Small Organisations Information

A basic guide to employment law for small organisations.

This guide is intended for small firms that do not have a specialist personnel officer in order to brief employers and employees on the main provisions of the Employment (Jersey) Law 2003, effective from 1^st July 2005.

It is not intended to be an authoritative interpretation of the law, nor can it cover all of the requirements of the law.

Many other issues will need to be considered by employers, for example those who have 5 employees or more need to have a written health and safety policy. Further advice on most employment issues can be obtained from JACS either by telephoning our helpline on 730503 or accessing our specific information on our website www.jacs.org.je

In addition, JACS has produced a more comprehensive guide, the A to Z of Work that is available in hard copy or via our website.

This guide is divided into a number of sections covering matters that the employer must address. Any reference to "him/he" should be read as including "her/she". The sections are:

1. Written Statement of Employment – must be given to employees within 4 weeks of commencement of work. Even if the employment ends before 4 weeks is completed, an employee has the statutory right to ask for and be given a copy of the written terms that would have applied.

2. Minimum Rest Periods and Annual Leave – all employees are entitled to a minimum of 2 weeks annual leave, plus Public and Bank Holidays.

3. Minimum Wage – from 1^st April 2007, all employees over 16 years of age to be paid £5.40 per hour (£5.80 from 1st April 2008), unless undertaking the first year of a recognised training scheme (£4.05 per hour subject to certain provisos £4.35 from 1st April 2008). Employers can offset the cost of accommodation or accommodation and meals, subject to certain maxima.

4. Payment of Wages – details the need for an itemised pay statement and agreed or authorised deductions only.

5. Termination of Employment – sets out the minimum legal notice periods between the employer and the employee.

6. Unfair Dismissal – the law protects employees from dismissal except for a fair reason and by a fair procedure. Compensation payments for unfair dismissal may be imposed by the Employment Tribunal.

7. Fixed Term Contracts – special provisions attach to FTCs. The non-renewal of FTC may amount to an unfair dismissal.

1. Written Statement of Employment

Within 4 weeks of an employee starting work, his employer must provide him with a written statement of the terms of employment if he works 8 hours per week or more. There are special provisions for employees who are required to work outside the Island. Even if the employment ends before 4 weeks is completed, an employee has the statutory right to ask for and be given a copy of the written terms that would have applied.
The statement must be signed by the employer and must give details about specific matters. A full guide to written statements can be found under "Employment Law 2003" and a model statement can be found under "Model Policies and Procedures" on our website. Those employers who employ staff on a "casual basis" or on a more regular basis but with variable hours as and when needed, e.g. to meet temporary workload peaks or holiday cover, may wish to consider a variable hours written statement.

Changes to written terms

Changes in the terms of employment. If an employer changes the terms of employment he must notify the employee in writing of the changes no later than 4 weeks after the change. The employer may refer to another document or collective agreement that details the relevant changers and which the employee has reasonable access to. If the name or the identity of the employer changes, the employee must be advised immediately in writing.
Where the change that the employer wishes to make is a contractual change, employees should be fully consulted and any business reasons for the change should be explained and discussed. If an employer feels that a change is essential despite failing to gain the employee’s agreement, the imposition of the change could lead to a breach of contract by the employer and may even lead to the employee resigning and claiming constructive dismissal to the Employment Tribunal.
An employee who is not given a written statement, or where the statement does not fully comply with the law, may refer the matter to the Tribunal. Employers who fail to comply with the law may be fined.

2. Minimum Rest Periods and Annual Leave

Rest Periods

An employee is entitled to an uninterrupted rest period of not less than 24 hours in each 7 day period or, if agreed in a relevant agreement, two such periods in each 14 day period or one uninterrupted period of 48 hours in each 14 day period. If a rest period is interrupted either contractually, or due to business requirements, the employer is required to make available a compensatory rest day at the earliest opportunity within 14 days of the interrupted day. An interruption includes the employee having to: - take a work-related action either at home or on the telephone; attend the workplace; be at or near the place of work.
An employee can voluntarily work additional hours during his rest period, but cannot be required by the employer to do so, although exceptionally, in the case of "operational urgency", the employer may override the rest day provisions.
Jersey Law does not specify a maximum working week in terms of total hours, nor does it set out rest periods during the working day. Employers should be aware of their responsibilities under the Health and Safety at Work Law, however, and ensure that employees have sufficient breaks to help them to work safely.

Further information on minimum rest periods can be found under "Employment Law 2003" on our website.

Annual and Public Holidays

An employee is entitled to a minimum of 2 weeks paid annual leave (or a longer period if specified in a relevant agreement) plus paid leave on Christmas Day, Good Friday and on all Public and Bank Holidays that fall on what would have been an employee’s normal working day. If an employee is required to work on one or more of these days then he must receive an equivalent number of days off in lieu with pay. Even if you offer an enhanced payment for such work, your employees are still entitled to alternative paid time off in addition to any such payment.
The meaning of 2 weeks leave is determined by the employee’s normal working week. That is an employee who is contracted to work a 6 day week will be entitled to 12 days paid leave, whereas an employee working a 3 day week will be entitled to 6 days paid leave.
If working hours or pay is variable, then for the purposes of calculating the value of a week’s holiday the average of the previous 52 weeks shall be taken. Where the employee does not have sufficient service to calculate a 52 week average, the calculation should be undertaken fairly in a manner as close to this formula as is possible.
If an employee joins the organisation part way through the leave year (and at least 28 days before the end of that year), then his paid holiday entitlement is to be calculated pro-rata, based on 1/12^th of the annual entitlement for each month of service during that year.
On termination of employment an employee’s holiday entitlement shall be calculated on a pro-rata basis and the employee is entitled to that proportion of the paid holiday not already taken. Similarly, if at the date of termination the employee has taken more holiday in that leave year than his service allows, the employer is entitled to receive from the employee payment equal to the excess holiday taken.

Further information on minimum holidays and Public and Bank Holidays can be found under "Employment Law 2003" on our website. Some employers who employ seasonal staff or whose employees have variable working hours find it better to adopt "rolled-up" holiday pay . Click on the link for further details.

3. Minimum Wage

With effect from April 1^st 2007, all employees above compulsory school age (16) are entitled to a minimum hourly wage of £5.40 (£5.80 from 1st April 2008), irrespective of how few hours are worked each week. The exception to this is for new employees on accredited training programmes, approved only by the Social Security Minister, who may be paid a trainee rate of £4.05 (£4.35 from 1st April 2008) for a maximum period of 1 year. Please see the relevant Code of Practice.
An employer may make a deduction from minimum wage if accommodation or accommodation and food of a minimum standard is provided. The maximum deduction from the minimum wage is £78.80 per week (£84.63 from 1st April 2008) for accommodation and food, or £59.10 per week (£63.47 from 1st April 2008) for accommodation only. No other form of benefit can be taken into account in determining whether the minimum wage has been satisfied.
Employers are obliged to maintain certain records for each pay period, to demonstrate that minimum wage obligations have been met, for a period of 10 years. Records may be kept on computer. An employee, or a named colleague or representative, has the right of access to and the right to copy records that relate to himself.
An employee may make a complaint to the Tribunal if he believes that he has not received the minimum wage or if right of access is denied. Employers who neglect to meet their minimum wage obligations may be fined by the Tribunal and be required to compensate the employee.

Certain "special classes of person" may not be covered by the minimum wage provisions. Further information on minimum wage can be found under "Employment Law 2003" on our website.

4. Payment of Wages

Wages must be paid in legal tender (or by cheque, money order or postal order) or by direct payment into a bank account and must be paid on normal working days and at regular intervals of not more than one month.
Deductions from wages may only be made with: the authority of any Law, Regulation or other Enactment (such as deduction of Social Security contributions); a judgement or order of the Royal Court or the Petty Debts Court; the permission of the employee by virtue of a relevant agreement. Employers who wish their employees to enter into a training agreement, for example, where the employee undertakes to repay training costs in certain circumstances, should ensure that the employee’s permission is obtained in writing to that specific deduction, or to its possibility at some future date.
Employees have the right to receive a written itemised pay statement on or before each pay date. The statement must detail: gross wages; amount and purpose of any variable deductions; net wages; a description of the amount and the method of payment when different parts of the net wages are paid in different ways. Employers should maintain records of hours actually worked, not only the employee’s contractual hours.
Employees or employers may refer to the Tribunal where there is some dispute about the provision of information or particulars within a pay statement. An employer can be required to repay unauthorised deductions to an employee and can be fined for contravening the pay statement provisions.

Further information on payment of wages can be found under "Employment Law 2003" on our website.

5. Termination of Employment

Notice periods

Provided that an employee works for a minimum of 8 hours a week or more, the minimum periods of notice are set out in the law. Depending on the employee’s length of continuous service, the employer must give:

a) 1 week’s notice – less than 26 weeks continuous service

b) 2 weeks’ notice – 26 weeks or r more but less than 2 years

c) 4 weeks’ notice – 2 years or more but less than 5 years

d) 8 weeks’ notice – 5 years or more but less than 10 years

e) 12 weeks’ notice – 10 years or more but less than 15 years

f) 16 weeks’ notice – 15 years or more continuous service

In the written terms of employment or in another relevant agreement, the employer can specify a period of notice less than 1 week during the first 4 weeks of service and, therefore, can offer an employee a "trial period" with, say, 1 day’s notice to be given by either party if the trial is not successful.
While the law does not set any notice period to be given by employees with less than 26 weeks service, the employer could specify a period within the employee’s written terms of employment (e.g. 1 week’s notice). After 26 weeks’ service, an employee is required to give:

a) 2 weeks’ notice if more than 26 weeks continuous service but less than 5 years

b) 4 weeks’ notice if more than 5 years continuous service

A relevant agreement between an employer and an employee (usually the written terms of employment) can specify longer notice periods than those set out in the law, although it is not recommended that the employee should be required to give more notice than that required by the employer.
Statutory notice periods do not apply to fixed term contracts (FTC). However if no notice period is included in the written terms, either party would risk being in breach of contract if they terminated the contract before the end date. Such a breach by the employer could result in wages being due for the whole of the original contract period. To avoid this risk, many employers include a facility in FTCs that allows either party to terminate the contract earlier with notice. Further information is given in section 7.
Either party may waive their rights to notice at the time that notice is given or received, providing this is voluntary. The party who waives their rights will not receive any compensation for the notice period that they have waived. Similarly, either party can make or accept payment in lieu of notice. It is important when notice is not required to be worked that both parties understand clearly whether or not there will be payment in lieu of notice.
Termination of employment without notice is possible if the behaviour of either party justifies such termination. An act of gross misconduct by the employee (e.g. theft, fraud, violence at work etc.) may justify such a dismissal. When an employer fundamentally breaches the contract (for example by failing to deal with bullying or harassment or by forcing an employee to accept a substantial pay cut or change in working hours) it is possible for the employee to resign without notice and claim that the employer’s behaviour forced him to do so – this is commonly called constructive dismissal.

Continuity of service

Any week or part of a week governed by a contract of service for 8 hours or more counts towards continuous service. Similarly, any week in which the employee is absent due to sickness or injury or because work is temporarily unavailable counts.
If an employee works for the same employer on successive FTCs and the break between each contract is not more than 26 weeks, the interval between the two contracts will not break the continuity of service (although the interval itself will not count as service).
In general terms, if a business is transferred from one person to another then the continuity of service of employees is not broken by the transfer. Similarly, if an employee of a company is taken into the employment of an associated company (e.g. a subsidiary or a holding company, or if both companies are subsidiaries of the same holding company), continuous service is maintained.

Bonus payments and holidays on termination

Section 2 above deals with holidays.
Where it was originally agreed that bonus payments or gratuities are part of an employee’s pay, an employee is entitled to receive a pro rata payment at the termination of his employment. Exceptions to this are when it was originally agreed that the employee would have to complete a specified period of employment before a bonus became payable and the employee terminates his employment before that specified period has been completed, or where the employer legally terminates the employment without notice due to the employee’s gross misconduct.

Further information on termination of employment can be found under "Employment Law 2003" on our website.

6. Unfair Dismissal

Definition of dismissal

When the employer terminates the employment, with or without notice, or
When an employee has been employed under a fixed term contract (FTC) and the FTC expires without being renewed, or
When the employee terminates the contract because of the employer’s conduct (commonly called constructive dismissal), or
When the employer terminates the contract by giving notice and, during the notice period, the employee himself then gives notice that expires on an earlier date.

Effective date of termination

The date on which notice expires, whether given by employer or employee
When termination is without notice, the date termination took place
When a FTC is not renewed, the actual date of expiry

Fair dismissal

For a dismissal to be fair, the employer must show that the principal reason for the dismissal is either:

The capability or qualifications of the employee in relation to the kind of work he is expected to do
The conduct of the employee
That the employee was redundant and the method of selecting that employee for redundancy was fair
That to continue to employ the person would be contravening a duty or restriction imposed by law
Some other substantial reason of a kind that would justify dismissal and that the employer acted reasonably in treating it as a sufficient reason for dismissal (e.g. the dismissal of a person specifically employed to cover another person’s maternity leave when that other person returns to work).

Disciplinary, Capability and Grievance Procedures

In addition to the dismissal being for a fair reason, the Tribunal will consider whether the employer acted reasonably. As a bare minimum an employer would be expected to follow a fair disciplinary policy, including allowing the employee to be represented by a work colleague or trade union official.

Where an employer is concerned about an employee’s capability, particularly in relation to the employee’s ill-health, it is strongly recommended that the employer follows the principles set out in the Poor Performance (Capability) Procedure, including taking appropriate medical advice. The "Model policies and procedures" section of our website has example policies dealing with discipline, grievances, capability procedures and a letter to an employee’s own Doctor in which, with the employee’s permission, an employer can request a medical report.

Redundancy

While redundancy may be a fair reason for dismissal, a person may be unfairly selected for redundancy if the circumstances giving rise to the redundancy apply equally to other employees who have not been made redundant.

Redundancy is defined in the law as being when:

The employer has ceased, or intends to cease

to carry on the business for the purposes of which the employee was employed, or
to carry on that business in the place where the employee was so employed, or

The requirements of that business

for employees to carry out work of a particular kind, or
for employees to carry out work of a particular kind in the place where the employee was employed, have ceased or diminished, or are expected to, permanently or temporarily for any reason.

Appendix 1 of the model redundancy procedure in the "Model policies and procedures" section of our website will be of help in ensuring a fair selection procedure.

Qualifying criteria for a claim of unfair dismissal

The right to claim unfair dismissal is available to employees whose basic hours are 8 hours a week or more and who have a minimum of 26 weeks’ continuous service. Employees on a FTC of 26 weeks or less need only have served two-thirds of their FTC (subject to a minimum of 13 weeks’ service) to have the right to claim.
A complaint must be brought to the Tribunal within 8 weeks of the effective date of termination.
At the date of termination, claimants must be 16 years of age and under the normal retirement age for the position within the organisation, or where no such age is evident, under the age for retirement as defined under the Social Security (Jersey) Law.
In certain circumstances there is no minimum qualifying service or any upper age limit.

Compensation for Unfair Dismissal

The Tribunal may award compensation to be paid by the employer in accordance with a scale based on the employee’s length of service and salary level.

less than 6 months service (auto.unfair) - 4 weeks’ pay
6 – 12 months continuous service - 4 weeks’ pay
12 – 24 months continuous service - 8 weeks’ pay
24 – 36 months continuous service - 12 weeks’ pay
36 – 48 months continuous service - 16 week’s pay
48 – 60 months continuous service - 21 weeks’ pay
60 + months months continuous service - 26 weeks’ pay

The Tribunal may also award an additional sum, up to a maximum of £10,000, in compensation for any contractual commitments that the employee was due, but did not receive e.g. payment due in respect of contractual or statutory notice.

Further information on unfair dismissal can be found under "Employment Law 2003" on our website.

7. Fixed Term Contracts

A fixed term contract (FTC) is one which ends:

After the expiry of a specific period of time (e.g. 6 months)
On a specific date (e.g. October 31^st 2005)
When a specific event occurs (e.g. the return to work from Maternity Leave of the person whom the FTC employee was employed to cover).
The completion of a specific event (e.g. when the sale of XYZ Limited has been completed).

It can be seen that FTCs are intended to be used for particular purposes where the duration of employment is foreseen as being limited. Because of special arrangements within the law, it would be unwise for an employer to use FTCs, as an alternative to "permanent" contracts, where the job is ongoing. FTCs are ideal for seasonal jobs or for providing cover for absent employees, such as employees on maternity leave.

Annual and Public Holidays and Rest Days

FTC employees are entitled to annual and public holidays and to rest days in the same way as "permanent" employees. Holidays are earned pro-rata to length of service (1/12^th of the annual entitlement for each month of service) such that an employee on, say, a 4 month FTC will as a minimum be entitled to 4/12ths of 2 weeks paid holiday. Any accrued holiday that has not been taken by the end of the FTC should be paid to the employee.

Notice periods

The part of the law that specifies minimum periods of notice does not apply to FTCs. The absence of notice periods means that should the employer want to terminate the contract early (perhaps due to ongoing poor performance), the employer may be under an obligation to pay the agreed salary for the duration of the FTC.

The employer may decide, therefore, to include an appropriate notice period within the terms of the FTC.

Unfair dismissal

The non-renewal of a FTC equates to dismissal and may, therefore, be an unfair dismissal. Exactly the same circumstances as described in unfair dismissal in section 6 above apply. If the job has come to an end then this will be considered as redundancy and will be fair. Similarly, if the FTC was clearly stated as being to provide cover for another employee who is expected to be absent for a period of time (e.g. due to sickness or maternity leave), then the return to work of that other employee will be "some other substantial reason" for the fair ending of the FTC.

It follows, therefore, that in creating a FTC it is important for the employer to clearly state in the contract the circumstances that will cause the FTC to end.

Employers should be particularly careful when they have a number of FTC employees doing similar work (e.g. waiters employed to meet peak demand during the tourist season) and they want to reduce the number of FTCs gradually as the season comes to a gradual end. If some FTC employees are selected to leave first and others are permitted to work for a few weeks longer, the employer needs to have a fair basis on which to select those that leave earliest. Failure to have such a selection procedure could result in claims for unfair dismissal on the grounds of unfair redundancy selection (further information on unfair dismissal and automatic unfair dismissal can be found under "Employment Law 2003" on our website).

Qualifying period for unfair dismissal

The right to claim unfair dismissal is available to FTC employees on contracts longer than 26 weeks, whose basic hours are 8 hours a week or more and who have a minimum of 26 weeks’ continuous service.

Employees on a FTC of 26 weeks or less need only have served two-thirds of their FTC (subject to a minimum of 13 weeks’ service) to have the right to claim.

Further information on FTCs can be found under "Employment Law 2003" on our website.

The mission of JACS:

To assist in the building of harmonious relationships between employers and employees, both collectively and individually and thereby help improve the performance and effectiveness of organisations .