Employment Law Glossary of key terms and abbreviations

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1 Employment Law Glossary of key terms and abbreviations ACAS ACAS stands for the Advisory, Conciliation and Arbitration Service a UK government funded independent body offering conciliation services to parties involved in an employment dispute. Aggravated Damages Whilst relatively rare, aggravated damages can be awarded by the Employment Tribunal in discrimination cases, where it considers that the respondent (the employer) acted in a particularly high-handed, malicious or insulting way, towards the claimant (the employee) at the time of the discriminatory act or in respect of their conduct following the act (including the Tribunal proceedings). Basic Award If an employee is found by the Employment Tribunal to have been unfairly dismissed the compensation that is awarded will consist of two strands; the basic award and the compensatory award (see below). The basic award is calculated in the same way as the statutory redundancy payment, using a formula which takes into account the employee's age, years of service and average weekly pay (subject to the statutory limit). Claimant Claimant is the term used for a person who issues an Employment Tribunal claim. Compensatory Award The compensatory award is the second strand of compensation available to an employee who has been found to have been unfairly dismissed (the first strand is termed the basic award please see above). The amount of the award, which is subject to a statutory limit (please see our guidance note on employment law facts and figures for the current limit), is intended to compensate the employee for financial loss sustained by the employee because of the dismissal, in so far as that loss is attributable to the action of the employer. This will include consideration of the employee s loss of earnings, future loss of earning and loss of benefits. Compromise Agreement Now termed settlement agreements please see below.

2 Constructive Dismissal A constructive dismissal occurs where the conduct of the employer is such that an employee is entitled to leave their job and treat themselves as dismissed. To succeed in demonstrating that they were constructively dismissed an employee must demonstrate that the employer s conduct represented a fundamental breach of contract (often termed a repudiatory breach of contract) and that he or she resigned from their position in response to that breach. Contributory fault An Employment Tribunal may reduce a claimant s compensation for unfair dismissal if it is found that the employee s conduct caused or contributed to the dismissal. A reduction for contributory fault can be for as much as a 100% of the award. COT3 A COT3 is the form that is signed by all parties to record the terms of settlement of an Employment Tribunal claim (or potential claim) following conciliation by ACAS. Direct discrimination Direct discrimination occurs where a person is treated less favourably because of a protected characteristic. There are nine protected characteristics under the Equality Act 2010; age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation. EAT EAT is the abbreviation for the Employment Appeals Tribunal. The EAT hears the appeals from the Employment Tribunal. Early Conciliation Service Anyone who is thinking of bringing a claim against their employer must contact ACAS (see above) first, who will then see if a resolution can be found without the need for a claim. Effective date of termination The effective date of termination (often abbreviated as the EDT) is the day that a person s contact of employment comes to an end. If a person is dismissed with notice (or resigns by giving notice), the EDT will be the date on which the notice expires. If an employee s employment has been terminated without notice (for example, if the employee has been dismissed for gross misconduct) the EDT will be that date on which the termination takes effect. Employment Tribunal (ET) The Employment Tribunal is the main forum in which employment disputes are heard. It used to be known as the Industrial Tribunal. ET1 The ET1 is the standard form that a claimant must use to issue an Employment Tribunal Claim.

3 ET3 The ET3 is the standard form that a respondent must use to respond to an Employment Tribunal claim. Ex Gratia Payment An ex gratia payment is a payment that is made where there is no obligation or liability to pay it. Garden Leave Garden leave is a term used for a period during which an employee continues to receive all salary and benefits, but is requested by the employer not to attend the office or contact clients or customers. Grievance If an employee has a concern, problem or complaint at work, they can raise a grievance with their employer. Gross Misconduct Gross misconduct refers to an act of misconduct that is so serious as to justify summary dismissal (i.e. dismissal without notice) of an employee. Acts classed as gross misconduct are usually listed in an employer s disciplinary procedure and can include theft, physical violence, breaches of health and safety etc. Harassment Harassment is a form of discrimination and occurs when a person is subjected to unwanted conduct, which is related to a protected characteristic (see below), and the conduct has the effect of violating the person's dignity, or creates an intimidating, hostile, degrading, humiliating or offensive environment. Indirect Discrimination Under the Equality Act 2010, indirect discrimination is a type of discrimination that occurs where an employer applies a provision, criterion or practice which has the effect of disadvantaging people who share certain protected characteristics (e.g. age, race, sex etc). Indirect discrimination may not be unlawful if an employer can justify the provision or practice by showing that it is a proportionate means of achieving a legitimate aim. Mitigation The rule of mitigation requires a claimant to take steps to minimise his or her loss the duty to mitigate. In an employment context this will usually involve the claimant trying to find a new job. An Employment Tribunal may reduce an award for compensation if it considers that a claimant has failed to make reasonable attempts to mitigate their loss. Notice period Notice periods can be either statutory or contractual. An employer must give at least the statutory minimum period of notice, which is based on the employee s length of service.

4 PILON clause PILON stands for payment in lieu of notice. If an employee s contract of employment contains a PILON clause the employer will have the right to pay an employee a lump sum rather than require them to work out their statutory or contractual notice period. Protected Characteristics The Equality Act 2010 makes it unlawful to discriminate against people on the grounds of a protected characteristic. There are nine protected characteristics under the Equality Act 2010; age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation. Re-engagement engagement Re-engagement is a remedy for unfair dismissal that may be ordered by the Employment Tribunal. If re-engagement is ordered the employer is required to re-employ the dismissed employee on new terms, with the employee retaining their continuity of service. Reinstatement Like re-engagement (above), reinstatement is a remedy for unfair dismissal that may be ordered by the Employment Tribunal. If a reinstatement order is made the employer is required to give the dismissed employee his or her job back, on the same terms with no loss of pay or continuity of service. Respondent The respondent is the company or person against which a claimant issues a claim in the Employment Tribunal. Restrictive covenant Restrictive covenants are contractual terms that are used by employers to protect their business interests by restricting the activities of employees following termination. Such clauses may prohibit an employee from competing with his ex-employer for a certain period after the employee has left the business, or prevent the employee from soliciting or dealing with customers of the business. Settlement agreements Formerly known as a compromise agreement, a settlement agreement is a binding contract whereby an employee (or former employee) agrees not to pursue certain employment law claims against their employer (or former employer), usually in return for a termination payment. For a settlement agreement to be legally binding it must be in writing, relate to a particular complaint or proceedings and the employee must have received independent legal advice on the terms. Summary dismissal Summary dismissal refers to the dismissal of an employee without notice (or any payment in lieu of notice). A dismissal without notice will be deemed to be a wrongful dismissal (see below) unless it is in response to a repudiatory breach of contract by the employee (most commonly an act of gross misconduct).

5 TUPE TUPE is the abbreviation for the Transfer of Undertakings (Protection of Employment) Regulations 2006 (formerly the Transfer of Undertakings (Protection of Employment) Regulations 1981). Under the regulations, if there is a relevant transfer (which includes a business transfer or a service provision change) employees are automatically transferred from the transferee to the transferor, with there terms and conditions protected. Unfair Dismissal An unfair dismissal can occur when: an employer dismisses an employee for a reason other than the one of the five potentially fair reasons set out in the Employment Rights Act 1996 (i.e. conduct, capability, redundancy, breach of a statutory restriction or some other substantial reason); and/or the employer does not follow a fair procedure for the dismissal; and/or the employer s decision to dismiss fell outside the range of reasonable responses open to an employer in the circumstances. Victimisation Victimisation is a specific term used in discrimination law. A person victimises an individual if he or she subjects that individual to a detriment because that individual has performed a 'protected act'. Protected acts include making an allegation of unlawful discrimination or issuing a discrimination claim. Whistleblowing lowing Whistleblowing is the common term used to describe a situation where an individual raises a concern about a possible fraud, crime, danger or other serious risk. A worker who has made a protected disclosure is protected from being dismissed or subjected to a detriment because of the disclosure. Without Prejudice The without prejudice rule prevents communications between parties (whether written or verbal), that are made with the genuine aim of settling a dispute, from being admissible as evidence in court. However, simply including the words without prejudice will not invoke the rule if the communication has not been made in a genuine attempt to settle an existing dispute. Wrongful Dismissal A dismissal will be a wrongful dismissal if it is in breach of the employee s contract of employment. If someone is wrongfully dismissed they may claim damages for all financial and other benefits that they would have received had they been dismissed in compliance with their contract. Zero-hours ours Contract There is no legal definition for a zero-hours contract, but it is the common term given for a contract under which an employer is not obliged to provide a worker with any minimum working hours and the worker is only paid for work carried out. For further information or advice regarding an employment law issue please contact Steven Conway on