British Labour Law - Job Security

Job Security

Originating with the Contracts of Employment Act 1963, the Redundancy Payments Act 1965 and the Industrial Relations Act 1971 UK workers have three principal job security rights, now consolidated in the Employment Rights Act 1996, sections 86, 94 and 135. These statutory provisions override the old common law position that a dismissal would only be wrongful if it contravened the contract's express or implied terms. First, after one month's work an employee must have one week's notice before dismissal. Second, after one year's work, the dismissal must be for a good business reason. If an Employment Tribunal is not convinced the dismissal is justified on grounds of an employee's capability, conduct, redundancy or another good reason, the dismissal will be "unfair" and the employee will be awarded damages. A court may order that an employee should get her job back, but this is rare. Third, after two years' work and if dismissed, an employee is entitled to a redundancy payment, which like the notice period increases according to the number of years worked. Contracts typically go beyond this bare minimum, but cannot go below. The UK has not yet ratified the ILO Termination of Employment Convention and compared to its European and Commonwealth counterparts, jobs in the UK are relatively insecure, particularly since workers have little formal mechanism, excluding pressure through collective bargaining, to challenge a management's decision about dismissals before they take place. When collective redundancies are proposed, however, EU law has introduced a requirement that employers consult on changes. EU law also introduced a rule that if a business is transferred, for instance, during a merger or acquisition, employees may not have their terms worsened or lose their jobs without a good economic, technical or organisational reason. If employees do lose their work, they may fall back on a minimal system of state insurance, funded primarily through income tax or National Insurance, to collect a "jobseekers allowance", and may make use of public employment agencies to find employment again.