Employment Rights Act 1996: Essential Summary

The Employment Rights Act 1996 is a significant piece of legislation. When introduced, it consolidated many existing statutory obligations on employers and statutory rights of employees, from the right to employment particulars on commencing employment to the right not to be unfairly dismissed on termination of employment.

In this guide, we summarise the key provisions of the Employment Rights Act 1996 (ERA), emphasising the importance for employers in understanding and complying with the ERA and the risks of failing to do so.

 

Employment Rights Act 1996: key rights & responsibilities

 

The Employment Rights Act (ERA) 1996 sets out a wide range of different rights and responsibilities. Some of the key provisions include:

 

• A right to receive a statement of employment particulars
• A right not to suffer unauthorised deductions from wages
• A right not to suffer detriment in employment
• A right to maternity leave, adoption leave, shared parental leave and paternity leave
• A right to request flexible working arrangements
• A right to minimum notice on termination of employment
• A right not to be unfairly dismissed
• A right to a minimum statutory redundancy payment

 

This list is not exhaustive, where employers and those acting within the workplace on their behalf, such as line managers and HR personnel, must familiarise themselves with each of the provisions of the 1996 Act to help ensure compliance at all times. It is also incumbent upon employers to ensure that their management teams and HR staff are adequately trained in these areas of law, so that they fully understand the employee’s rights and the employer’s responsibilities in a broad range of different employment scenarios.

Below we set out just a brief overview of each of these areas.

 

Right to receive a statement of employment particulars

 

Under Part 1 of the ERA 1996, where an employee commences employment, the employer shall provide that employee with a written statement of particulars to summarise the main terms of employment. The right to a statement of employment particulars was extended to all workers, not just employees, under regulations that came into force in April 2020.

Importantly, a statement of particulars of employment is not an employment contract, but a written statement, comprising a principal statement and a wider written statement. An employer must provide the principal statement on day one of employment, including the employee’s or worker’s job title and start date, plus their pay and working hours.

On the first day of starting work, the employer must also provide information relating to sick pay and procedures, other paid leave, such as maternity and paternity leave, as well as notice periods on termination of employment. The employer can elect whether to include this information within the principal statement or to provide it in a separate document or on the staff intranet. The wider written statement, to be provided within 2 months of the employee or worker starting their new job, must go on to include information about things like pensions and pension schemes, as well as any disciplinary and grievance procedures.

If an employee or worker has a problem receiving their written statement and this cannot otherwise be resolved, they can take the matter to an employment tribunal.

 

Right not to suffer unauthorised deductions from wages

 

Under Part II of the ERA 1996, which contains provisions around protection of wages, employees and workers have the right not to suffer unauthorised deductions from their wages. It is unlawful for an employer to make a deduction from wages unless:

 

• the deduction is required or authorised by statute, for example, Income Tax and National Insurance deductions
• the deduction is permitted by a relevant provision in the individual’s contract of employment, provided they have been given a written copy of the relevant terms or a written explanation of these before any deduction is made
• the employee or worker has given written consent to the employer’s deduction prior to undertaking the work for which the deduction has been made.

 

The ERA 1996 also provides for limited excepted deductions, for example, where an employee or worker has been involved in an industrial strike or other industrial action, or where they have been previously overpaid. However, a deduction cannot normally reduce an employee’s or worker’s pay below the National Minimum Wage, even if they agree to it.

In cases where there has clearly been an unlawful deduction of wages, the employee or worker will be entitled to go before an employment tribunal to recover the money owed.

 

Right not to suffer detriment in employment

 

Under Part V of the ERA 1996, an employee has the right not to suffer a detriment in their employment on the basis of any one of a number of different reasons. These include where the employee has been required to attend jury service, has acted as a health and safety representative, has refused to opt out of the maximum working week or where they have exercised their right to make a request for flexible working, to name but a few.

In broad terms, these statutory provisions are designed to prevent employees from being treated badly by their employer after using a protected employment right. A detriment refers to any treatment by the employer that is either demeaning or detrimental, including where an employee is denied training or development opportunities, refused a promotion, is bullied or harassed, is demoted or suspended, or subjected to disciplinary sanctions.

If the matter cannot be resolved internally, the employee may be able to take their employer to an employment tribunal, claiming not only for any money lost because of how they have been treated but potentially also compensation for injury to feelings.

 

Rights to maternity and paternity entitlements

 

Under Part VIII of the ERA 1996, various rights are set out around maternity leave, adoption leave, shared parental leave and paternity leave, all of which have their own specific rules and requirements. For example, all employees, provided they give the correct notice, will be eligible for 52 weeks of statutory maternity leave, where notice must be given at least 15 weeks before the employee’s expected due date.

Similarly, when an employee takes time off to either adopt a child or have a child through a surrogacy arrangement, they may be eligible for 52 weeks’ statutory adoption leave, while the other parent may instead be entitled to take either 1 or 2 weeks of paid paternity leave. For some employees, however, where they have had a baby or adopted a child, they can take shared parental leave, allowing them to share up to 50 weeks of leave between them.

Employees will also enjoy certain employment protections while on these types of leave including, for example, a right to accrue annual leave entitlement and to return to their job role. They will also have a right not to suffer any detriment because they have taken leave.

If an employee does not get their full maternity, paternity or parental rights, they can take their employer to an employment tribunal to seek compensation. Equally, if they are treated badly for asking for these rights, this can again lead to a costly tribunal claim.

 

Right to request flexible working arrangements

 

Under Part 8A of the Employment Rights Act 1996, employees have the right to request flexible working in relation to their hours, times and place of work. This could include, for example, working condensed hours over fewer days, having flexible start and finish times, or working partly from the workplace and partly from home, known as hybrid-working.

Importantly, all employees have the legal right to request flexible working, not just parents and carers, provided they have worked for their employer continuously for 26 weeks, although proposed changes to the law mean that this may become a day one right. The proposed new changes may also mean that an employee can make two flexible working requests in any 12-month period, rather than just one as the law currently stands.

Once a request has been made, the employer is not under a statutory duty to accept the request and can refuse an application if they have a good business reason for doing so. Still, they must deal with flexible working requests in a reasonable manner. This will include assessing the advantages and disadvantages of the employee’s request, holding a meeting with the employee to discuss the request and also offering an appeals process.

If an employer fails to handle a request in a reasonable manner, the employee can take them to an employment tribunal, where the tribunal may order the employer to reconsider the flexible working request and pay the employee compensation.

 

Right to notice on termination of employment

 

Under Part IX of the Employment Rights Act 1996, which sets out provisions around termination of employment, even though there are a several ways in which it is lawful to bring employment to an end, an employee will still be entitled to a statutory minimum notice period or, where the contract provides for this, pay in lieu of notice.

The ERA provides a minimum amount of notice that an employer has to give to lawfully terminate employment, where this is set by the length of an employee’s service. When dismissing an employee, as an absolute minimum, an employer must usually give:

 

• 1 weeks’ notice: for those employed between 1 month to 2 years
• 1 weeks’ notice for each year: if employed between 2 to 12 years
• 12 weeks’ notice maximum: if employed for 12 or more years.

 

Complying with notice periods can be crucial to avoid any claim for wrongful dismissal, where the rules under the ERA set out the statutory minimum period that an employee will be legally entitled to. Their contract of employment may provide for a longer notice period.

 

Right to not be unfairly dismissed

 

Under Part X of the ERA 1996, an employee has the right not to be unfairly dismissed. By way of comparison, wrongful dismissal is when an employer is in breach of contract for, among other things, failing to provide an employee with their correct notice period. In contrast, unfair dismissal is where the reason for the dismissal itself is unlawful.

There are five potentially fair reasons for dismissal, as set out under the Employment Rights Act 1996, including conduct, capability, redundancy, illegality or for some other substantial reason. This means that unless the employer can show a fair reason for dismissing an employee, they risk being exposed to a tribunal claim for unfair dismissal where the employee meets the qualifying 2 year continuous service requirement. The employer will also need to satisfy the tribunal that relying on the reason given for dismissal was reasonable in all the circumstances and they acted reasonably in reaching that decision.

Importantly, even where an employee does not meet the qualifying service requirement, the ERA sets out various reasons where dismissal relating to one of these reasons would make that decision automatically unfair. Designed to protect an employee’s basic statutory rights and more, there are a plethora of grounds which could amount to an automatically unfair dismissal, for example, being dismissed for making a request for flexible working.

 

Right to statutory redundancy payment

 

Under Part X1 of the ERA 1996, which deals with provisions around redundancy payments, employees with 2 years of service are entitled to a minimum amount of statutory redundancy pay. Even though an employee can be fairly dismissed by reason of redundancy, this ensures that loyal employees are adequately compensated for early termination of their contract.

Statutory redundancy pay is calculated based on an employee’s age, their pay (currently capped at £643 per week) and their length of service (capped at 20 years).

A qualifying employee will be entitled to:

 

• half a week’s pay: for each full year they were aged under 22
• one week’s pay: for each full year they were aged 22 or older, but under 41
• one and a half week’s pay: for each full year they were aged were 41 or older

 

An employer may also have their own contractual redundancy scheme in place, offering redundancy pay at an enhanced rate and on enhanced terms. Still, as an absolute minimum, employees with 2 years of service must receive statutory redundancy pay. Any failure to make the required minimum payment can again lead to a tribunal claim.

 

Need Assistance?

 

DavidsonMorris’ employment law specialists are on hand to support and advise employers on their obligations under UK employment law, including the Employment Rights Act 1996. For expert guidance, contact us.

 

Employment Rights Act FAQs

 

What is the Employment Rights Act 1996?

The Employment Rights Act 1996 is a key piece of legislation in the UK that outlines the rights of employees and the responsibilities of employers. It covers a range of employment issues, including contracts, working hours, unfair dismissal, and redundancy.

 

Who is covered by the Employment Rights Act 1996?

The Act applies to employees working under a contract of employment in the UK. This includes full-time, part-time, and temporary workers, although some rights may vary depending on the nature of the employment.

 

What are an employer’s obligations under the Act?

Employers are required to provide employees with a written statement of the main terms and conditions of their employment, ensure fair treatment in relation to working hours and conditions, and follow proper procedures in cases of dismissal or redundancy. Employers must also adhere to minimum wage laws and protect employees from unfair dismissal and discrimination.

 

What rights do employees have under the Act?

Employees have the right to a written statement of employment terms, protection from unfair dismissal, and fair treatment in cases of redundancy. They are also entitled to minimum wage, maternity and paternity leave, and protection from discrimination and harassment at work.

 

How can employers ensure compliance with the Employment Rights Act 1996?

Employers can ensure compliance by regularly reviewing their employment policies, providing training to HR and management on the legal requirements, and maintaining accurate records of employment practices. It is also advisable to seek legal advice when necessary to navigate complex areas of the law.

 

What are the consequences of non-compliance with the Act?

Failure to comply with the Employment Rights Act 1996 can result in legal action against the employer, including claims for unfair dismissal or discrimination. This can lead to financial penalties, damage to the employer’s reputation, and the requirement to reinstate or compensate affected employees.

 

 

Glossary

 

 

Term	Definition
Employment Rights Act 1996	A key piece of UK legislation that outlines the rights of employees and the responsibilities of employers, covering areas such as contracts, dismissal, and redundancy.
Employee	An individual working under a contract of employment in the UK, which may include full-time, part-time, and temporary workers.
Employer	A person or organisation that hires and manages employees, responsible for ensuring compliance with employment law, including the Employment Rights Act 1996.
Written Statement of Employment	A document provided by the employer that outlines the main terms and conditions of an employee’s contract, including pay, working hours, and job responsibilities.
Unfair Dismissal	Termination of an employee’s contract without a fair reason or without following the correct legal procedure, as defined by the Employment Rights Act 1996.
Redundancy	A form of dismissal that occurs when an employer needs to reduce their workforce, often due to economic reasons, and must be conducted according to specific legal procedures.
Minimum Wage	The lowest hourly wage that an employer is legally required to pay an employee, as stipulated by UK law.
Maternity/Paternity Leave	Statutory leave granted to employees in connection with the birth or adoption of a child, with the right to return to work after the leave period.
Discrimination	Unfair treatment of an employee based on protected characteristics such as age, race, gender, disability, or sexual orientation, prohibited under UK law.
ACAS	Advisory, Conciliation and Arbitration Service, a UK public body that provides free and impartial advice on workplace rights, rules, and best practices.
Grievance Procedure	A formal process through which an employee can raise concerns or complaints with their employer, often regarding issues like workplace treatment or conditions.
Employment Tribunal	A judicial body in the UK that hears disputes between employers and employees, including cases related to unfair dismissal, discrimination, and redundancy.
Compliance	Adherence to laws, regulations, and guidelines, particularly those outlined in the Employment Rights Act 1996, by employers in managing their workforce.
Legal Obligation	A requirement under the law that must be fulfilled by an employer, such as providing a safe workplace or issuing a written statement of employment.
Case Study	An example or scenario used to illustrate how the Employment Rights Act 1996 applies in real-world situations, often highlighting the consequences of compliance or non-compliance.