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Keeping In Contract

4th October 2018

By Andrew Knorpel, Partner and Head of the Employment team

At our Autumn Employment Update on Tuesday this week, we had an in-depth review of the content of contracts of employment. We covered all those standard terms which are required by law, together with those additional terms which should be included to protect your organisation.

Here are some of the issues which were raised in questions.

Don’t the Working Time Regulations require an employer to make a payment in lieu of holiday in respect of a payment in lieu of notice?

An employee is entitled to receive a payment in lieu of accrued holiday on the termination of employment. It must be based on “normal remuneration” and the statutory calculation refers to using the “proportion of the worker’s leave year which expired before the termination date”. Therefore, holiday accrues up to the termination date only and not through what would have been any notional notice period.

Some staff have a formal homeworking arrangement and other staff just work from home from time to time with their manager’s approval. Should the same terms and rules apply to them?

If you have a formal arrangement for a member of staff to work from home, you should document various requirements in their contract such as the need to attend the workplace from time to time (for meetings etc), their hours of work (including any core hours), relevant expenses to be claimed (such as communication and data charges) and the right to enter their premises (to install or recover company equipment). However, a homeworking policy would be equally applicable to those who work from home on an ad hoc basis and should include matters such as data security (in relation to both manual and electronic data) and health and safety.

Can you rely on a clause giving the employer the right to terminate employment in circumstances where this might deprive the employee of ongoing sick pay or rights under a permanent health insurance (PHI) scheme?

In the absence of such a clause, the courts and tribunals are likely to imply a term that the employer will not terminate employment in these circumstances and such a dismissal would therefore also be unfair. It may well also amount to disability discrimination. Merely having such a clause will not automatically remove these concerns. However, there may be good business reasons for terminating even though sick pay has not yet expired and this clause should reduce the risk of successful claims provided that you follow a fair procedure. Such a procedure might include, where any prospective termination would deprive an employee of rights under a PHI scheme, liaising with the insurer to see whether they will take on payments under the scheme directly. This could also be tied up under the terms of a settlement agreement.



The contents of this update are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this update. © Mundays LLP 2018.

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