Under section 1 of the Employment Rights Act 1996, employers have 2 months in which to provide their employees with a written statement of the terms of their employment (often referred to as a section one statement, strangely). However, a recent case in the EAT has confirmed that an employee actually has the right to a statement of their employment terms, even when they’ve been employed for less than 2 months.
This was a group claim brought by Stefanko and others against Maritime Hotel Ltd. The Claimants were all waiters and waitresses and had short periods of service. In particular, one of the Claimants had only been employed for 6 weeks. She successfully brought a claim for automatic unfair dismissal (for asserting a statutory right) and she also complained that the company failed to provide either a payslip or a section one statement.
Whilst the Employment Tribunal in the first instance followed the ‘2-month rule’ as set out in section one, the EAT reversed the decision and held that the waitress should have been given a statement of her employment particulars and so should be compensated for not receiving one.
The EAT referred to section 2 of the Employment Rights Act and said that employers must provide this statement to employees who have worked for them for a month or more, even if they leave before completing 2 months’ service.
The wording of the Employment Rights Act has not been changed. The EAT has merely highlighted a commonly overlooked component of the Act, which is seemingly designed to cover employees who are likely to have a low length of service.
Why does this matter?
It is important to point out that it is only employees who have the right to receive a written statement of their employment terms (not ‘workers’) and employees cannot currently bring a claim on its own just for failing to provide such a statement.
However, if the employee has brought a substantive claim against an employer (such as for unfair dismissal or discrimination) then the Tribunal can increase the financial award payable to the employee if a statement has not been provided to them. This increase can be the equivalent of between two and four weeks’ pay.
Best practice would be to send an employee a written statement prior to starting employment, so that it is signed on the day or even before they start employment. If this is not possible it’s certainly advisable to have a written statement prepared for their employee’s first day of employment. This will ensure that both parties are aware of the arrangements and their duties and obligations to one another. It will also assist employers in being able to rely upon terms in contracts which don’t immediately take effect, such as employee restrictions on leaving and any notice provisions the employer may wish to include.
In any event, from 6 April 2020, all workers (not just employees) will have the right to receive a written statement of the terms of their engagement from their very first day. If you haven’t done so already, contact our employment law team to discuss getting your contracts in order.