Is your business growing and it’s time to consider employing staff? This update is part of a series of blogs dealing with key legal considerations for start-ups. The focus of this piece is on employment contracts i.e. Section 1 Statements. Our Employment expert, Elliot tells us more.
There has been a long-standing statutory obligation on employers to provide their employees with a written statement of employment particulars (often referred to as a “Section 1 Statement”). Employers have often met this obligation by providing an employment contract which can include the necessary details. This requirement applies to employees and workers.
Section 1 Statements are a “day 1 right” in that most of the particulars must be given no later than the beginning of employment, with no minimum service requirement.
Form and content of a Section 1 Statement
The particulars which need to be included in a Section 1 Statement can be categorised by the forms they need to be presented in. These forms are:
- particulars which need to be given in a single document (or principal statement);
- particulars which may be contained in a reasonably accessible document; and
- particulars which may be given in instalments within 2 months of the employee’s commencement date.
Particulars which need to be given in a single document set out the fundamentals of an employment relationship. These are usually contained in the employment contract and must include the following:
- names of employer and employee/worker;
- date employment or engagement begins;
- for employees only: date that their continuous employment began, even if that’s the same date as the start of their employment (which it usually is);
- rate of pay and frequency of payment;
- hours of work (including normal working hours, days of week and whether hours/days are variable (and, if so, how they vary));
- details of their holiday entitlement (including public holidays) and holiday pay;
- any other benefits (including non-contractual benefits);
- length of notice of termination required from both parties;
- job title or brief description of work;
- if applicable: details of non-permanent employment or engagement (e.g. period of fixed-term contract);
- any probationary period which starts at the beginning of the employment / engagement, including conditions and duration;
- place of work and address of employer;
- whether the worker is required to work outside the UK for over one continuous month. If not, that fact must be stated;
- any training entitlement which the employer requires the worker to complete; and
- any training which the employer requires but does not pay for.
Reasonably accessible document
Some particulars may be left out from the principal statement provided that they are available in a reasonably accessible document. Among other things, these include:
- sick leave and pay;
- any other paid leave;
- pension scheme information (this can be provided within 2 months);
- details of any collective agreements directly affecting terms (this can be provided within 2 months);
- any other training entitlement (this can be provided within 2 months); and
- disciplinary and grievance procedures (this can be provided within 2 months) (although we would recommend that these procedures are not contractual entitlements).
The question of what is considered to be “reasonably accessible” in relation to these particulars is defined as something which an employee or worker has reasonable opportunities to read in the course of their employment or engagement or is made reasonably accessible to the employee or worker in some other way.
Examples of this include a staff handbook, a notice on a staff notice board, or a collective agreement with a trade union. They may also include documents which could be easily accessed from a business’ HR team, or on its intranet.
What happens if I don’t give a Section 1 Statement or it does not comply?
Employees and workers will not be able to bring a freestanding claim for a failure to provide a written statement. However if an employee or worker brings a separate, successful claim in the employment tribunal, and they are able to show that they were not provided with a compliant written statement, they may be awarded an additional 2 to 4 weeks’ pay (subject to a statutory cap, currently £544/week).
The penalty for breaching this requirement is quite small, although total costs might be significant if a large workforce all bring claims as part of some other litigation. It also creates a poor impression before an Employment Tribunal and leaves areas of uncertainty in relation to contractual entitlements which may become the subject of a dispute.
Edwin Coe has a specialist start-up team and is here to help you as your business develops.
For more information on start-ups and the legal packages we offer, please visit the start-up hub or for employment and staffing assistance, speak to Elliot Francis in our Start-up and Employment team.
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Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
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