A-Z of Employment Law Terms - Glossary

A-Z of Employment Law Terms


This is Government funded body which has a specific job of seeking to resolve employment disputes. If an employer or employee is involved in a dispute which is being determined by an Employment Tribunal contact will be made by ACAS. ACAS is also available to seek to resolve disputes before proceedings commence and from Spring 2014 will have a specific function of trying to resolve employment disputes before employees are entitled to go to Tribunal.
Agency Workers

Agency workers have agreements, which may be contracts of employment or otherwise with an organisation other than the one for whom they are carrying out work. Employers often use agency workers when there are fluctuations in demand or short-term problems. European law means that agency workers now have considerable rights and if they work at a business for 12 weeks or more, they are entitled to pay on the same basis as others doing similar work where they are working. Often individuals sign up to agencies if they like the flexibility of working for a number of different employers. In practice, they may well receive higher rates of pay because employers are prepared to pay a little more to have the flexibility of using them as and when needed and sometimes they can gain tax advantages by being supplied through agencies.

Associative Discrimination

This occurs when someone doesn't have the "protected characteristic" but is treated less favourably because of his or her association with someone who has got that characteristic. For example if someone is treated badly because they are the carer of a disabled person then that can amount to discrimination.


This is the person bringing a claim in the Employment Tribunal. He/She does so by lodging with the Employment Tribunal within the relevant time limits a claim form known as an ET1.

Collective Agreements

Sometimes where a significant part of the workforce are members of a Union, the Union will negotiate employment terms either with the employer or with organisations representing employers. The Agreements reached are called "Collective Agreements" and the terms in them can apply to individual employment contracts.

Constructive Dismissal

Sometimes when an employer has behaved towards an employee in major breach of its contractual obligations towards an employee, the employee can resign and claim that he or she did so in response to the actions of the employer. In such circumstances this can still be regarded as a dismissal and is known as a constructive dismissal. Such a dismissal can be but it not always an unfair dismissal.

Data Protection

In 1998 the Data Protection Act set out for the first time a specific set of obligations that employers have in relation to the storage and use of personal information held about individuals. It also gave individuals the right to know what information is being held about them.
There is an Employment Practice Data Protection Code which sets out good practice and data protection issues are overseen by the Information Commissioner.
The Data Protection Act covers what is known as personal data and also sensitive data. Personal data relates to information such as salary details, sickness and attendance records, records about next of kin, annual assessments and also any recorded opinions about an employee and any indication of intentions of employers towards that person.
Sensitive data is basically what is says, which is potentially very sensitive information about individuals which might include for example their racial or ethnic origin, political opinions, religious or other beliefs, details of trade union membership, physical or mental health, sex life or details of alleged criminal behaviour.
To be covered the information has to be retained in some sort of way which allows the individual to be identified.
In short employers must use and process personal and sensitive data responsibly. This means that they should only do so where they need to, the information should be adequate, relevant and not excessive. It should also be accurate and not kept longer than necessary. It should be kept secure and confidential.

Direct Discrimination

This is the most straightforward form of discrimination to understand. This relates to a person being treated less favourably than he or she would have been treated but for his or her "protected characteristic". For example if a person was black and didn't get promotion but would have done had he or she been white this would amount to direct discrimination.

Disability Discrimination

In relation to disability employers have far wider obligations. Employers also have a duty to make reasonable adjustments when disabled employees are put at a substantial disadvantage to non-disabled persons in undertaking their work.
Discrimination – See Equality Act


This has been defined as a worker who works under a contract of employment. It is necessary to be an employee to claim unfair dismissal. What constitutes an employee as opposed to a worker can be legally complex and is factually driven, but a key factor is whether the employer is obliged to provide the person with work and whether the person is legally obliged to perform the work.

Employment Contracts

A contract could be described as an agreement giving rise to obligations which are enforced or recognised by law.
There needs to be a commitment by two or more individuals or organisations. Those who sign up to a Contract are known as "parties" to the Contract.
There needs to be what is known as "consideration". This means that there is a commitment by each party to do (or potentially not to do) something which is of benefit to the other party. For example if you went into a supermarket and bought a bag of apples for £1.50 your commitment would be to pay the money but the benefit would be to gain the apples. The supermarket's commitment would be to provide the apples and the benefit would be to get the money. Similarly in an employment relationship an employer commits to make various payments and provide benefits and the employee agrees to provide his or her labour in return for the pay and benefits.

It is not necessary for an agreement to be put in writing for there to be a Contract although it clearly helps if agreed terms are written down.
Terms can be "express" terms or "implied" terms. "Express" terms are those which are specifically agreed between the parties, often in writing. "Implied" terms are terms which have not been specifically agreed. However, it is clear that had the parties discussed them they would have agreed this was part of the Contract. With Employment Contracts terms can often be implied by custom and practice. For example if the Contract of Employment doesn't say anything about it, but employees have always been given paid holiday between Christmas and the New Year this is likely to be a term implied by custom and practice.

Employment Tribunal

Employers are entitled to bring claims for most employment disputes to Employment Tribunals. These are located in major cities across the country.
Charges have recently been introduced for bringing Tribunal claims, although they are means tested and those without a job will often be able to bring a claim without paying. Tribunal proceedings are still quite formal, but less so than proceedings through a County Court.

Equal Pay

Equal pay legislation was introduced in the Equal Pay Act 1970. It was introduced as a response to female workers striking at the Ford Motor Company at Dagenham. This was immortalised in the film "Made in Dagenham". The provisions of the Equal Pay Act have led to a significant number of claims being lodged and settled, particularly in local Government. The provisions of the Equal Pay Act have been less successful in enhancing the pay of women in managerial positions where it is perceived that gross inequalities still exist between the pay made to mal as opposed to female employees. In 2010, the Equality Act was amended to introduce a code of practice known as the Equal Pay Code. The 2010 Act abolished the ability of an employer to put in place secrecy clauses in peoples' contracts preventing them from disclosing to each other what they earn.

Equality Act

The law on discrimination is now contained within The Equality Act 2010. It is a breach of the Equality Act to discriminate based on someone's age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or religious belief, sex or sexual orientation. These are known as "protected characteristics".

Discrimination now covers a lot of different areas, but there are areas which it doesn't cover, for example size or hair colour.
It is important to understand that someone complaining of discrimination can bring a claim not only against his or her employer, but also against an individual who has discriminated. That individual can have a judgment against him or her in the same way and for the same amount as the employer. Also, the employer can be found to have discriminated even if it is in relation to actions of its employees even though it has not authorised the particular action.

Fixed Term Contracts

These may exist until a certain task has been achieved and then automatically finish once that task has been achieved. Alternatively, they may even last for a fixed period of time and automatically end once that period of time has finished.

Garden Leave

This is a term which is applied when notice has been given to terminate an employment contract but where the employer requires the employee to stay away from work (and have the ability to attend his or her garden – hence the term). The right to put an employee on garden leave may be set out in the employment contract and may include more detailed requirements, for example in relation to being available to work should the need arise.

Holiday Entitlements

The minimum entitlement for full-time employees is currently 28 days holiday, including Bank Holidays. Some employees are more generous than this. Areas such as calculation of holiday pay and inter-relationship of sickness and holiday pay are contentious and have been the subject of a lot of recent cases.

Indirect Discrimination

This occurs when an employer applies a policy or practice, which on the face of it doesn't discriminate but in fact puts a particular group of workers at a disadvantage.
Whilst there is no defence against direct discrimination it is possible for employers to defend indirect discrimination if it can be justified when balanced against the needs of the employer in the successful running of the business.
Often indirect discrimination claims are brought by women on the basis that due to child caring responsibilities they are likely to be less able to undertake various working arrangements than men. This might, for example, be in relation to a new requirement for everyone to vary their working hours or work overtime.

Lay Off/Short Time Working

Some businesses, particularly in the construction industry, will include a clause enabling them to require employees to stay at home with minimal pay or to provide much reduced work for much reduced pay for short periods whilst work is scare. Unless this paragraph is within the Employment Contract, employers will not normally be able to enforce this. The current rate of payment is £24.20 per day for five days in any three month period. After significant periods of lay off or short time working employees are entitled to leave and seek a redundancy payment provided they have two years' service.

Living Wage

This concept has been introduced recently. This is not compulsory although a fair number of employers are committed to paying it. It is based upon what an individual is believed to need to cover the basic costs of living. It is currently £8.55 per hour in London, and £7.45 per hour in the rest of the UK.

National Minimum Wage

This is the minimum hourly rate which an employer is required to pay an employee. At present the national minimum wage is as follows:-
Rate per hour
Standard adult rate (21+) £6.31
Development Rate (18-20 year olds) £5.03
Young workers' rate
(under 18 but above compulsory school leaving age) £3.72
Apprenticeship rate £2.68
Maximum deduction which can be made daily from National Minimum Wage to taking into account accommodation £4.91

For these purposes pay includes performance based bonuses or commission.


Increasingly, employers are becoming required to provide pensions on an "opt out" basis. This means that if an employee does not wish to benefit from the pension provided, he or she must say so. Previously, pensions have usually worked on an "opt in" basis. The scheme currently requires employers, depending upon the size of the business, to make pension contributions for those aged 22 or over earning more than £9,420 per year. The rules are not straightforward but provide initially for a minimum contribution by an employer and employee of 1% of "qualifying earnings" but rising to 3% by October 2018.

Perceptive Discrimination

Perceptive discrimination occurs when someone is treated less favourably because he or she is believed to have the "protected characteristic" even if that person doesn't have it. For example someone is called various derogatory names because they are believed to be homosexual when in fact they are not this can still amount to discrimination.

Probationary Period

Typically employees will have a trial period of between 3 and 6 months during which they will be kept under careful review and employers usually reserve the right to dismiss on very little notice if things are not working out.


There is a definition of redundancy in the Employment Rights Act 1996. This states that an employee is dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to:-
- the fact that his employer has ceased or intends to cease to carry on the business for which the employee was employed by him or in the place where the employee was so employed or;
- the fact that the requirements of that business for employees to carry out work of a particular kind or of a particular kind in the place where the employee was so employed have ceased or diminished or are expected to cease or diminish.
The first of these sections is relatively clear cut. If the business is closing down then it follows that the employees within it will be redundant. If employees are employed at a specific location and work stops at that location then dismissal will also be by way of redundancy. Quite often there are paragraphs in employee's Contracts which allow employers to move an employee between locations. In such cases the closure of one workplace may not amount to redundancy at all as an employee can simply be moved to another. This area is not straightforward though!
The second part of the definition applies much more frequently. This occurs when the business is continuing but may no longer need a person to carry out the type of work which the redundant employee was doing or needs fewer people to carry out that type of work then before.


This is normally the employer but in some circumstances, i.e. in discrimination case, it is possible to name given employees, usually managers, and bring claims against them in addition to the employer. Case law has determined that it is not possible for an Employment Tribunal to apportion damages between respective Respondents and damages therefore are awarded on what lawyers calls a joint and several basis. The form used to file a response is known as the ET3.

Restrictive Covenants

Some contracts of employment, usually involving more senior members of staff, contain restrictions on what an employee may be able to do in the event of a termination of employment. The law on this issue is complex but the basic legal principle is that the restrictions will only be upheld if they are shown to be reasonably necessary to protect the legitimate business interests of an employer. Whether they are or not depends on the facts of individual cases, employee's seniority, the nature of the work that they undertook, the geographical area where the restriction can apply, the duration of the covenant whether it effectively puts an end to that employee working in that industry or area of work for the duration of the covenant.

Short Time Working/Lay Off

Some businesses, particularly in the construction industry, will include a clause enabling them to require employees to stay at home with minimal pay or to provide much reduced work for much reduced pay for short periods whilst work is scare. Unless this paragraph is within the Employment Contract, employers will not normally be able to enforce this. The current rate of payment is £24.20 per day for five days in any three month period. After significant periods of lay off or short time working employees are entitled to leave and seek a redundancy payment provided they have two years' service.

Statement of Particulars of Employment

The minimum terms and conditions of an employee's Contract of Employment which must be put in writing and given to an employee within 2 months of the start of his/her employment. An employee who brings a claim in an Employment Tribunal in respect of any other matter, can tag on to that claim a claim for failure to provide a contract of employment, it does not form or constitute a claim in itself and the Tribunal can award up to 4 weeks' wages (currently capped at £450 per week) for the employer's failure to provide written terms and conditions of employment.

Statutory Sick Pay – SSP

This is the minimum sum which an employer is required to pay to a sick employee. Company sick pay schemes are often more generous. This currently applies to most employees at the rate of £86.70 per week for up to 28 weeks absence. However, it is not payable during the first 3 days of absence and the employer does not have to pay it if the employee does not comply with reporting arrangements.
Statutory Sick Pay does not apply at all to those employees whose average weekly earnings in the 8 weeks prior to sickness are less than the lower limit for National Insurance contributions, currently £109 per week.

Unfair Dismissal

This is all about the reason an employee is dismissed and the way in which it is done. An employer can give notice to terminate the employment in accordance with the Contract yet still have unfairly dismissed the employee.
In most cases employees now have to work for an employer for two years before they are entitled to bring a claim. There are though some exceptions when there is no qualifying period at all. This might happen for example if an employee is dismissed after whistleblowing, raising a concern about health and safety or claiming a right given by Parliament.
If an employee is dismissed and claims that he or she has been unfairly dismissed an employer can only successfully defend the claim if it can show that the dismissal was for one of 5 potentially fair reasons.
We will look at these reasons in more detail below, but they are:-
• Incapability
• Misconduct
• Redundancy
• Illegality
• Some other substantial reason

If the employer is able to show that one of these 5 reasons apply this isn't the end of the story. The Tribunal which hears the case has to decide whether the dismissal is fair in all of the circumstances.


This is a name of a case which set the banding for awards for injury to feelings for those that win discrimination cases. In less serious cases these awards are between £500 and £6,000. In more serious cases the figure will be over £6,000 and less than £18,000 and the most serious cases above £30,000.


This occurs when someone has previously made a complaint or assisted someone in making a complaint about discrimination and done so in good faith but is then treated badly because of making that complaint.

Working Time Regulations

These provide for maximum hours of work and minimum daily and weekly periods of rest and break periods as well as providing limits upon night-time working. Generally working time should not exceed an average of 48 hours per week which is averaged over a 17 week period. Where this limit is likely to be exceeded, employers can ask workers to agree to "opt out" of this time limit but cannot force employees to. Also, employees are entitled to opt back in upon giving notice, usually 3 months.
Night-time working should not exceed an average of 8 hours per day. An employer and employee can agree which hours are included as night-time, but this must include the period between midnight and 5:00am.
The normal rules allow workers at least 11 hours consecutive rest in a 24 hour period and in every two week period at least 2 24-hour uninterrupted periods of rest.
There are variations to all of these rules to deal with specific circumstances.
For younger workers, over compulsory school age but no older than 17, the limits are stricter. Those workers are not normally entitled to work more than 8 hours per day or 40 hours a week unless it is necessary to maintain continuity of service or production or as a response to a surge in demand, there is no adult available and training needs are not adversely affected.
Young workers are also prevented from working at night between 10:00pm and 6:00am (although this can sometimes be changed to between 11:00pm and 7:00am).
The daily rest period must be at least 12 consecutive hours in any 24 hour period with a minimum of 2 days rest per week. Sometimes the rest period can be reduced to 36 hours. Young workers are entitled to rest breaks of 30 minutes when daily working time is more than 4.5 hours whereas in adults there is an entitlement to a break of 20 minutes in any working day of more than 6 hours.

Workplace Mediation

This is a method of seeking to resolve disputes at work without the formality of a grievance or disciplinary process or Tribunal proceedings. It can be used alongside any of these formal methods. The mediator is a neutral person who will meet, probably on a one to one basis, with those involved in the dispute to gain an understanding of the dispute from their perspective. The mediator will then work with those involved in the dispute partly in one to one meetings and partly in joint meetings with a view to achieving solutions which everyone is prepared to buy into. Solutions are not imposed upon the participants. In practice this is a very effective way of resolving disputes and can often preserve working relationships when they are at breaking point.

Wrongful Dismissal

This simply means that an employee has been dismissed in breach of contract. This might for example mean that the employee has not been given notice to which he or she is entitled. A wrongful dismissal may or may not be a fair one!

Zero Hours Contracts

These have come in for a lot of criticism by trade unions in particular but when properly used can be useful to both employer and employee. Generally, where a zero hours contract is used, the employer and employee agree to the terms of contract which apply when an employee undertakes work. However, the employer doesn't guarantee to provide work and the employee doesn't guarantee to accept any offer of work. Those on a zero hours contract might work for several different employers and employers will often use them during busy periods.

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