EMPLOYMENT LAW EXPLAINED

INTRODUCTION TO EMPLOYMENT LAW

The purpose of this website is to enable people to gain an insight into the law of employment. You do not need to have any knowledge of the law in order to understand and make use of the following headings. However, if you do have such knowledge, the information in this website may enable you to extend your expertise into a practical and profitable area of the law.

There are two important concepts to remember about modern UK employment law:

* statutory provisions take priority over common law terms and conditions in

contracts of employment. This means that whatever may be expressly or

impliedly agreed between parties to contracts of employment, the terms and

conditions must conform to the requirements of statutory law. Therefore,

parties to a contract of employment cannot agree a contract that purports to

limit the operation of any provision of the Act: s.203, Employment Rights Act

1996. For example, an employee cannot agree to work for less than the

National Minimum Wage or an employer cannot demand that an employee

must agree to take less holiday leave than that to which he or she is statutorily

entitled;

* the fairness of employment provisions, 'unfair dismissal,' are provisions which

come under statute law and, that being so, are governed by the concept of

'reasonableness' and not the strict rules of the common law. For example, a

contract of employment may state that the employer will dismiss an employee

after giving the employee three disciplinary warnings. But, if an employer dismissed

an employee for that reason, the employer would need to show that it had acted

reasonably by so doing and could not rely just on the expressly stated common law

term or condition of the contract. Similarly, an employee could not object to a

unilateral variation of the common law terms and conditions of the contract by

the employer if the employer could show that it acted reasonably by varying

the contract.

To understand employment law, you need to know its place in the legal system. The United Kingdom and a number of other Commonwealth countries as well as the United States of America (except Louisiana), have a Common Law system. There are two streams of law in the Common Law system: common law and statute law. These two streams of law run together but, in the event of a conflict, statute law takes priority over common law.

Under the Common law system, the body of law known as the 'common law' has been developed through the centuries by judges making case-law decisions based on legal customs, practices and previous decisions. Over time, the harshness of common law was and still is moderated by the rules of equity.

The other body of law is 'statute law' that has come into being as a result of majority decisions by parliament. The devise of the Queen in Parliament is then used to formally enact these decisions into law.

In addition, the law of the European Union - after it has been transposed into UK law by Parliament - is also statute law. Because the United Kingdom is a Member State of the European Union, EU law takes precedence over the domestic law of the UK: s.2(1) European Communities Act 1972. It is this combined body of statute law that is paramount over the common law and, since the law of employment has its origins in common law, over employment law as well.

Thus, it would be a serious mistake to believe that the terms and conditions in a contract of employment - which are based on the common law of contract - take precedence over the provisions of statute law, for they do not. Indeed, it is not possible to contract out of statutory employment provisions: s.203, Employment Rights Act 1996. In addition, it is most important to be aware that the concept of 'reasonableness' is the essential key to unlock and interpret the fairness of employment provisions of current statutory employment legislation.

Those new to employment law often find it difficult to understand the concept of 'reasonableness' or, indeed, what the word 'reasonable' actually means in law or fact. It is important to know what 'reasonable' means because this word and its meaning have to be addressed whenever a decision needs to be taken to decide the merits of an employment law dispute.

Many people think that the word 'reasonable' is so vague and subjective that it could mean almost anything to anybody. But, far from being an elastic word that can be stretched to cover a whole range of different opinions, the word is narrowly defined. The root of reasonableness is 'reasonable.' In turn the root of 'reasonable' is 'reason.' An analysis of the word 'reason' reveals that it means that which is 'rational.' Therefore, 'reasonableness' and 'reasonable' means conduct and actions which are rational. That is to say, 'rationality' is a state of mind in which thoughts and conduct flowing from those thoughts are devoid of emotions such as anger, spite, prejudice and so on.

This, then, is the essential criterion upon which employment law is based: rational behaviour by employees and employers. When arriving at decisions, an employment tribunal will simply ask itself the question: has the employer or employee acted rationally? Not: has the employer or employee broken the terms and conditions of the contract? If the answer to the first question is 'yes,' then either the employer or employee has acted reasonably. Unless a tribunal is deciding a case of constructive dismissal, that is still governed by the common law and which requires that a fundamental breach of contract be shown, it need not give a substantive answer to the alternative question at all. But the tribunal will or should say whether either party has broken any statutory provision. In Pantry v The Home Office (2004) (EAT) Case No.UKEAT/0083/04, McMullen J. said at paragraph 20(2):

'A Tribunal will not do its duty if it does not set out the applicable law and set out its reasons by reference to the applicable law. If its reasons do not tell the parties clearly why they have won or lost, or fail to deal with an issue which was relevant before it, the Tribunal will err; see Meek v City of Birmingham District Council (1987) IRLR 250.'

In the context of employment law, the term 'fair' also means 'reasonable.' Likewise, the term 'unfair' means 'unreasonable.' The important point here is that the concept of 'reasonableness,' when determining the fairness of a dismissal, overrides common law contractual terms and conditions in the contract of employment (except for constructive dismissal), whether they are expressed in writing on the face of the contract or implied from decisions of courts or tribunals.

04 JANUARY 2006

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