The Employment Act 2002

Most of the provisions in this Act came into force in April 2003.

The following changes are made under the Act:
Employees on fixed-term contracts must be treated as favourably as permanent workers - this came into effect on 1st October 2002. (See Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002.)
All employers, regardless of size, must operate a minimum standard compulsory disciplinary and grievance procedure. This came into force on 1st October 2004.
An increase in statutory maternity leave to six months paid leave and a further six months unpaid leave. This came into force on 6th April 2003.
Introduction of leave for adoptive parents of six months paid leave following the adoption of a child and a further six months unpaid leave. This came into force 6th April 2003.
Introduction of two weeks paid paternity leave for working fathers. This is at the same rate as maternity pay. This came into force on 6th April 2003.
Requests by working parents of young or disabled children to work flexibly must be considered by their employers. This came into force on 6th April 2003.
Reimbursement by the government of maternity, paternity and adoptive payments made by employers. Small employers can reclaim 100% reimbursement.
Establishment of union learning representatives with a right to paid time off work.
A questionnaire procedure in Equal Pay cases in employment tribunals. This is intended to provide comparable information to be used in the process of disclosure and will give access to details of other employee's pay rates. This came into force on 6th April 2003.
Changes to Maternity Rights
Ordinary Maternity Leave increased from 18 to 26 weeks. Employees with 1 year's continuous employment are entitled to additional Maternity Leave of a further 26 weeks (unpaid).
The notice period which an employee must give to be eligible for Statutory Maternity Pay increased from 21 days to 28 days.
An employee is also allowed to vary the date of their maternity leave 28 days before the date to be varied or 28 days before the new date, (whichever is the earlier).
There is no longer be a requirement on an employee to confirm in writing whether they will be taking Additional Maternity Leave following Ordinary Maternity Leave.
An employee's entitlement to SMP is safeguarded, (as long as she complies with the notice provisions) from the 15th week before the Expected Week of Confinement, even if her employment is terminated after this point.
An employer can offset SMP payments against any payments due to be made to the Inland Revenue. This could possibly also include advance funding if the amount of SMP to be paid is likely to exceed tax, National Insurance and other sums due to the Inland Revenue. Small employers can reclaim as much as 100%, otherwise 92% is reclaimable.
Changes to Paternity Rights
The new right to paid paternity leave is in addition to the 13 unpaid weeks' parental leave entitlement. The entitlement is two weeks paid leave. The leave is paid at the SMP rate (or 90% of the employees average weekly earnings, if this is less). An employer is entitled to reclaim Paternity Pay from the government.
Leave can be taken in a single block of either one week or two weeks. It can be taken after the birth of a child or the placement of a child for adoption. The leave must be taken within 56 days of the expected week of childbirth or the actual birth, (if this is earlier).
SPP and Leave are available to employees whether they are the biological father or the mother's partner or husband but not the biological father.
Entitlement begins if the baby is born or placed for adoption on or after 6th April 2003.
Paternity Leave is available to an employee who has completed a period of at least 26 weeks qualifying service with the same employer, by the 14th week before the child is expected to be born (or is matched in the case of adoption). Additional conditions are that the mother must have given appropriate notification and qualifies for Statutory Maternity Leave.
An employee is entitled to the same job following paternity leave and will be protected from unfair dismissal related to paternity leave.
Employers can reclaim Statutory Paternity Pay in the same way as for Statutory Maternity Pay. If an employer fails to pay Statutory Paternity Pay, the Inland Revenue will become responsible for the payment. This is also the case if the employer becomes insolvent.
Introduction of Adoption Leave and Pay
An employee who has had a child placed with them for adoption is entitled to Ordinary Adoption Leave and Additional Adoption Leave at the same level as for Statutory Maternity Leave. This is, in the case of Ordinary Adoption Leave, 26 weeks and Additional leave of a further 26 weeks. An employee must have been matched with a child by an approved adoption agency and must give their employer a 'matching certificate' from an approved adoption agency.
The provisions apply to both married couples and single people who adopt and applies to placements for children up to 18 years old.
In the case of a married couple, only one of them is entitled to take the leave. However, the other is entitled to the two weeks paternity leave (if they qualify).
Adoption leave and pay does not apply to stepfamily adoptions or adoptions by a child's existing foster carer.
The employee must have completed a qualifying period of employment. This is at least 26 weeks by the week in which the approved match with the child is made. They must comply with notification requirements and have average weekly earnings equal to or above the lower earnings limit applying to National Insurance Contributions.
Like maternity leave, an employee can vary the date notified for taking Adoption Leave.
An employee has the right to return to the same job following Ordinary Adoption Leave and is protected from unfair dismissal related to adoption leave.
Special Regulations apply to overseas adoption.
Employers can reclaim Statutory Adoption Pay in the same way as for Statutory Maternity Pay.
Compulsory Grievance and Disciplinary Procedures
These apply to all employers. Small employers are no longer exempt.
The following minimum standards are introduced by The Employment Act 2002:
  • An employer must set out in writing the reasons for the alleged misconduct.
  • The employee must be invited to attend a disciplinary meeting.
  • After the meeting, the employer must inform the employee in writing of the decision.
  • The employee can appeal.
Failure to follow the standard procedure will amount to unfair dismissal unless the employer can show that the failure to follow the procedure would have made no difference to the outcome. An Employment Tribunal can make a punitive award of an increase in compensation of 10% for failure to comply with the standard procedure, (and this can go up to as much as 50%). A Tribunal can also award up to four weeks pay for the period of time it would have taken to have gone through the disciplinary procedure.
Employers can have their own contractual disciplinary and grievance procedures as long as these are not less than the minimum standards set out by the Act.
New Flexible Working Provisions
These regulations apply to parents, adopters, guardians or foster parents of children aged under six. To qualify an employee must have worked for the employer for a continuous period of 26 weeks at the date of making their application for flexible working.
An employee may apply in writing to an employer to change the terms and conditions of their employment relating to the hours worked, the times and place of work or some other term in their contract. The application has to be made for the purpose of caring for a child under the age of six (or 18 in the case of a disabled child).
There is a right to make such an application once in each 12-month period up to the child's 17th birthday (or 18th in the case of a disabled child).
An employer can only refuse an application under certain circumstances (e.g. burden of additional costs to the employer, detrimental impact on performance or ability to meet customer demand etc.).
An employer should hold a meeting with the employee within 28 days after the date the application is made in order to discuss the application. An employer should give a decision to the employee within 14 days of the meeting being held.
The employee has a right of appeal against any refusal of their application, the appeal must be made in writing within 14 days of receipt of the employer's decision.
Examples of flexible working include:
  •  A change in working hours.
  •  A request to work from home.
  •  A request for staggered working hours.
  •  A request for flexi-time.
  •  A request for time off in lieu.
  •  Job sharing.
  •  A request for shift working / shift swapping.
  •  Term time working.
  •  Voluntary reduced working time.
  •  Self-rostering (an employee chooses their working hours).