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In our law library we provide the legal basics about employment and commercial issues in the workplace. The summaries will help you better understand your position. However before acting, or deciding not to act, you are advised to consult a legal specialist. If you are trading then you may also like to consult our business page. Employees, workers and freelancers can find further information in our dedicated section for individuals.’

Breach of contract is when a binding agreement is not honoured by one or more of the parties to the agreement.

Minor breaches of contract can be remedied and if the parties are in agreement then the contract will continue.

If the breach is severe then the relationship between the parties is irreparably damaged and the contract can be terminated; this is called a repudiatory breach. the party that suffers the loss may be able to claim compensation.

Some particulars will depend on whether the breach has an employment context or is in a commercial setting.

For other legal topics return to the law library.

Breaches in a commercial setting

Parties enter into commercial contracts for the provision of services and/or goods in return for payment. If one of the parties fails to honour a term of the agreement then they will be in breach of contract. A breach may occur if the service is defective or if there is a failure to deliver services […]

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Breaches in the employment context

An employment contract is generally set out in writing, however a contract will exist even if it is not documented. Employers are sometimes keen to change the terms under which their employees work, whether that’s a change in pay and benefits or a change in the nature and place of work. Making a change to […]

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In an employment situation a constructive dismissal arises in circumstances where there has been a fundamental breach (or repudiatory breach) of contract by the employer. The employee can leave their job on account of this behaviour and their resignation is treated by the courts as an actual dismissal by the employer.

A fundamental breach may occur when the employer:

  • reduces salary or other contractual benefits without the employee’s consent,
  • changes the nature of the job without consulting with employee,
  • transfers employees to alternative work locations with no contractual right or consent, or
  • humiliates staff in particular in front of other employees

To progress claims in the employment tribunal the ex-employee has to prove:

  1. that the employer committed a breach of an express or implied term of the contract of employment;
  2. the breach was sufficiently serious to justify the employee’s resigning in response to it, and that the employee did, in fact, resign in response to the breach (to be ‘sufficiently serious’ the breach has to be a fundamental breach which goes to the root of the employment contract); and
  3. the employee did not “affirm” (accept) the contract after the breach had taken place, for example by leaving it too long before resigning.

If the employee can prove there was a constructive dismissal, they may have claims of unfair dismissal and wrongful dismissal.

Contact us to discuss constructive dismissal.

A contract is a legally binding arrangement between two or more parties. Agreement is reached when an offer from one party is accepted by the other party or parties.

An oral contract is a good contract at law, although evidencing the terms in writing is generally more satisfactory. Written contracts are required for certain transactions such as property purchase.

Particular contractual concepts apply to employment contracts as distinct from commercial contracts.

For other legal topics return to the law library.

Commercial contracts

Arrangements to provide goods and services are the very essence of enterprise. Most businesses operate through a breadth and variety of trading arrangements. If the parties to an arrangement have failed to document their relationship it is possible that disputes may arise, and where a dispute does arise evidencing the terms of the arrangement can […]

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Employment contracts

A contract of employment comes into existence once an employer puts an offer of work to an applicant and the offer is accepted. The contract that a director will enter into is referred to as a service agreement. Where shares or options are provided to the director the service agreement operates in conjunction with the […]

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There are times when concerns arise in the workplace.

A business may need to address conduct and performance issues to its employees. On the other hand employees may need to raise their concerns, and the employer should provide the requisite procedure to facilitate that discussion.

The respective dispute resolution procedures are the disciplinary procedure and the grievance procedure.

The employer is obliged to provide details of both sets of rules in the written statement of particulars provided to each employee when they start work.

We assist both employees and employers with disciplinary and grievance. Call us for a Free Chat: 020 3878 8700

Disciplinary procedure

There are two situations where a business may need to address its employees about concerns in the workplace. These have to do with: poor conduct; and poor performance The ACAS Code of Practice on disciplinary and grievance procedures (the ACAS Code) sets out how the employer should handle a disciplinary situation. Businesses usually have their […]

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Grievance procedure

The Advisory, Conciliation and Arbitration Service (ACAS) provide in their Code of Practice the procedure that employers and employees should follow when an employee needs to raise a concern. The employer will usually have a written grievance procedure which mirrors the ACAS Code, and this will be set out in the: employment contract; written statement […]

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Policies and good practice

Anti-discrimination legislation applies to organisations in all sectors and irrespective of their size. Businesses must not discriminate against their employees, workers, self-employed contractors and agency workers. The business will be liable for the actions of those working for it and will have to pay any award of damages that the employment tribunal makes.

A prudent business will put in place checks and measures to ensure its workforce behaves appropriately.

An equal opportunities and diversity policy will have no effect if it remains an academic instrument. The business should distribute it to all staff and convene discussion groups and run training to explain the nuances of the legislation. As well as creating a fair workplace, such policies and training exercises can evidence that the business has taken all reasonable steps to eliminate discriminatory behaviour from the workplace and will promote the organisation’s defence in the event of a discrimination claim.

Where a discrimination arises

The legislation is engaged at an early stage of the work relationship, so that an organisation may be liable if it discriminates in the way in which it conducts a job recruitment process for instance.

The grounds on which discrimination will be deemed unlawful are called ‘protected characteristics’ and they are:

  • age
  • disability
  • gender reassignment
  • marriage and civil partnership
  • pregnancy and maternity
  • race
  • religion or belief
  • sex
  • sexual orientation

Unlawful discrimination can take various forms, for instance an employer may be liable for:

  • direct discrimination
  • associative discrimination
  • perceptive discrimination
  • indirect discrimination
  • disability discrimination
  • a failure to make reasonable adjustments
  • victimisation
  • harassment

Associative discrimination

An employer must not treat a person less favourably because it thinks, incorrectly, that the employee has a ‘protected characteristic‘. This is a type of direct discrimination. For example, in the situation where an employer does not offer a vacancy to the most suitable candidate because in interview they take the view incorrectly that the […]

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Direct discrimination

An organisation must not treat one person less favourably than another because of a protected characteristic. For example, if an employer decides not to promote the most suitable candidate to the next management tier because it prefers not to have any more female staff at that level, then this is direct discrimination because of sex. […]

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Disability discrimination

An employer must not treat a disabled person unfavourably because of something connected to their disability, unless the employer can show that their action is objectively justified. There is no unlawfulness if the employer does not know or could not reasonably have been expected to know that the person is disabled. Protection is also afforded in […]

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Harassment

An employer must not harass a person. Behaviour will amount to harassment when it is: unwanted behaviour related to the protected characteristics sexual harassment less favourable treatment because of submission to or rejection of previous sex or gender reassignment harassment An employer may also be responsible for harassment of its staff by a third party […]

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Indirect discrimination

An employer must not exercise a provision, criterion or practice (for example making a decision or applying a workplace rule) in relation to a person, which has a worse impact on them and others who share that particular ‘protected characteristic‘, than on people who do not have that characteristic, unless the employer can show that […]

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Perceptive discrimination

An employer must not treat a person less favourably because it thinks, incorrectly, that the employee has a ‘protected characteristic‘. This is a type of direct discrimination. For example, in the situation where an employer does not offer a vacancy to the most suitable candidate because in interview they take the view incorrectly that the […]

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Reasonable adjustments

Reasonable adjustments relate to disability discrimination. If the way in which the employer goes about doing things, or if there are physical features in the work environment that put a disabled person at a substantial disadvantage in comparison with people who are not disabled, then the employer must take such steps as it is reasonable […]

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Victimisation

An employer must not treat a person less favourably because the person complains of discrimination (whether that’s bringing a legal case or just making an allegation of discrimination), or because they have upheld their equality law rights. For example, if the employer creates an oppressive environment for a person (for instance acting negatively) because they […]

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The question of an individual’s work status is far from straightforward. The matter is decided by considering the nature of the engagement between the individual and the party who engages them.

It is not sufficient for the contracting parties to describe the relationship in their own terms; rather, the authorities (HMRC and the courts) will look at the reality of the situation and ‘test’ the relationship considering all the relevant factors.

The onus is on the party who engages the individual to determine the work status. Issues to do with tax and national insurance contributions flow from this as do the rights of the individual, and the obligations of the party engaging them.

The law refers to the below types of worker:

Agency workers

These are individuals who enter into a contract with an ‘agency’ to undertake work for the agency’s client. The worker provides services to the agency’s client and works under the control of the client. It is very unlikely that the law will find that the individual is either an employee of the agent, because no […]

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Employees

Employees comprise the largest group of individuals working in the UK. They work under an employment contract, which is also called a contract of service. Both employer and employee will have terms implied into the employment contract. Employees have wider responsibilities towards their employer. They enjoy a broad range of employment protection rights, for instance […]

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Office holders

An office is a permanent position which exists independently of the person who fills it. It exists as part of a wider constitution of rights and responsibilities and many offices have some degree of public relevance. An example of a public office holder is a police constable. Company directors are office holders because their powers […]

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Partners

A partnership (or firm) consists of two or more partners. An agreement is inferred at law, however in practice many partnerships have a written partnership agreement detailing the relationship. All partners are entitled to share in the capital and profits of the partnership and to contribute towards any losses equally, unless otherwise agreed. Other types […]

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Self-employed

Where an individual works for themselves they will derive little protection from employment legislation. They operate in business for themselves, trading with a number of clients. A self-employed person in business has control over the delivery of their goods and services, with the opportunity to profit from their activities. They have to bear the financial […]

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Workers

Workers comprise the widest group and they include employees. They perform the work personally and are not able to send substitute workers in their place. A worker’s rights are less extensive as compared to an employee’s rights. Some of the rights of a worker include National Minimum Wage, statutory paid holiday, 48 hour working week, […]

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Employer and employee have to serve notice of termination of employment if they want to close the relationship. Notice provisions are found in the employment contract.

If there is no written contract of employment then the employee will be entitled to statutory notice of termination, and if the employee resigns they will have to provide a reasonable period of notice according to their seniority and length of service.

Employers have to give regard to issues other than contractual notice when terminating employees. If they fail to progress a fair dismissal process the employee may have a statutory claim of unfair dismissal.

Alternatives to working notice

Providing the business has reserved the right to do so in the employment contract, then it may request that the employee serves out all or part of the notice period from home – this is called garden leave.

The employment contract may also give the employer a discretion to terminate employment immediately and to pay the employee in lieu of the notice period. If the employment contract does not have a payment in lieu of notice clause, then an immediate termination by the employer will undermine any post termination restrictions.

Failure to pay notice

An employer’s failure to pay notice is a breach of contract, also known as wrongful dismissal.

Negotiated exits

Depending on the circumstance some employers offer an enhanced termination package when they dismiss an employee. It is usual for the employer to request that both parties sign a settlement agreement to record the settlement and to protect the employer from future claims by the individual.

Contact us on 020 3878 8700 for a Free Chat if you have been terminated (with or without notice).

Redundancy is one of the ways in which an employer may lawfully terminate an employee’s employment contract . Very specifically it has to do with the employer’s need to reduce the workforce; therefore a genuine redundancy will arise when:

  • the need to perform work has diminished partially or totally
  • business costs need to be cut through reduction in employee numbers
  • the business is moving premises or closing

Termination of employment (also called dismissal) is lawful providing the employer progresses a fair redundancy process.

A satisfactory redundancy process will include conducting a meaningful consultation. If the employer anticipates making less than 20 employees redundant in one place of work, consultation will be with individual employees. The consultation will consider ways to avoid termination, such as the opportunity for an employee to take up suitable alternative work elsewhere within the organisation. If the employer anticipates making 20 or more employees redundant in one place of work within a 90 day period, a collective consultation will take place with employee representatives.

To determine which employees are to be made redundant, employers should make their selection using a fair and objective scoring system.

Employees with two years’ continuous employment at the date of termination of employment are entitled to statutory redundancy pay. The amount depends on the individual’s age, length of service and salary.

If the employer handles this process incorrectly it will be vulnerable to claims of unfair dismissal. Employers seeking to minimise the risk of litigation will consider the benefits of offering a compensation payment that exceeds the redundancy payment, providing the parties enter into a settlement agreement. In the settlement agreement employees waive their rights to make any further claims against the employer. Our specialist Aeon Settlement Agreements site deals with the offer of settlement on termination of employment on redundancy grounds

Contact us now on 020 3878 8700 to discuss redundancy procedures and terminations.

Businesses often want their recruits to give their agreement to behave in a circumspect way if and when their employment relationship closes. The employer will incorporate these post-termination restrictive covenants either in the employment contract or in a separate deed.

The basic legal position is that restrictive covenants are in restraint of trade and consequently are void as being contrary to public policy. However if an employer can show that it has a legitimate business interest to protect, and the scope of the restrictions are no more than is reasonable to protect those legitimate business interests then a restrictive covenant will be enforceable.

The following types of covenant exist:

non-solicitation covenants – which seek to prevent the ex-employee from soliciting the custom of those of the employer’s clients and suppliers with whom the ex-employee worked. Solicitation requires an element of persuasion or advertising by the ex-employee. Non-solicitation covenants apply for a set period of time following termination.

non-dealing covenants – which attempt to prohibit the ex-employee from dealing with those of the employer’s clients and suppliers with whom the ex-employee worked. Non-dealing covenants operate irrespective of whether the ex-employee or a client or supplier initiates the approach (therefore they are broader than non-solicitation covenants). They apply for a set period of time following termination.

non-competition covenants – which seek to prohibit the ex-employee from engaging in competitive activity. Non-competition covenants apply for a set period of time following termination, within a specific geographical area.

non-poaching of employees – these covenants seek to prevent the ex-employee offering work to former colleagues. They apply for a set period of time following termination.

Read how restrictive covenants impact both employers and employees.

Restrictive covenants – employees’ position

Individuals should be able to make a living by working in the sector in which they have developed a skill set and are experienced. Non-competition covenants are particularly onerous and are much less likely to be enforced against an ex-employee, as compared to non-dealing and non-solicitation covenants. It is best for employees to address restrictive […]

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Restrictive covenants – employers’ considerations

A business has to consider its requirements before recruiting new personnel. The restrictive covenants have to be drafted carefully if the business wishes to rely on them. In relation to onerous non-competition covenants, one way to maximize enforceability is by reference to a geographical area around the business, or by reference to specific competitive businesses. […]

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A settlement agreement is a contract between employer and employee (or ex-employee) governing the arrangement reached between them when the employee has an employment claim. Employers may make an offer of settlement where:

  • there is a dispute at work,
  • there has been a termination of the employment contract due to redundancy or reorganisation, or
  • the employee is already progressing a claim in the employment tribunal.

The employer will usually offer a compensation payment (also referred to as severance payment or termination payment) in return for the employee’s undertaking to not to pursue their claim in the employment tribunal. The settlement agreement may or may not deal with a payment in lieu of notice of termination.

Employers need to make sure their employee takes advice about the settlement agreement from a relevant independent adviser (a solicitor for instance) – they usually make a contribution towards legal costs.

Both parties may find a negotiated settlement useful. If the correct formalities are fulfilled, the employee will be precluded from pursuing employment claims. In this way the employer knows that it is protected from future action, and any adverse publicity that may create.

The employee will receive a financial sum without recourse to the courts and they are then released from work and are able to move on with their lives.

More information about settlement agreements is available on our dedicated Settlement Agreements site. Or Call us on 020 3878 8700 for a Free Chat to discuss (i) settlement agreement drafting, if you are a business or (ii) the terms of a settlement agreement your employer has given to you, if you are an employee.

Settlement agreements

For comprehensive information on settlement proposals, severance payments and taxation, visit our settlement agreements website

Visit our settlement agreement website

Employees with one year’s continuous employment are protected from being dismissed unfairly.

Employers can dismiss employees lawfully if the employer:

  • has a fair reason for dismissal, and
  • follows a fair procedure

Fair reasons for dismissal are:

  • misconduct
  • incapacity (including (i) poor performance and (ii) illness)
  • redundancy
  • retirement
  • some other substantial reason (such as reorganisation)
  • a statutory restriction

If an employer has one of these fair reasons, it is then obliged to conduct a fair dismissal procedure. For dismissal for poor conduct and poor performance the ACAS Code of Practice is relevant.

In a number of situations a dismissal will be automatically unfair. For example, where the employer’s reason for terminating has to do with:

  • taking action on health and safety grounds
  • discrimination because of race, sex, disability, religion or belief, sexual orientation or age
  • pregnancy or any other reason connected with the pregnancy
  • membership (or non-membership) of a trade union and for trade union activities
  • making a protected disclosure (whistleblowing)
  • the transfer of a business or service to another employer under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE)

An employer that is at risk of an unfair dismissal claim may decide to offer the employee a compensation payment rather than face the prospect of going to the employment tribunal. The employer will safeguard its position by ensuring that both parties enter into a settlement agreement detailing the employee’s agreement to waive the unfair dismissal claim.

Contact us if you would like to discuss termination of employment and unfair dismissal or visit our specialist settlement agreements site.

An employee’s claim of wrongful dismissal has to do with breach of contract. It arises when the employer fails to provide the employee with the correct period of notice of termination of employment, or when the employer has provided no notice at all. The amount of notice due is governed by the written employment contract or statutory notice provisions.

An employee’s claim for wrongful dismissal will give rise to damages for the balance of notice due.

If the employer dismisses in breach of contract it cannot then rely on the terms of that same contract, and so it will lose the opportunity to enforce any post termination restrictions.

In limited circumstances an employer is entitled to terminate without notice where there is a finding of gross misconduct. A failure to follow a fair dismissal procedure will lead to a claim of unfair dismissal against the employer.

Contact us to discuss wrongful dismissal.

How we can help you

We will take your instruction so as to understand the facts underpinning the issue. We will then explain the law that is relevant to the matter and present the options available to you.

With specialist experience in a wide range of employment law matters, we offer immediate assistance at competitive rates.

Contact Aeon Solicitors for an informal discussion. Our telephone number is 020 3878 8700

The firm is conveniently situated in central London

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Law Library

In our law library we provide the legal basics about employment and commercial issues in the workplace. The summaries will help you better understand your position.

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