will be an amount equivalent to between 26 and 52 weeks pay.
As with the basic award, the amount of a weeks pay is currently 270.00.

Order for reinstatement or re-engagement

Before a Tribunal will consider if compensation should be paid, the Tribunal is
obliged to consider whether or not the employee should be reinstated in the
position held prior to the dismissal, or re-engaged in a suitable alternative position.
The Tribunal will, however, not order reinstatement or re-engagement if the
employer can establish that it would not be practicable for the order to be complied
with. Where such an order is made and the employer fails to comply with it, an
additional award is payable in compensation.
Discrimination claims
In certain circumstances, employees may be able to make claims for unlawful
discrimination under the Sex Discrimination Act 1975, the Race Relations Act
1976, the Disability Discrimination Act 1995, The Employment Equality (Sexual
Orientation) Regulations and The Employment Equality (Religious or Belief) Regula-
tions 2003. Where such a claim is successful, there is no statutory maximum on
the compensation that may be awarded. Awards are not restricted to loss of
earnings but may also include payments in respect of injury to feeling.
Aggravated damages are also possible, where appropriate in serious cases, when
the respondent has behaved in a high-handed or oppressive manner.
Imposing the change
Checklist
Establish a sound business reason for the change required. Consider
the impact on employees and attempt to mitigate this.
Where the change will affect at least 20 employees within 90 days or

less, then begin elections for appropriate representatives.
Consult with appropriate representatives about the proposed changes.

This consultation must last at least 30 days when 20 or more individuals
are affected, and may last 90 days or more where the changes affect
more than 100 employees.
Through individual consultation, try to obtain the employees express

consent to the changes.

Where this is not possible, consider terminating the employees

contract of employment whilst maintaining the offer of re-employment
on the new terms and conditions.
Terminate employment on appropriate notice.
Where the employer is unable to achieve agreement with the employee then
he has two options:
to undertake unilateral change (see before)
to terminate the contract of employment
If the employer decides, to take the drastic step of terminating the contract of
employment on notice, or imposing such significant changes to the contract that
it can be deemed to have been terminated, then in order to defend the
inevitable resulting unfair dismissal claims, the employer will need to show that
he had a fair reason for undertaking that action. In almost all cases, the reason
which the employer will seek to identify is some other substantial reason of a
kind such as to justify the dismissal of the employee holding the position which
he held (SOSR). This category is a catch all section intended to cover situations
not dealt with by the other four potentially fair reasons. In the vast majority of
cases fair dismissals for SOSR are based on actions taken by the employer to
protect their business interests.
The pressing business need

When changing contracts of employment, employers will seek to establish that
they have satisfied the principles set out in RS Components Ltd -v- Irwin [1974]
1All ER41. In that case, the employers sought to impose restrictive covenants
on their sales staff. One employee however refused to accept the new terms.
The Tribunal established that the employer may fairly dismiss an employee where
this is required to protect the employers business interests.
In Hollister -v- National Farmers Union [1979] IRLR 238, the Court of Appeal
indicated that a dismissal under similar circumstances might amount to an SOSR
where there is a sound business reason for the reorganisation.
The employer must demonstrate that there are discernible advantages to the
changes proposed and simply advancing a statement that this is so will be insuf-
ficient. It is not necessary for the employer to demonstrate that, without the change
proposed, the business will collapse; merely that there is a significant and
discernible advantage to the change.

Fair and reasonable

Once the employer has established the reason for the dismissal, he must also
show that the decision to dismiss was reasonable in all the circumstances.
S.98 of ERA states that the determination of whether the dismissal was fair or
unfair will:
depend on whether, in the circumstances (including the size and the

administrative resources of the employers undertaking), the employer
acted reasonably or unreasonably in treating it as a sufficient reason
for dismissing the employee; and that question shall be determined by
equity and the substantive merits of the case.
Many of the terms contained in this section are vague and general. The words
equity and the substantive merits allow Tribunals to apply their knowledge of
good industrial relations practice and to ensure that there has been procedural
fairness. The question did the employer act reasonably in treating the real reason
for dismissal as a sufficient reason for dismissing the employee has been described
by the House of Lords as the critical question to be answered by employers.
Further assistance has been provided by the Employment Appeal Tribunal as

follows:
The Tribunal must consider the reasonableness of the employers

conduct, not simply whether or not the Tribunal considers the
dismissal to be fair.
In judging the reasonableness of the employers conduct the Tribunal

must not substitute its decision as to what was the right course to adopt
for that of the employer.
In many cases there is a variety of reasonable responses to the

employees conduct within which one employer might reasonably take
one view, another might reasonably take another.
The function of the Tribunal is to determine if, in the particular circum-

stances of each case, the decision to dismiss the employee fell within
the variety of reasonable responses which a reasonable employer might
have adopted.
When assessing the reasonableness of the employers decision to impose the

change in contract by termination, the Tribunal will take into account the action
of the employee in refusing to accept the proposed change. Although, as indicated
in Chubb Fire Security Ltd -v- Harper [1983] IRLR 311, it does not follow that,
just because an employee is acting reasonably in refusing to accept the change,
the employer is acting unreasonably in imposing it. The effect of the change on

the employee will be relevant. Where the proposed change directly affects the
financial circumstances of employees then it is likely to be more difficult for the
employer to justify the change. (Farr -v- Hoveringham Gravels Ltd [1972] IRLR
104). This is particularly the case where the change imposed in practice only
makes a profitable business more profitable rather than dealing with any under-
lying causes of inefficiency or profitability.
The proportion of employees accepting the proposed change, compared to those

rejecting it, will also be relevant. (St John of God Ltd -v- Brooks [1992] IRLR 546).
Where a majority of employees accept the offer there will be strong evidence
that the employers decision to impose the change was reasonable. It does not,
however, follow that, where a majority of employees reject the offer, the employers
decision to impose it is necessarily unreasonable.
Collective consultation
Since 1st March 1996, where an employer is proposing to dismiss 20 or more
persons at one establishment within a period of 90 days or less and for a reason
which is unrelated to their individual circumstances, consultation with employee
representatives must take place.
This principle was elucidated in the case of GMB -v- Mann Truck & Bus UK Limited
[2000] IRLR 636. The company was formed by the merger of two formerly
independent businesses and, following the merger, sought to harmonise terms
and conditions of employment by terminating the employees contracts and
offering fresh employment under new terms. All employees were given notice
under their current terms.
The GMB, which represented the workers, complained that the employers had
failed to comply with the consultation requirements under Section 188 of the
Trade Union Labour Relations (Consolidation) Act 1992 for the imposition of
new terms and conditions of employment.
The Employment Appeal Tribunal had agreed that, by issuing notice, the
employers were proposing to dismiss the employees as redundant within the
meaning of the Trade Union Labour Relations (Consolidation) Act. The concept
of dismissal as redundant had to be interpreted within the context of Article
1 of the EC Directive on collective redundancies which defines it as dismissal
for a reason not related to the individual concerned. It could not be held that
the obligation to consult does not apply to technical dismissals which the employer
does not intend to result in the loss of workers jobs provided new terms and
conditions are accepted.

With whom should you consult?

If an employer recognises an independent trade union for collective bargaining
purposes, he or she is obliged to consult it for these purposes, and may not,
instead, consult elected representatives. However, if there is no recognised Trade
Union, or the recognition does not cover the group of affected workers, the
employer may consult elected employee representatives. Therefore employers
may consult recognised trade unions for one group of employees and elected
employee representatives for others.
There is no requirement for permanent representation and employees can simply

be invited to elect representatives as and when required. However, it would be
difficult for employers to hold effective ad-hoc elections in the shadow of an
imminent commercially sensitive dismissal or reorganisation.
If there is already a staff committee/works council, an employer can only consult

with it about collective redundancies if their remit and method of election is in
accordance with the election requirements. A committee elected to organise social
events or deal with staff welfare will not satisfy the necessary criteria.
Employee representatives
The Election of Employee Representatives Regulations 1999 laid down require-
ments for electing representatives, namely that:
The employer shall make such arrangements as are reasonably

practicable to ensure that election is fair.
The employer shall ensure that there is a sufficient number of repre-

sentatives to represent the interests of all employees who may be
affected.
The employer shall determine whether or not representatives should

speak for all affected employees or if each should represent a particular
class of employees affected.
The employer shall determine the term of office of the representatives,

ensuring that it is sufficient to enable information to be given and
consultation completed.
The candidates for election must be affected employees on the dates

of election.
No affected employee will be unreasonably excluded from standing

for election.

All affected employees on the date of election are entitled to vote.
Employees may vote for as many candidates as there are representatives

to be elected or, if representatives are to be specific to particular classes
of employees, they may vote for as many candidates as there are
representatives to be elected for their particular class.
The elections should be conducted so as to ensure, as far as possible,

that voting is in secret and those votes are accurately counted.
HOW MANY REPRESENTATIVES ARE REQUIRED?
Employers should consider the following factors:
the total number of employees to be represented;
the variety of different groupings into which the employees might be

divided, for example by location, occupation or type of work; and
the nature of work activities undertaken.
WHEN SHOULD CONSULTATION BEGIN?
Consultation must begin in good time and at least:
90 days before the first dismissal takes effect where the employer is
proposing to dismiss 100 or more employees; and
30 days before the dismissals take effect where the employer is

proposing to dismiss 20 or more employees in all other cases.
INFORMATION REQUIREMENTS
Consultation must be undertaken with a view to reaching agreement on ways

of avoiding the dismissals or reducing the numbers affected and mitigating the
consequences. The information which trade union representatives or employee
representatives are required to be given is:
the reasons for the proposals;
the number and descriptions of employees it is proposed to dismiss;
the total number of employees at the establishment in question;
the proposed method of selection;
the proposed method of carrying out the dismissals, taking into account
any agreed procedures including the period over which the dismissals
are to take effect; and
the proposed method of calculating any payments proposed.

If discussions are unsuccessful and express consent is not obtained, the employer
must then consider the option of terminating the contract of employment on notice
whilst maintaining the offer of re-employment under new terms and conditions.
Individual consultation
Both for practical reasons and to satisfy the test of reasonableness, the employer
will wish to consult employees individually as soon as possible, and in as great
detail as possible, to try to obtain consent to the proposed change.
Notice
The employer should wait until both collective and individual consultation are
complete before issuing notice to terminate and re-issuing new contracts.
Statutory notice period

The length of notice which the employer is entitled to give to terminate the
Contract of Employment is subject to statutory minima which apply to all
employees employed for one month or more. Basically the employer is required
to give one weeks notice, for the first two years and thereafter one extra week
for each year worked up to a maximum of 12 weeks. The individual contract
may provide for longer notice periods.
Employees therefore have a right to work a specific minimum period of notice

as defined by the contract of employment or the statutory provisions. Where
the employee is not allowed to work their period of notice by the employer, the
employer is in breach of contract and a claim against him or her can be made.
For a claim of breach of contract the remedy is a payment of damages to compen-
sate the individual whose contract has been breached. The amount of the
compensation is limited to the amount necessary to put him into the position
he would have been in had the breach not occurred. Where the breach of contract
is a refusal to allow an individual to work, then normally a payment in lieu of
notice will be made.

Taxation
Damages for breach of contract are, in principle, not taxable. In Delaney -v- Staples
[1992] ICR483 the court held that a payment in lieu is made to compensate for
the employers breach of contract in not giving notice and, accordingly, is not
taxable as an emolument arising from employment.
If, however, the contract of employment contains a clause enabling the employer
to make a payment in lieu of notice, then clearly, if he does so, there will no breach
of contract. Under such circumstances the payment will not be compensation
but instead will amount to an emolument arising from employment, i.e. will be
subject to PAYE and NI contributions.
It should be noted that even if payments in lieu are not taxable, they may be
subject to tax under the special rules which apply to compensation payments
for loss of office. Where these exceed 30,000, the excess is taxable.
Gross or Nett
As noted above, where no pay in lieu clause is contained in the contract of employ-
ment, the pay in lieu figure will not be taxable. Nevertheless, the employees right
to compensation is limited to a payment which will put him in the position he
would have been in had his contract been properly performed, i.e. it entitles
him to the payment he would have received had he been able to work out his
notice period. Had the payments been made to him as a result of work, then
these would have been subject to tax and NI contributions and the employer
is, therefore, within his rights to make the payment in lieu nett or gross
There is a danger, however, where an employer regularly makes payments in

lieu gross, that the court will imply into the contract of employment (by conduct)
a term that payment will always be made gross (Gothard -v- Miller Group Newspa-
pers] 1998) ICR 729.
Mitigation
The dismissed employee has an obligation to take reasonable steps to mitigate
his loss i.e. he must take reasonable steps to find another job, but he is not required
to accept a drop in status. A reduction in salary may, however, be necessary
and any earnings made during the period during which notice should have been
given will be set off against any compensatory payment for the employers failure
to give it unless the principles of Abraham-v- The Performing Rights Society [1995]
IRLR 486 apply. In that case the employee had a five year contract of employ-

ment which contained a termination clause allowing the employer to end the
contract provided he made a payment in lieu of 2 years notice.
The Court of Appeal held that the employer was entitled to make a payment in
lieu under the contract of employment and that, therefore, there was no breach.
Payments made were not damages for breach of contract but were instead
contractual debts and the employee was not subject to the requirement to mitigate
his loss.
Abraham has now been reconsidered by the Court of Appeal in Cerberus Software
Ltd -v- Rowley (2001). Mr Rowley had been sacked summarily and unfairly, and
claimed six months wages in lieu of the notice to which he claimed he was entitled
under his contract. His contract contained a clause that the employer may pay
wages in lieu of notice. However, just one month after leaving Cerberus, Mr
Rowley found better paid employment elsewhere. With mitigation, Mr Rowleys
actual loss was very small. The Court of Appeal considered under what circum-
stances mitigation of loss should apply.
Where the contract contains a right to wages in lieu of notice, and the employer
fails to pay, then the employee can sue for the debt and avoid mitigation. However
if, as in Mr Rowleys case, the employer reserves the choice as to whether or
not to make a payment in lieu of notice and then decides not to, the employee
can only sue for damages for breach of contract and the duty to mitigate is applied.
Following the case of Richardson (Inspector of Taxes) -v- Delaney (2001) IRLR
663, where a payment in lieu clause is not relied upon, and a termination payment
is agreed prior to termination of employment, there may be no breach of contract
and therefore the payment will not be treated as damages for the breach, and
will be taxable in full.
Summary
If a payment in lieu clause is contained in the contract of employment and is
relied upon, then there will be an obligation to tax the payment. Where a contract
contains a requirement for an employer to make a payment in lieu of notice, failure
to pay allows the employee to sue as a debt and there is no duty to mitigate. If,
however, the employer only stipulates that he may make a payment in lieu of
notice, and then fails to pay, he has breached the contract and the employee
can sue for damages for wrongful dismissal. These damages are subject to the
duty to mitigate.

THOROGOOD
PROFESSIONAL
INSIGHTS
Chapter 7
Industrial action
Tom Player
Introduction........................................................................................117
What is industrial action?.................................................................117
Definition of a trade dispute...........................................................118
The rules on ballots and notification ...............................................119
Information to be contained in notices ...........................................119
Sample voting paper .........................................................................120
Type of ballot ......................................................................................121
Industrial action notices....................................................................122
Commencement of industrial action ...............................................123
Planning for industrial action...........................................................123
Temporary labour ..............................................................................124

claim unfair dismissal......................................................................124
The strike ............................................................................................126
Picketing .............................................................................................127
Chapter 7
Industrial action
Introduction
The most significant and important legislation governing a Trade Unions right
to call upon their members to take part in industrial action through the organ-
isation of an industrial action ballot, is contained in the consolidating legislation
The Trade Union and Labour Relations (Consolidation) Act 1992 (the Act).
Amendments to the Act have been introduced by the present Government
following election victory. These changes were implemented in the amending
legislation, The Employment Relations Act 1999 and came into force in stages
between April and September 2000. The principal objective of the changes is
to provide better protection for employees who participate in industrial action
following a properly conducted industrial action ballot. There are also revised
codes of practice on Balloting and a Code of Practice on Picketing which, whilst
they are in themselves not legally enforceable, can be referred to in Court and
Tribunal Proceedings if either the employees, the Trade Union, or the employer
act in breach of the Codes.
There are many circumstances in which a Company, out of necessity and for
sound business reasons, has to consider changes in terms and conditions of
employment. It is precisely these type of circumstances where employees and
their Unions will consider recourse to industrial action if consultation and dialogue
with the Company breaks down.
What is industrial action?

Industrial Action constitutes a breach by employees of their contracts of employ-
ment. This can range from a strike to a work to rule. A strike is simply a stoppage
of work which normally has the aim of trying to improve terms and conditions,
making a grievance known or protesting about something. The broad propo-
sition is that such a breach of contract can, in certain circumstances, enable the
employer to dismiss without notice. It follows that anyone organising indus-
trial action, or encouraging employees to take part in industrial action, is inducing

7 INDUSTRIAL ACTION
that breach. Inducing a breach of contract is a civil wrong, or tort and is action-
able. Only if industrial action is taken in contemplation or furtherance of such
a dispute by reference to the Act can the union avoid liability. However, any
defence would need to be able to demonstrate that a union has followed the
correct balloting and notification requirements. It is possible in certain circum-
stances for an employer to prevent employees from pursuing the action by an
injunction. Furthermore, industrial action, even if properly balloted, gives the
employer a right to withhold pay.
Definition of a trade dispute

As part of any defence to any claim in tort, the union will need to be able to demon-
strate that industrial action arises from a dispute between the workers and their
employer relating wholly or mainly to one of more of the following matters:
Terms and conditions of employment, or the physical conditions in

which workers work.
The engagement or non-engagement, or the termination or suspension

of employment or of the duties of one or more workers.
The allocation of work or duties between workers.
Matters of discipline.
A workers membership or non-membership of a trade union.
Facilities for officials of trade unions.
Machinery for negotiation or consultation and other procedures relating

to any items in this list including recognition of the right of a union
to represent workers in such a negotiation, consultation or in carrying
out such procedures.
The definition of a trade dispute for these purposes is therefore very broad and
clearly, if a Company is proposing to introduce changes to terms and condi-
tions of employment or working practices, this is likely to be sufficient to amount
to a trade dispute.
Where there is secondary action (i.e. sympathetic action by employees working

for employers who are not in dispute) the statutory defence will not apply.
It is therefore of great importance for a Company faced with industrial action

to identify early the nature of the trade dispute to establish whether or not action
is being taken in contemplation or furtherance of a trade dispute.

7 INDUSTRIAL ACTION
The rules on ballots and notification

In certain circumstances, breaches of the balloting rules may render industrial
action unlawful. In such cases the employer may sue the union for damages and/or
can apply for a court injunction. However, the detailed rules about balloting were
changed by the Employment Relations Act 1999 which was introduced in
September 2000. The clear legislative purpose of the amended provisions on
the information to be given by trade unions, and the requisite notices on ballots
and subsequent industrial action, is to enable an employer to know which part
or parts of his workforce are being invited to take industrial action. The objec-
tive being, from an employers perspective, to enable the employer to make plans
to avoid or minimise disruption and to continue to communicate with the relevant
part or parts of the workforce.
In circumstances where errors in the balloting rules are accidental, and of a scale
which is unlikely to affect the result of the ballot, an employer is unlikely to achieve
injunctive relief. For example, simple errors in counting the votes and identi-
fying the precise number of people who are entitled to take part in the vote which
has no direct impact on the actual industrial action ballot result will not be the
subject of successful injunctive proceedings by a company.
Information to be contained in notices

A union is required, at least 7 days before the opening day of the ballot, to give
written notice to the employer of the following:
firstly the notice should inform the employer that the union intends
to hold a ballot;
secondly, specifying the date upon which the ballot will start; and
thirdly, and more controversially, such information in the unions

possession as would help the employer to make plans and bring
information to the attention of those employees which, it is reasonable
for the union to believe, will be entitled to vote in the ballot (those who
are entitled to vote will be union members who are likely to be called
upon to take part in industrial action)
The union must provide such information as to the numbers, categories and
workplaces of affected employees as is possessed by the union even if it may
not be wholly accurate.

7 INDUSTRIAL ACTION
In the case of National Union of Rail, Maritime and Transport Workers -v- Midland
Mainline Ltd, (a decision of the Court of Appeal in July 2001), the Court of Appeal
refused to overturn an interim injunction preventing the RMT from inducing
strike action on the basis that the RMT was not likely to be able to establish
immunity from civil action because they had not complied with the necessary
statutory conditions. In particular, a significant number of those members entitled
to vote in the strike ballot had not been sent ballot papers. Furthermore, in the
case of London Underground Ltd and Others -v- National Union of Rail, Maritime
and Transport Workers (a decision of the Court of Appeal in March 2001), the
union also gave insufficient information to the employer in advance of indus-
trial action. The RMT union had no check-off arrangement with the employer
(the system for the deduction of union dues from salary) and, therefore, the
employer did not have any way of identifying its membership. The Court of
Appeal held that merely to inform the employer that the union would be calling
out 5,000 employees, all grades and at all workplaces was insufficient and the
Court upheld the injunction granted by the Judge at first instance.
Unions should consider carefully their statutory obligations when completing

a ballot notice. Equally, an employer in receipt of a ballot notice should estab-
lish if there is any difficulty in identifying those individuals who might be called
upon to take part in industrial action. This is particularly the case in multi-site
ballots or multi-union ballots.
Sample voting paper

Not less than 3 days before the ballot, a sample voting paper must be sent to
the employer. The voting paper must identify the name of the Scrutineer, if one
is required, which would only be the case if there were more than 50 voters in
the ballot. Furthermore, there is a requirement to specify the address and date
to which and by which it is to be returned. Ballot papers should contain one or
both of these questions:
is the voter prepared to take part in a strike?
is the voter prepared to take part in industrial action short of a strike?

7 INDUSTRIAL ACTION
The ballot paper now has to contain a specific statement, added by the Employ-
ment Relations Act 1999, for exact wording to be inserted into a specimen ballot
paper that unions have created as follows:
if you take part in a strike or other industrial action, you may be in breach
of your contract of employment. However, if you are dismissed for taking
part in strike or other industrial action which is called officially and is
otherwise lawful, the dismissal will be unfair if it takes place fewer than
8 weeks after you have started taking part in the industrial action, and,
depending on the circumstances, it may be unfair if it takes place later.
Type of ballot
The majority of industrial action ballots are conducted by post. A trade union
will typically allow between 7 and 14 days for a ballot to be completed. This process
involves the ballot papers being returned and counted by a Scrutineer. The revised
Code of Practice governing Industrial Action Ballots and Notice To Employers
(2000) stipulates that where second class post is used, 14 days should be allowed
and, in circumstances where first class post is used, 7 days is sufficient time for
the ballot to be completed.
As soon as reasonably practical, after the date of the ballot, the union is required
to notify the employer and voters of the result. This would usually be done by
way of a collective notice and the information given must stipulate:
the number of votes cast;
the number of individuals answering yes to each question;
the number of individuals answering no to each question; and
the number of spoiled voting papers.
A union will have a mandate for industrial action if there is a simple majority
voting in favour of industrial action. There is no requirement to state a
minimum number or percentage of employees in the unions bargaining unit to
support industrial action.

7 INDUSTRIAL ACTION
Industrial action notices

The union is required to give not less than seven days written notice to the
employer of the commencement of industrial action. This seven day period cannot
begin to run until the date upon which the employer has been notified of the
result of the ballot. The notice must:
Contain such information in the unions possession as would help the

employer to make plans and bring information to the attention of those
employees who the union intends to induce to take part.
If the union knows, the details, number, category or workplace of the

employees who it intends to induce to take part, this information should
be contained in the notice.
State whether or not the industrial action is intended to be continuous

or discontinuous.
Make clear that the majority of industrial action, including strike action,
is usually discontinuous in that it does not involve a continual strike
on the part of the labour force.
Make clear that, if industrial action is intended to be continuous, the

intended date for action to begin should be set out.
If discontinuous, the intended dates for industrial action will be set out.
Importantly, the notice should not overlook the fact that it should state that it
is given for the purposes of section 234A of the Trade Union and Labour Relations
(Consolidation) Act 1992. The Act as amended in 1993 previously required a
union to give to the employer, in obligatory notices about the strike ballot and
about the industrial action, information .... describing (so that he can readily
ascertain them) the employees who will be called upon to strike.
This requirement that the union hand over its membership list, at the risk of
individual harassment or victimisation, was amended by Schedule 3 of the
Employment Relations Act 1999 to exclude the requirement for names.
It is entirely possible that, by the time the union is in a position to issue an indus-
trial action notice, it will be able to provide more information relating to the
number, category or workplace of the employees concerned who will be called
upon to take part in industrial action. The information provided should enable
an employer to make appropriate plans to prepare for any industrial action. The
revised 2000 Code of Practice indicates the types of information an employer
might need and would relate to an employers ability to warn customers and
take steps to protect health and safety in the event of industrial action affecting
normal working.

7 INDUSTRIAL ACTION
Commencement of industrial action

Any industrial action reliant upon an industrial action notice must begin within
4 weeks of the last voting date of the ballot (unless the union and employer have
agreed to extend this by up to a further 4 weeks) or if a Court Order extending
the effectiveness of the ballot has been obtained. If industrial action has started
but is suspended, it can be recommenced outside the 4 week period providing
a revised industrial action notice is submitted. It is often the case that industrial
action is suspended by trade unions in order for the parties to consider further
negotiations and for the use of conciliation or mediation.
Planning for industrial action

The most important practical step an employer can take is to ensure that every
effort is made to communicate in the clearest way with employees in order to
explain the Companys position in respect of any industrial action, to ensure that
employees are given clear and credible information both in terms of the impact
of industrial action on the business and also on them. There is nothing
precluding an employer, faced with industrial action, from communicating directly
with the workforce. In circumstances where a Company is attempting to manage
contractual change, the background and nature to the Companys proposals
should be outlined. It is advisable for employers to use normal channels of commu-
nication, which might include the issuing of memoranda and employee notices
supported by briefing meetings, to enable employees to have all the informa-
tion at their disposal prior to making any decision as to whether or not they
wish to participate in such industrial action.
The key consideration for any employer faced with industrial action is the impor-
tance of ensuring that such industrial action causes as little disruption as possible
to the business and customers. The Company should therefore consider any
contingency plans that need to be drawn up in light of this obvious concern.

7 INDUSTRIAL ACTION
Temporary labour
It is important for employers to consider the impact of the Conduct of Employ-
ment Agencies and Employment Business Regulations 1976. Regulation 9 (11)
provides that:
a contractor shall not supply workers to a hirer as a direct replacement

of employees who are in industrial dispute with that hirer to perform
the same duties as those normally performed by those employees.
The Department of Trade and Industry is currently in the process of amending

these Regulations with the object of making them simpler, clearer and more
relevant to the labour movement of today. It is proposed that new regulations
will be introduced in the first half of 2003. Under the new draft regulations the
restriction on providing work to a work-seeker where an industrial dispute is
involved is dealt with under Regulation 7 (1) and 7 (2). These provide as follows:
An employment business shall not introduce or supply a work-seeker to a hirer

to perform:
the duties normally performed by a worker who is taking part in a strike

or other industrial action (the first worker); or
the duties normally performed by any other worker employed by the

hirer who is assigned by the hirer to perform the duties normally
performed by the first worker;
unless, in either case, the employment business does not know, and
has no reasonable grounds for knowing that the first worker is taking
part in a strike or other industrial action.
Importantly, these new draft regulations do not apply to unofficial industrial

action.

claim unfair dismissal
If the industrial action is unofficial and the employee is dismissed whilst taking
part in the strike action, then the individual may lose his right to pursue a claim
for unfair dismissal. An employer would firstly need to establish whether or not
he has the right to pursue a union in proceedings in tort in the event of unoffi-
cial industrial action and whether the union does or does not have a statutory
defence. In accordance with Section 21 of the Act a union has the obligation to

7 INDUSTRIAL ACTION
repudiate unofficial action taken by their members. This process would involve
the union issuing a notice to members stating:
you union has repudiated the call(or calls) for industrial action to which
this notice relates and will give no support to unofficial industrial action
taken in response to it(or them). If you are dismissed whilst taking unofficial
industrial action, you will have no right to complain of unfair dismissal
The act of repudiating unofficial action would have to be taken by the Executive
President or the General Secretary of the union involved. Once an act has been
officially repudiated by a union it is not possible to pursue a union for damages
in tort. It may however be possible to take direct action against the employees
involved and dismiss them without risking liability for unfair dismissal. It is impor-
tant in such circumstances for an employer to comply with the provisions of section
237 of the Act which gives employees the opportunity, before losing the statu-
tory protection to claim unfair dismissal, to cease to take part in unofficial industrial
action. In short, employees will not lose their statutory right to claim unfair dismissal
if they are dismissed before the end of the next working day after the repudia-
tion notice has been served by the union. Employees who continue to take part
in unofficial industrial action beyond the next working day after the repudiation
notice has been served by a union are at risk of being dismissed and losing their
right to pursue a claim for unfair dismissal, providing the reason for the dismissal
is that they are taking part in such unofficial industrial action. An employer, in
these circumstances, can selectively dismiss the instigators of the industrial action
or, indeed, all employees who are participating in such action.
However, great care needs to be taken before disciplinary action or dismissal

is contemplated against employees taking part in official industrial action. In
such cases a dismissal will be automatically unfair if the reason, or principal reason,
is that the employee took part in official industrial action and if one of the following
three conditions are satisfied:
the dismissal took place within 8 weeks of the day on which the
employee started the protected industrial action;
the dismissal took place after the end of that 8 week period but the
employee had stopped protected industrial action before the end of
that period, thus protecting the participants against victimisation from
the employer after they have returned to work; or
the dismissal took place after the end of the 8 week period and the
employee had not stopped taking part in industrial action before the
end of that period, but the employer had failed to take reasonable
procedural steps to resolve the dispute.

7 INDUSTRIAL ACTION
The typical steps that a Company would be expected to take in seeking to resolve
the dispute would be compliance with any procedural agreements that may be
in place for conciliation or mediation via ACAS. It may also be necessary to
consider further negotiations with the union prior to taking any decision to dismiss
employees after the expiry of the 8 week period.
If the dismissal is not automatically unfair the Tribunal will not consider the fairness
or unfairness of the dismissal at all provided that a Company can show that:
all employees participating in the action have been dismissed; and
if any employees are offered re-engagement within three months of

the date of dismissal and the offer is made to all relevant employees.
In circumstances where some employees have been dismissed or some have

been re-engaged, the Tribunal must go on to consider whether the individual
employees dismissal was fair or unfair. In summary this means that if the
employer has dismissed employees taking part in the industrial action, when
industrial action has been taking place for more than 8 weeks, and has taken
proper steps to try and resolve the dispute then, unless all employees in the
same situation have been dismissed without any being re-engaged, the
Tribunal must look at each and every case to determine whether all have been
fairly or unfairly dismissed.
The strike
Under Section 241 of the Act it is a criminal offence to intimidate another person
whether by violence or otherwise. An offence will be committed where a person,
with a view to compelling another to abstain from carrying out a legal act in
complying with their contract of employment does any of the following:
uses violence towards or intimidates that person or his wife or children,

or injures his property;
persistently follows that person about from place to place;
hides any tools, clothes or other property owned or used by that person,
or deprives him of or hinders him in the use thereof;
watches or protects the house or place where the person resides, works,
carries out business, or happens to be, or the approach to any such
house or place; or
follows that person with two or more other persons in a disorderedly

manner in or through any street or road.

7 INDUSTRIAL ACTION
Picketing
Section 220 of the Act provides limited scope for picketing without loss of legal
immunity. When a person attends a picket line at or near their own place of
work, if the act is in contemplation or furtherance of a trade dispute and if the
purpose is for peacefully obtaining or communicating information or peace-
fully persuading any person not to work, then this is lawful. There is a 1992 Code
of Practice governing picketing. The Code states that pickets and their organ-
isers should ensure that, in general, the number of picketers do not exceed six
at any entrance to or any exit from a work place, frequently a smaller number
would be appropriate. Once again the Code of Practice is not legally enforce-
able in itself and, whilst the Tribunal or Court will have regard to it, it is often
the case that picket lines will be manned by considerably more than six people.
The acceptable methods of picketing are limited to speaking with people leaving
and entering the premises in an effort to persuade them to support a case. A
Company faced with industrial action should familiarise itself with the Code of
Practice on picketing and be prepared to notify the police authorities in advance,
in the event that they believe that a dispute has the potential to result in public
unrest. A Company should also consider maintaining contact with the unions
head or main office, in circumstances where industrial action and strike action
occurs, in order to ensure that, as far as possible, the Code of Practice governing
picketing is complied with.

THOROGOOD
PROFESSIONAL
INSIGHTS
Summary
Summary
When reviewing and changing the contract of employment the following steps
should be considered:
What are the existing terms and conditions?
Are terms and conditions located in documents other than the written
contract, e.g. in a handbook or collective agreements?
Do the existing terms and conditions contain sufficient flexibility to

allow the actions/changes required?
Is there a recognised trade union which has the authority to negotiate

on the employees behalf?
Are there existing trade union collective agreements which require the
employer to collectively bargain on changes to terms and conditions?
What is the business justification for the change?
What collective consultation mechanisms are in place?
Will employee representatives need to be elected?
How will individual consultation be affected?
Are employees likely to accept the changes?
Will sweeteners and inducements be offered?
Is the employer prepared to risk unilateral variation (imposing the

change) and will this be effective?
If new contracts are required, will termination and re-issue be employed?
In the majority of cases, by far the best way of changing terms and conditions
is to avoid conflict and obtain employee agreement to the changes. It may also
be preferable to red circle existing employees and offer the new terms and condi-
tions to new employees. Through turnover over a period of time a broad contract
change exercise will have been effective.

Other specially commissioned reports
BUSINESS AND COMMERCIAL LAW
The commercial exploitation of intellectual The Competition Act 1998: practical

property rights by licensing advice and guidance
CHARLES DESFORGES 125.00 SUSAN SINGLETON 149.00
1 85418 285 4 2001 1 85418 205 6 2001
Expert advice and techniques for the identification Failure to operate within UK and EU competition rules
and successful exploitation of key opportunities. can lead to heavy fines of up to 10 per cent of a businesss
total UK turnover.
This report will show you:
how to identify and secure profitable opportunities
strategies and techniques for negotiating the best Insights into successfully managing the
agreement in-house legal function
the techniques of successfully managing a license BARRY OMEARA 65.00
operation.
1 85418 174 2 2000
Negotiating the fault line between private practice and

Damages and other remedies for breach
in-house employment can be tricky, as the scope for
of commercial contracts conflicts of interest is greatly increased. Insights into
ROBERT RIBEIRO 125.00 successfully managing the In-house legal function discusses
and suggests ways of dealing with these and other issues.
1 85418 226 X 2002
This valuable new report sets out a systematic approach

for assessing the remedies available for various types of
breach of contract, what the remedies mean in terms of
compensation and how the compensation is calculated.
Commercial contracts drafting

techniques and precedents
ROBERT RIBEIRO 125.00
1 85418 210 2 2002
The Report will: For full details of any title, and to view sample
extracts please visit: www.thorogood.ws
Improve your commercial awareness and planning
skills You can place an order in four ways:
Enhance your legal foresight and vision 1 Email: orders@thorogood.ws
Help you appreciate the relevance of rules and 2 Telephone: +44 (0)20 7749 4748
guidelines set out by the courts 3 Fax: +44 (0)20 7729 6110
Ensure you achieve your or your clients commercial 4 Post: Thorogood, 10-12 Rivington Street,
objectives London EC2A 3DU, UK
t +44 (0)20 7749 4748 e info@thorogood.ws w w w w. t h o r o g o o d . w s

The legal protection of databases Email legal issues
SIMON CHALTON 145.00 SUSAN SINGLETON 95.00
1 85418 245 5 2001 1 85418 215 3 2001
Inventions can be patented, knowledge can be What are the chances of either you or your employees
protected, but what of information itself? breaking the law?
This valuable report examines the current EU [and so The report explains clearly:
EEA] law on the legal protection of databases, including How to establish a sensible policy and whether or
the sui generis right established when the European not you are entitled to insist on it as binding
Union adopted its Directive 96/9/EC in 1996.
The degree to which you may lawfully monitor your
employees e-mail and Internet use
Litigation costs The implications of the Regulation of Investigatory
MICHAEL BACON 95.00 Powers Act 2000 and the Electronic Communications
Act 2000
1 85418 241 2 2001
How the Data Protection Act 1998 affects the degree
The rules and regulations are complex but can be to which you can monitor your staff
turned to advantage.
What you need to watch for in the Human Rights Act
The astute practitioner will understand the importance 1998
and relevance of costs to the litigation process and will TUC guidelines
wish to learn how to turn the large number of rules to
Example of an e-mail and Internet policy document.
maximum advantage.
International commercial agreements

REBECCA ATTREE 175
1 85418 286 2 2002
A major new report on recent changes to the law and

their commercial implications and possibilities.
The report explains the principles and techniques of

successful international negotiation and provides a
valuable insight into the commercial points to be consid-
ered as a result of the laws relating to: pre-contract,
private international law, resolving disputes (including
alternative methods, such as mediation), competition law,
drafting common clauses and contracting electronically.
It also examines in more detail certain specific interna-

tional commercial agreements, namely agency and
distribution and licensing.
For full details of any title, and to view sample

You can place an order in four ways:

1 Email: orders@thorogood.ws
2 Telephone: +44 (0)20 7749 4748
3 Fax: +44 (0)20 7729 6110
4 Post: Thorogood, 10-12 Rivington Street,
London EC2A 3DU, UK
S e e f u l l d e t a i l s o f a l l T h o r o g o o d t i t l e s o n w w w. t h o r o g o o d . w s
HR AND EMPLOYMENT LAW
Employee sickness and fitness for work How to turn your HR strategy into reality
successfully dealing with the legal system TONY GRUNDY 129.00
GILLIAN HOWARD 95.00
1 85418 183 1 1999
1 85418 281 1 2002 A practical guide to developing and implementing an
Many executives see Employment Law as an obstacle effective HR strategy.
course or, even worse, an opponent but it can contribute
positively to keeping employees fit and productive.
Internal communications
This specially commissioned report will show you how
JAMES FARRANT 125
to get the best out of your employees, from recruitment
to retirement, while protecting yourself and your firm 1 85418 149 1 July 2003
to the full.
How to improve your organisations internal commu-
nications and performance as a result.
Data protection law for employers There is growing evidence that the organisations that get
SUSAN SINGLETON 125 it right reap dividends in corporate energy and enhanced
performance.
1 85418 283 8 May 2003
The new four-part Code of Practice under the Data Protec-

tion Act 1998 on employment and data protection makes
Mergers and acquisitions confronting
places a further burden of responsibility on employers the organisation and people issues
and their advisers. The Data protection Act also applies MARK THOMAS 95.00
to manual data, not just computer data, and a new tough
enforcement policy was announced in October 2002. 1 85418 008 8 1997
Why do so many mergers and acquisitions end in

tears and reduced shareholder value?
Successful graduate recruitment
This report will help you to understand the key practical
JEAN BRADING 69.00
and legal issues, achieve consensus and involvement at
1 85418 270 6 2001 all levels, understand and implement TUPE regulations
and identify the documentation that needs to be drafted
Practical advice on how to attract and keep the best.
or reviewed.
Successfully defending employment

New ways of working
tribunal cases
STEPHEN JUPP 99.00
DENNIS HUNT 95
1 85418 169 6 2000
1 85418 267 6 2003
New ways of working examines the nature of the work
Fully up to date with all the Employment Act 2002 done in an organisation and seeks to optimise the working
changes. practices and the whole context in which the work takes
165,000 claims were made last year and the numbers place.
are rising. What will you do when one comes your
way?

Knowledge management changes to internal disciplinary and grievance
procedures
SUE BRELADE, CHRISTOPHER HARMAN 95.00
significant changes to unfair dismissal legislation
1 85418 230 7 2001
new rights for those employed on fixed-term contracts
Managing knowledge in companies is nothing new. the introduction of new rights for learning
However, the development of a separate discipline called representatives from an employers trade union
knowledge management is new the introduction of
recognised techniques and approaches for effectively This specially commissioned new report examines each
managing the knowledge resources of an organisation. of the key developments where the Act changes existing
This report will provide you with these techniques.
provisions or introduces new rights. Each chapter deals
with a discreet area.
Reviewing and changing contracts
of employment
Email legal issues
ANNELISE PHILLIPS, TOM PLAYER
SUSAN SINGLETON 95.00
and PAULA ROME 125
1 85418 215 3 2001
1 85418 296 X 2003
360,000 email messages are sent in the UK every
The Employment Act 2002 has raised the stakes. Imper-
second (The Guardian). What are the chances of either
fect understanding of the law and poor drafting will now
you or your employees breaking the law?
be very costly.
The report explains clearly:
This new report will:
How to establish a sensible policy and whether or
Ensure that you have a total grip on what should be
not you are entitled to insist on it as binding
in a contract and what should not
The degree to which you may lawfully monitor your
Explain step by step how to achieve changes in the
employees e-mail and Internet use
contract of employment without causing problems
The implications of the Regulation of Investigatory
Enable you to protect clients sensitive business
Powers Act 2000 and the Electronic Communications
information
Act 2000
Enhance your understanding of potential conflict
How the Data Protection Act 1998 affects the degree
areas and your ability to manage disputes effectively.
to which you can monitor your staff
What you need to watch for in the Human Rights Act
Applying the Employment Act 2002 1998
crucial developments for employers TUC guidelines
and employees
Example of an e-mail and Internet policy document.
AUDREY WILLIAMS 125
1 85418 253 6 May 2003
The Act represents a major shift in the commercial

environment, with far-reaching changes for employers
and employees. The majority of the new rights under the
family friendly section take effect from April 2003 with For full details of any title, and to view sample
most of the other provisions later in the year. extracts please visit: www.thorogood.ws
The consequences of getting it wrong, for both employer You can place an order in four ways:
and employee, will be considerable financial and 1 Email: orders@thorogood.ws
otherwise. The Act affects nearly every aspect of the work 2 Telephone: +44 (0)20 7749 4748
place, including:
3 Fax: +44 (0)20 7729 6110
flexible working
family rights (adoption, paternity and improved London EC2A 3DU, UK
maternity leave)
SALES, MARKETING AND PR
Implementing an integrated marketing Tendering and negotiating for

communications strategy MoD contracts
NORMAN HART 99.00 TIM BOYCE 125.00
1 85418 120 3 1999 1 85418 276 5 2002
Just what is meant by marketing communications, or This specially commissioned report aims to draw out the
marcom? How does it fit in with other corporate main principles, processes and procedures involved in
functions, and in particular how does it relate to business tendering and negotiating MoD contracts.
and marketing objectives?
Defending your reputation

Strategic customer planning
SIMON TAYLOR 95.00
ALAN MELKMAN AND
PROFESSOR KEN SIMMONDS 95.00 1 85418 251 2001
Buildings can be rebuilt, IT systems replaced. People

1 85418 255 2 2001
can be recruited, but a reputation lost can never be
This is very much a how to Report. After reading those regained
parts that are relevant to your business, you will be able The media will publish a story you may as well
to compile a plan that will work within your particular ensure it is your story Simon Taylor
organisation for you, a powerful customer plan that you
can implement immediately. Charts, checklists and diag- News is whatever someone, somewhere, does not
rams throughout. want published William Randoplh Hearst
When a major crisis does suddenly break, how ready will

Selling skills for professionals you be to defend your reputation?
KIM TASSO 65.00
1 85418 179 3 2000 Insights into understanding the financial

media an insiders view
Many professionals still feel awkward about really
selling their professional services. They are not usually SIMON SCOTT 99.00
trained in selling. This is a much-needed report which
1 85418 083 5 1998
addresses the unique concerns of professionals who wish
to sell their services successfully and to feel comfortable This practical briefing will help you understand the way
doing so. the financial print and broadcast media works in the UK.
Comprehensive, well written and very readable
this is a super book, go and buy it as it is well worth
European lobbying guide
the money Professional Marketing International
BRYAN CASSIDY 129.00
Corporate community investment 1 85418 144 0 2000
CHRIS GENASI 75.00 Understand how the EU works and how to get your
message across effectively to the right people.
1 85418 192 0 1999
Supporting good causes is big business and good

business. Corporate community investment (CCI) is the
general term for companies support of good causes, and
is a very fast growing area of PR and marketing.

Lobbying and the media: working with Managing corporate reputation
politicians and journalists the new currency
MICHAEL BURRELL 95.00 SUSAN CROFT and JOHN DALTON 125
1 85418 240 4 2001 1 85418 272 2 June 2003
Lobbying is an art form rather than a science, so there ENRON, WORLDCOM who next?
is inevitably an element of judgement in what line to take.
At a time when trust in corporations has plumbed new
This expert report explains the knowledge and techniques
depths, knowing how to manage corporate reputation
required.
professionally and effectively has never been more crucial.
Strategic planning in public relations

Surviving a corporate crisis
KIERAN KNIGHTS 69.00 100 things you need to know
1 85418 225 0 2001 PAUL BATCHELOR 125
Tips and techniques to aid you in a new approach 1 85418 208 0 April 2003
to campaign planning.
Seven out of ten organisations that experience a
Strategic planning is a fresh approach to PR. An approach corporate crisis go out of business within 18 months.
that is fact-based and scientific, clearly presenting the
arguments for a campaign proposal backed with evidence. This very timely report not only covers remedial action
after the event but offers expert advice on preparing every
department and every key player of the organisation so
that, should a crisis occur, damage of every kind is limited
as far as possible.
FINANCE
Tax aspects of buying and selling Practical techniques for effective project
companies investment appraisal
MARTYN INGLES 99.00 RALPH TIFFIN 99.00
1 85418 189 0 2001 1 85418 099 1 1999
This report takes you through the buying and selling How to ensure you have a reliable system in place.
process from the tax angle. It uses straightforward case
Spending money on projects automatically necessitates
studies to highlight the issues and more important
an effective appraisal system a way of deciding whether
strategies that are likely to have a significant impact on
the correct decisions on investment have been made.
the taxation position.
Tax planning opportunities for family

businesses in the new regime
CHRISTOPHER JONES 49.00
1 85418 154 8 2000
Following recent legislative and case law changes, the

whole area of tax planning for family businesses requires
very careful and thorough attention in order to avoid the
many pitfalls.
MANAGEMENT AND PERSONAL DEVELOPMENT
Strategy implementation through project

management
TONY GRUNDY 95.00
1 85418 250 1 2001
The gap
Far too few managers know how to apply project
management techniques to their strategic planning. The
result is often strategy that is poorly thought out and
executed.
The answer
Strategic project management is a new and powerful
process designed to manage complex projects by
combining traditional business analysis with project
management techniques.
For full details of any title, and to view sample

You can place an order in four ways:

1 Email: orders@thorogood.ws
2 Telephone: +44 (0)20 7749 4748
3 Fax: +44 (0)20 7729 6110
London EC2A 3DU, UK

175 Reviewing and Changing Contracts of Employment PDF

Transféré par

Informations du document

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

175 Reviewing and Changing Contracts of Employment PDF

Transféré par

Droits d'auteur :

Formats disponibles

THOROGOOD

A SPECIALLY COMMISSIONED REPORT

Annelise Tracy Phillips, Paula Rome,

A SPECIALLY COMMISSIONED REPORT

Annelise Tracy Phillips, Paula Rome,

Other Thorogood Thorogood Publishing Ltd

t: 020 7749 4748

All rights reserved. No part

HR Business Partners and otherwise, without the prior

Susan Singleton circulated without the publishers

No responsibility for loss

Dennis Hunt result of any material in this

Special discounts for bulk quantities

Printed in Great Britain

Annelise Tracy Phillips

THOROGOOD PROFESSIONAL INSIGHTS

Tracy currently delivers training to a range of different organisations from

THOROGOOD PROFESSIONAL INSIGHTS

1 CREATING THE CONTRACT OF EMPLOYMENT 1

2 REVIEWING AND CHANGING THE

Handbook of policies and procedures.....................................................22

THOROGOOD PROFESSIONAL INSIGHTS

4 PRACTICAL DRAFTING CONSIDERATIONS 68

THOROGOOD PROFESSIONAL INSIGHTS

6 CHANGING THE CONTRACT 98

THOROGOOD PROFESSIONAL INSIGHTS

THOROGOOD PROFESSIONAL INSIGHTS

Invitation to treat ...................................................................................3

Withdrawal of offer ...............................................................................4

Intention to create legal relations ........................................................5

Statement of main terms and conditions ............................................5

Contents of the written statement .......................................................6

The terms of the contract of employment...........................................8

A binding contract of any kind must contain the following elements:

Intention to create legal relations

An issue which regularly arises is what constitutes a satisfactory reference.

THOROGOOD PROFESSIONAL INSIGHTS 2

The difference is that, if a candidate accepts an invitation to treat, they are, in

Advertisements do not constitute offers capable of acceptance but merely invita-

THOROGOOD PROFESSIONAL INSIGHTS 3

An individual who claims breach of contract and succeeds is entitled to damages

THOROGOOD PROFESSIONAL INSIGHTS 4

Intention to create legal relations

Statement of main terms and conditions

If an employer fails to provide written particulars and a claim is tagged on to

Technically the statement is not a contract, although it is very strong evidence

THOROGOOD PROFESSIONAL INSIGHTS 5

Contents of the written statement

The name of the employer and employee; and

the date when the employment began; and

the date on which the employees period of continuous employment

Scale of remuneration, or the method of calculating the remuneration;

the intervals at which the remuneration is paid (i.e. weekly, monthly

any terms and conditions relating to hours of work such as details

terms and conditions relating to entitlement to holidays, including public

either the place of work or an indication that the employee is required

THOROGOOD PROFESSIONAL INSIGHTS 6

Incapacity for work due to sickness or injury, including any provision

terms and conditions relating to pension schemes and confirmation

Length of service Minimum notice

1 month less than 2 years 1 week (from employer)

2 years 2 weeks (from employer)

3-12 years 3-12 weeks (from employer on