Understanding the Employment Rights Act 1996

Covering some of the biggest and most impactful topics in UK employment law, the Employment Rights Act 1996 is a significant piece of legislation that provides clear laws employers must follow.

Understanding your legal rights and responsibilities could make the difference between staying legally compliant and winding up in an expensive employment tribunal.

In our employer’s guide we cover the essential points you need to know from the Employment Rights Act, so you can avoid legal disputes and hefty fines, whilst creating a safe and fair working environment for your employees.

What is covered by the Employment Rights Act?

The ERA has a profound impact on the rights and responsibilities of employers and employees in the UK. Covering an array of issues relating to the workplace, pay and employment contracts. Below we highlight some of the most significant topics:

Section 1 (2): The right to know key employment terms

One of the most important elements of the ERA is the requirement of employers to inform employees of their employment terms. Either in the form of a detailed employment contract, which is signed by both parties, or a 'written statement of particulars'.

This legislation requires employees to be informed of key aspects of their employment such as:

• Job title

• Place of employment

• Paid leave entitlements

• Details of disciplinary procedures

• Sick pay and terms of sickness

And more.

These important HR documents should be stored in an accessible location in which the employee can gain access to. For example, a secure digital document storage system.

Section 94: Unfair dismissal

Unfair dismissal is a key part of the Employment Rights Act. Preventing employers from dismissing employees without fair reason.

Under the act, there are no grounds for unfair dismissal, and firing someone for any of the following reasons is automatically considered unfair:

• Taking a type of protective leave such as maternity or paternity leave

• Requesting flexible working arrangements

• Whistleblowing

Currently the law only applies to employees who have worked for their employer for at least two years.

However, it is important to note that changes are incoming. With the new Employment Rights Bill introduced by the Labour Government, unfair dismissal will become a day one right for all employees.

This proposes a transformative change to employment law in the UK and is something that all employers must be aware of. While this is yet to come into force, getting up to date on the said proposed changes ensures your business Is ahead of the curve when it comes to keeping on the right side of the law.

More details on unfair dismissal can be found in our dedicated article.

Section 13: Deduction from wages

Under the Employment Rights Act an employer is not legally allowed to take deductions from an employee’s pay unless:

• The deductions are required by law such as tax, student loan payments etc.

• The employee has given written consent

• The deductions are included within the employee's employment contract.

From time to time you will find that deductions from wages are required. This may be due to an overpayment, pension contributions or contractual liability of company goods (for example, where a company asset has been damaged). The Employment Rights Act 1996 ensures that employers know when a wage deduction is acceptable and when they may be making an unlawful deduction.

In the case of unlawful wage deductions, you could find yourself dealing with a claim at an employment tribunal.

Section 135: Redundancy rights

When making an employee redundant, they may be entitled to a redundancy payment. Whether they are entitled to this pay and how much money the employee will receive depends on their length of service, type of employment, and the age of the employee at the time of redundancy.

Redundancies are only required to be made when an employee’s job role becomes obsolete or due to company closure. This can happen for several reasons but should not be considered as an alternative to dismissal. for more information about redundancy procedures read our article.

Protections for whistleblowers in the workplace

Since 1996, there have been several amendments to the original Employment Rights Act.

For example, The Public Interest Disclosure Act 1998 (PIDA) was introduced to protect those workers who come forward with information of wrongdoing within the workplace. This could include criminal offences, health and safety breaches or risks, risks to the environment, a breach of the law, etc.

As a result, whistleblowers disclosing information in the public interest cannot be disadvantaged in the workplace or lose their job as a direct result of making a disclosure.

Other amendments

Other updates have included changes to how payslips must be displayed and provided, and with each update to laws such as the National Minimum Wage or Statutory Sick Pay, the ERA is updated.

Failure to comply with the Employment Rights Act 1996

It’s important for all employers to comply with UK employment law, including the Employment Rights Act.

Failure to do so can result in large fines, reputational damage, and tribunal action. It is your responsibility to comply with the rules set out throughout the legislation and stay up to date with any amendments.

With the support of BrightHR, staying on top of your legal responsibilities as an employer doesn’t have to be complicated. With BrightAdvice, our team of employment law experts and HR specialists are available 24/7 to give you the best advice on current employment law and how to handle HR concerns.

Give the team a call today or book a free demo to discover the HR software in action.