by Kate McCormick - Solicitor
A guide on basic employee rights in the workplace.
Employment legislation lays down basis rights that all employees are entitled to. However, the application of these rights varies depending on various factors and it can sometimes be complicated to work out what each staff member is entitled to. This guide explains the various rights and benefits available to employees and workers and the criteria for qualifying for them.
National Minimum Wage
This is the most basic fundamental right for all employees and workers. At present every worker is entitled to a minimum wage of:
£5.80 per hour for workers who are 21 or over
£4.83 per hour for workers between 18 and 21
£3.57 per hour for workers between 16 and 17
The government has increased this from October 2010 to:
£5.93 per hour for workers who are 21 or over
£4.92 per hour for workers between 18 and 21
£3.64 per hour for workers between 16 and 17
A minimum wage of £2.50 per hour is also due to come into force from October 2010 for apprentices who are under 19 or in the first year of their apprenticeships.
Sick Pay Entitlement
There are two types of statutory sick pay (SSP) to which an employee may be entitled:
Occupational or contractual sick pay is any sick pay that an employee is entitled to under the employer’s own sick pay scheme. This should be set out in the employee’s contract of employment and should be equal to or greater than the legal minimum amount of statutory sick pay. If you decide to offer contractual sick pay you will need to decide upon the qualifying conditions for payment and it may be useful to seek the advice of a solicitor in drawing up the terms and conditions.
Statutory sick pay is a fundamental right available to all eligible employees if their employer does not operate a contractual scheme or if they do not qualify for any such scheme. It is available to all employees and also part-time, temporary, agency or casual workers who meet the conditions. It is payable for a maximum period of twenty eight weeks.
The qualifying conditions for payment are:
• That the employee/worker has completed some work for the employer;
• That the employee/worker has notified the employer of their sickness within seven days of becoming sick or within any stricter time limits imposed by the employer;
• That the sickness has lasted for four or more consecutive days (the period of incapacity for work ‘PIW’). Any PIW’s are linked where they occur within eight weeks;
• That the employee/worker’s pay satisfies the lower earnings limit for National Insurance Contributions (currently average weekly earnings of £97 per week);
• That the employee/worker is or would be eligible to pay employer’s Class 1 National Insurance Contributions.
SSP should be paid when the worker’s/employee’s wages would normally be paid. It is calculated in accordance with a daily rate (discounting the first four days of sickness). The daily rate is worked out by dividing the weekly rate (currently £79.15) by the number of days normally worked that the employee/worker is off sick per week. So a part time worked would receive a higher daily rate than a full time worker.
SSP should be discontinued if the employee/worker becomes pregnant and starts to receive statutory maternity pay or maternity allowance. It may also be discontinued if the employee/worker has had linked periods of sickness for over three years.
Accurate records should be kept of the amount of SSP paid and the period(s) of sickness and the necessary forms sent to the employee/worker such as a self certification form for the first seven days of illness and a change over form if SSP cannot/ can no longer be paid. Details on entitlement to SSP should be set out in the contract of employment.
If an employee/worker is not eligible or is sick for longer than twenty eight weeks, they may qualify for employment and support allowance from the benefits’ office. You should send them a SSP1 form to complete and send to the benefits’ office.
The employer can recover the excess of SSP paid from HMRC if the total amount paid to all employees/workers is greater than 13 per cent of the total gross PAYE and employer’s Class 1 National Insurance contributions in any month.
Finally, if an employee/worker has been off sick for a lengthy period, the employer may wish to discontinue their employment. Although long term sickness is a potentially fair reason for dismissal, care should be taken as it can also constitute unfair/wrongful dismissal if the correct procedure is not followed including considering any reasonable alternatives such as part time or home working. If you are in any doubt as to whether an employee/worker can be dismissed you should take legal advice before you act.
Maternity Leave Entitlement
All employees are entitled to a statutory maximum of fifty two weeks’ maternity leave. They do not have to take this amount but there is a minimum amount of leave which they must take of two weeks and four weeks if they work in a factory. It is open to an employer to offer greater rights than these, which should be set out in the contract of employment. The period of maternity leave cannot begin before the beginning of the eleventh week before the expected birth date unless the employee has been off work for a pregnancy-related illness in the month prior to this in which case the employer is entitled to commence it from then. Once the employee has notified the employer of the date that she wants the maternity leave to begin, the employer should notify her of the date that it will end i.e. fifty two weeks’ later. This is to ensure that the employer can take action against the employee if she does not return by that date.
The right remains if there is a still birth after twenty four weeks’ of pregnancy or if the baby dies after birth. Before twenty four weeks, the employee may be entitled to contractual or statutory sick pay and/or compassionate leave.
Provided that the employee fulfils the conditions, they will be entitled to Statutory Maternity Pay (SSP) whilst they are on maternity leave. The rate is calculated at 90% of their average weekly earnings for the first six weeks’ of leave, then the lowest of 90% of the average weekly earnings or the statutory amount (currently £124.88) for the next thirty three weeks. After thirty nine weeks, SMP will not longer be payable, although it is open to the employer to offer a contractual payment thereafter.
The conditions for receiving SMP are that the employee:
• Provides the employer with proof that she is pregnant;
• Informs the employer that she wishes to take maternity leave twenty eight days in advance, unless this is not reasonably practicable;
• Has average weekly earnings of or more than the earnings limit for National Insurance contributions (currently £97);
• Has worked for the employer for at least twenty six consecutive weeks, immediately prior to the fifteenth week before the expected birth date.
During maternity leave, the employee’s terms and conditions of employment continue as usual so the employee is entitled to the usual benefits other than wages or bonuses (depending on the terms of the bonus scheme). This applies to pay rises so that if she is entitled to a pay rise, this should be reflected in a higher rate of SMP. The period of maternity leave is treated as continuous employment. It is possible to make reasonable contact with an employee on maternity leave and she should be given the same amount of information as other employees regarding changes in the workplace/benefits etc. Additionally an employee can come in to for up to ten days during the maternity leave (Keeping in touch days ‘KIP’) if she wants to and the employer agrees to this and may receive pay as well as SMP for such days if the employer offers this. SMP will not be paid for any week in which she works if she has already worked for ten KIP days. The employee can return to work early provided she has had more than two (or four) weeks’ off and has given the employer eight weeks’ notice of her return. Similarly, if she wants to return later than agreed (but within the fifty two weeks’) she must give eight weeks’ notice. If the employer gives notice to terminate her employment, her employer must continue to pay SSP until she has found new employment or her period of maternity leave has ended.
If the employee returns to work after having taken only twenty six weeks’ or less maternity leave, the employer must ensure that she can return on the same terms and conditions of employment as before she left. If she returns after this period, the employer does not have to guarantee her the same job or terms and conditions but is obliged to offer her an alternative suitable job on no less favourable terms and conditions.
Certain employees (as opposed to workers) may make a request for flexible working hours, provided they have twenty six weeks’ of continuous employment and have not made a request in the past twelve months. If the employee is the parent or carer of a child under seventeen, a disabled child under eighteen or a dependant adult, the employer must seriously consider and must implement the request if this is reasonably possible.
If you are unsure as to what action you can take in relation to an employee on or returning from maternity leave you should seek legal advice as a dismissal for reasons relating to maternity rights will be automatically unfair.
Paternity Leave Entitlement
Employees are entitled to take Statutory Paternity Leave (SPL) of two weeks, immediately following the birth of their child. To qualify, they must be the baby’s biological father or the husband or civil partner of the baby’s mother and have or share responsibility for the baby’s upbringing. They must also have twenty six weeks’ of continuous employment up to the fifteenth week before the expected date of birth and continue to work for the employer up until the birth. They must give fifteen weeks’ notice of the date that they will be commencing paternity leave i.e. the expected date of birth. As with maternity leave, the employer is free to offer greater contractual paternity rights if they wish.
During SSL, the employee may receive statutory paternity pay (SPP) if they have the requisite twenty six weeks’ of continuous service (see above), they have given twenty eight days’ notice by way of a statutory declaration of eligibility and their average weekly earnings are equal to or above the lower earnings limit for National Insurance contributions (currently £97). The rate of SPP is the lower of 90% of their average weekly earnings or the statutory limit (currently £124.88).
In addition to the above rights, for births expected on or after 3 April 2011, an employee can take additional paternity leave of up to twenty six weeks to care for a child after the other partner has returned to work. This must be taken between twenty weeks or more following the birth and fifty two weeks’ after the start of the mother’s maternity leave. They will be entitled to SPP during this period, provided the conditions for this are met (see above).
Maternity and paternity rights on adoption
The above rights also apply on the adoption of a child, with some amendments. The period of SAL is the same as that for SML. Joint adopters can choose which of them takes statutory adoption leave (SAL) and which takes SPL. Additional conditions are that they have been matched with a child and agreed a date for the placement, have continuous employment of twenty six weeks’ ending at the beginning of the week that they are matched with a child and have given notice within seven days’ of being informed of the date of placement. For overseas adoption, official notification must be provided. SAL can commence on the sate of placement or up to fourteen days’ prior to this. Statutory Adoption Pay (SAP) is payable for the first thirty nine weeks of SAL at the same rate as SMP.
Employees who have parental responsibility for children under five, disabled children under eighteen or children adopted within the past five years who are under eighteen, may take up to thirteen weeks’ of unpaid parental leave per child to look after their children. This is extended to eighteen weeks’ for children who receive disability living allowance. For part time workers, one week is equal to their normal weekly working hours. The employee must have one year’s continuous employment with the employer in question to qualify and the maximum period will not begin again if the employee changes employers. They must give twenty-one day’s notice of their intention to take the leave. Another requirement is that the leave must be taken in blocks of no loner than one week and that no more than four week’s leave can be taken in any one year. The employer is entitled to request evidence of parental responsibility, age of children and disability if relevant. The employee’s contract of employment will continue during parental leave. Their statutory benefits must not be affected but the continuance of other contractual benefits will depend on the employer’s terms.
Time off for Dependants
Employees have a statutory right to take a reasonable period of unpaid leave for emergencies involving their dependants. Dependants are anyone who relies on the employee for their care. The length of leave that is reasonable will depend on the circumstances.
Working Time Regulations 1998
These Regulations set out the maximum working hours that an employee or worker can work per week. They apply to part-time, casual, shift, freelance and agency workers. The Regulations impose a maximum average limit of forty eight hours per week that an employer/worker who is over eighteen can be obliged to work. For employees/workers who are under eighteen, the limit is forty hours’ a week and no more than eight hours’ per day. Employers are permitted to request that certain employees/workers who are over eighteen agree to contract out of the forty eight hour maximum limit, although they cannot impose such a requirement. This is not possible for transport workers. The average hours are calculated over a seventeen week period, although this can be extended to up to fifty two weeks, with the employee/worker’s consent if they are over eighteen. Training, work-related travel and networking/lunches etc are included in calculating working time.
As well as regulating maximum working hours, the Regulations also stipulate the minimum rest periods and holiday entitlement that employees/workers must be given.
Workers who are eighteen or over, must be given:
• 5.6 weeks’ annual holiday;
• a twenty minutes’ break for every six hours’ worked;
• at least one day off after every consecutive period of six day’s worked or two day’s off following every twelve days’ worked;
• Eleven hours’ off between each day worked.
Workers who are sixteen or seventeen must be given:
• 5.6 weeks’ annual holiday;
• Thirty minutes’ break for every four and a half hours’ worked;
• Two days’ off every week and twelve hours’ off between each day worked.
Annual Leave Policy
We have mentioned above the annual entitlement of annual leave that workers/employees are entitled to under the Working Time Regulations. This is apportioned pro-rata for part-time workers so that if they are over eighteen and only work two and a half days per week, they will be entitled to fourteen days’ annual leave per year. For casual or irregular workers, the entitlement can be calculated on an hourly or percentage basis. The minimum period include bank holidays but the leave does not have to be taken on the bank holiday’s themselves if the employer states otherwise. Alternatively, the employer can agree that workers are entitled to bank holidays off in addition to their annual leave entitlement.
Workers must be paid at their average annual pay rate for the statutory minimum annual leave period. If the employer offers further leave, they can determine the rate of pay for this themselves.
It is now illegal for an employer to pay ‘rolled up holiday pay’. This is where the employer includes any holiday pay within the normal hourly rate of pay rather than paying holiday day when annual leave is taken. If a worker does not take his/her annual leave, they must be given pay in lieu, at the same rate as the holiday pay. This will apply when a worker leaves and has not taken all their annual leave entitlement. Their holiday pay will be apportioned pro rata for the amount of leave that they have taken in the year of leaving so that they will either be given a payment in lieu for days’ not taken or a deduction from their final salary payment for days’ taken in excess of their entitlement (to which they will need to agree).
At present, there is no requirement for employers to offer a work-based pension scheme, although there will be from 2012 onwards. There are tax benefits to the employer who offers a work related pension scheme so it can be an economical choice of employee benefit. For employees who do not have access to or do not qualify for an occupation pension, the state operates a basic state pension.
An employer may choose to offer private health insurance and/or life insurance as an employee benefit. It is often possible to obtain group insurance to cover all employees. Financial advice should be obtained before choosing an insurance product.
Other benefits could include company cars, mobile telephones, season tickets, accommodation, meals, child care vouchers. None of these will count towards the National Minimum Wage apart from living accommodation. If the employer deducts the cost of such accommodation from the employee’s/worker’s wages, any such amount deducted over a specified limit (the ‘accommodation offset’) will be deducted from the worker’s pay for the purposes of the NMW. So if the worker is paid the NMW, they will only be deemed not to be paid so if they are charged in excess of the accommodation offset for any accommodation benefits. The amount of the offset is currently £4.51 per twenty four hours’ of accommodation provided, up to a maximum of £31.57 per week. If the accommodation benefits are provided for free, the amount of accommodation offset is deemed to have been paid to the worker for the purposes of the NMW.
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