Employment Law Glossary

Didlaw’s A to Z of employment law – a glossary of legal terms. No legal jargon here!

Usually when you hire a lawyer to help you with your legal issue at work, you will quickly be bombarded with lots of unfamiliar legal terms.

At didlaw we pride ourselves on not talking in legalese and on advising our clients in plain English. To help you navigate your way through the world of employment law, we have explained some of the common terms/definitions we use here:

ACAS

Free and independent body for employment law which guides and, at the request of either party, helps to prevent and resolve workplace disputes. A worker is required to notify and get a certificate from ACAS before submitting any claim to the Employment Tribunal. 

Accrued 

Built up, for example the number of holiday days earned but not yet taken.

Adviser’s certificate 

Signed by a solicitor or other appropriate representative, to confirm they have advised on the terms and effect of an employment settlement agreement without which the agreement is not legally binding. 

Application

A formal request made in a court or employment tribunal process, for a specific outcome.  For example, accessing documents that might have been held back by your opponent during the employment tribunal process requires an application for specific disclosure. 

Binding 

This means that the document or agreement has the force of law and if it is not adhered to you can sue to ensure it is. This also means that you must adhere to the terms of the document if you are a party to it, if you do not you may be at risk of being sued. 

Boilerplate clauses 

These are standard terms included in a formal agreement. 

Breach of contract 

This is non-compliance with a binding agreement (including an employment contract). 

Burden of proof 

This refers to what is needed to be proven in a case, and who has the responsibility to prove it. In court and employment tribunal proceedings, whichever party is required prove a thing must show that the *thing* was more likely than not to have happened. 

Case Management Hearing (sometimes called a Case Management Conference)

A hearing to decide the route of the claim towards trial and the steps that the parties must take to get there. Orders will be made by a judge for the parties to follow and deadlines for tasks to be completed will be set. This is not a hearing about the substance of a case.  

Clause 

A paragraph of an agreement or contract. 

Clawback clause

Clawback is a provision under which money that has already been paid by an employer to an employee must be paid back. An example would be a signing on bonus if you leave very soon after joining. Another example would be in relation to shares or share options where you are locked in for a period of time and have to hand back the benefit if you do not serve the lock-in period.

Compensation 

Usually but not always money, received because a person has been treated unlawfully. The money is meant to ‘make up for’ financial and other losses suffered because of the wrongdoing, including injury to feelings.

Constructive dismissal 

A claim made by an employee who has 2 years’ service but who resigned from their job in response to a significant trigger at work. Basically, a person dismissing themselves because they cannot carry on due to their employer’s poor treatment. 

COT3 

A binding agreement made to settle an Employment Tribunal claim. A COT3 is used where there is already a claim in existence but also if you use the services of ACAS. It is basically the same as a settlement agreement but takes a slightly different format. 

Court of Appeal

The court which hears appeals from the EAT and other courts where one of the parties disagrees with the outcome of a trial on legal grounds. Permission has to be sought from the Court before bringing an appeal in this court. 

Deducted at source (tax) 

This means income tax and National Insurance Contributions will be taken from any payments by your employer before they are paid to you. You therefore receive net income, as opposed to gross income.  

Disclosure 

This is a formal process where the parties in a claim are obliged to share relevant documents (both helpful and unhelpful) with the other party in a court or tribunal claim. You must show any document you intend to rely on as evidence but also anything you have which might be damaging to your case. If you withhold information, you could be in contempt of court. 

Discrimination 

In basic terms, this is where people are treated differently because they have a protected characteristic. This is unlawful discrimination. It can take many different forms – including direct discrimination, indirect discrimination, harassment, victimisation and other forms.

DSAR 

A DSAR is a Data Protection Subject Access Request made under UK GDPR Regulations, which are governed by the Information Commissioner. Anyone can make a formal request to an employer or other organisation to provide a copy of the personal data they hold about you within one month of the request. 

Early conciliation

This is a process run by ACAS which is a required first step before any Employment Tribunal claim is submitted. It is a process intended to facilitate a settlement (ACAS will act as an intermediary) but if you are not interested in exploring an early resolution you can ask ACAS simply to send you an ACAS early conciliation certificate. You will need the ACAS certificate number for your ET1 (ET claim form).  

Ex-gratia 

This is a term used to describe a payment or benefit which is paid as compensation and which is paid from goodwill not due to a legal requirement. In negotiations it is common practice to separate out contractual payments and ex-gratia payments. 

ET

The Employment Tribunals – the venue for most types of employment law claims. 

ET1

This is the form that you or your legal representative will fill in to submit your claim to the Employment Tribunal. This will include basic details including contact information of all relevant parties, and you will be required to tick boxes to indicate the types of claims you are making (e.g. unfair dismissal, discrimination, whistleblowing). The ET1 will usually enclose a Word document entitled the Particulars of Claim or Grounds of Claim, setting out the full factual background and legal allegations for the claims being made but this information can also be included in the ET1 form. 

ET3

This is the form that employers fill in to defend Employment Tribunal claims. The ET3 will usually enclose a Word document entitled Grounds of Defence, setting out the employer’s version of events and their reasons for disputing the worker’s allegations. 

EAT

The Employment Appeal Tribunal – the venue for all appeals of Employment Tribunal decisions.

FSA/FCA 

The FCA is an independent agency which regulates the financial services industry. 

The FSA (the Financial Services Authority) became the FCA (Financial Conduct Authority) in 2013. 

Full merits hearing 

This is the final hearing in an Employment Tribunal claim which decides the outcome of the claim i.e. who wins and who loses. Some people refer to it as the trial.   

Full and final settlement 

This is a label attaching to the payment of settlement money compensation in exchange for an employee not pursuing legal claims against their employer. 

Garden leave 

This is the time an employee spends at home at their employer’s request once either one of them has given notice to end the employment contract. The right to place someone on garden leave will be in the contract of employment along with the terms.  

Governing Law

This is a paragraph of a binding agreement which determines that disputes regarding the agreement must be decided in a specific jurisdiction, often but not always England & Wales.   

Grievance

This is a complaint made by an employee in respect of issues faced in the workplace. It is essentially a formal complaint but the letter of grievance has no set format. It should simply set out what has happened and what you are complaining about. A list is better than a long narrative. It is also a good idea to end your grievance letter with a suggestion about what you would like your employer to do to rectify matters.   

Gross misconduct 

This is any serious misconduct, for example, theft, dishonesty and insubordination, which may be sufficiently serious to result in immediate termination of employment without notice.  

Harassment (discrimination)

This is unwanted conduct related to a protected characteristic which has the purpose or effect of violating the other person’s dignity or which creates an intimidating, hostile, degrading, humiliating or offensive environment for them. Harassment is a form of discrimination which is prohibited under section 26 of the Equality Act 2010.

If you are harassed for a reason which is not related to a protected characteristic you cannot bring a harassment claim and instead should focus on whether there has been a fundamental breakdown in the employment relationship which might justify constructive dismissal. 

Holiday pay 

This is the pay you receive for working days spent on holiday. On termination of employment any accrued unused holiday must be paid to you in lieu or used during your notice period. You have a contractual and a legal right to be paid for accrued holiday but only when you leave. Holiday pay is fully taxable.

Impact Statement (for disability) 

This is a statement used during litigation for disability discrimination, the purpose of which is to explain the impact of a person’s disability on their day to day activities. The employer and the Employment Tribunal will use this statement to assess the extent of the impairment and whether the person should be legally protected by the disability provisions of the Equality Act 2010. 

Implied terms 

These are the rights and obligations which are not expressly set out in a written contract of employment but which apply to the employment relationship. They are things like the right to a safe and healthy working environment. Sometimes in employment litigation you can sue for not only breach of express contractual terms but also the terms implied into every employment relationship.  

Income Protection (also called Group Income Protection or GIP and Permanent Health Insurance or PHI

Income protection or GIP or PHI (the terms are used interchangeably) is an employment benefit which may be available as part of a contract of employment and which protects (and pays a proportion of) your income if you are sick and unable to work. The deferred period for income protection is usually 26 weeks of sickness absence. You have to apply for this cover, it is not automatic and if your employer does not provide you with the application forms you will need to request them. The cover takes different forms so you should check carefully what it covers (your own occupation or any occupation) and the period it will be paid for. 

Judgment

This is the final decision in a court or tribunal claim. Judgment may be given (handed down) at the end of a full merits hearing or it may be “reserved”. “Reserved” means that the Tribunal needs time to consider its decision and the judgment will be given some time later on a date to be notified to the parties. 

Judicial mediation 

This is a settlement hearing chaired by an Employment Tribunal Judge. Judicial mediation is offered to all parties to an ET claim. You are not obliged to participate but this can be a useful way of resolving a dispute without the need, time and costs of a full merits hearing.  

KIT day

A KIT day is a Keeping In Touch day. When you are on maternity or adoption leave you are allowed to work up to 10 KIT days without bringing your leave or leave pay to an end. These days are optional. You do not have to work any KIT days if you do not wish to but they are a nice way of keeping up with what is happening at work while you are on leave which can make returning from leave easier.

List of Documents 

In litigation this is a list of all the documents relevant (helpful and unhelpful) that have to be disclosed in support or defence of a claim. This is collated by putting the disclosure documents in chronological order and labelling them. 

Litigation 

This term means the pursuit of a formal legal claim where a decision will be issued in due course by a judge.  

LTIPs 

LTIPs are Long Term Incentive Plans – benefits, like share options, which depend on an employee’s length of service and which are awarded for good service. On termination of employment it is vital to consider the impact of leaving employment on your ability to keep your LTIPs and any value attaching to them. The terms will be dictated by the company’s LTIP scheme.

Malus

A malus provision in a contract is one where upon the happening of certain events a remuneration committee can adjust a senior manager or executive’s pay lower before the award vests and is delivered. When departing an organisation senior execs should pay attention to malus and clawback clauses which may significantly impact the value of their shareholdings or bonuses when departing.

Negotiated exit (colloquially referred to as a negex)

This is the process of leaving a job under an agreed settlement agreement rather than resigning. It is a better alternative in most situations than formal litigation because it aims to swiftly resolve any conflict or issues and give both parties certainty around the terms of separation, including what the agreed reference will be and any payment terms attached to the deal.  

National Insurance Contributions (NICs)

These are payments made by employees and the self-employed, and by employers on earnings which pay for State benefits and pensions. 

Notice period 

Your notice period is the amount of time you are required to give to your employer to terminate your employment, usually expressed in weeks or months. Likewise, your employer has to give you notice to terminate, usually but not always the same time span or they may have a right to pay you in lieu. 

Notice of Hearing 

This is a notification from a court or tribunal that a hearing is going to take place at a given time on a certain date. It will usually not be possible to change the date of a hearing unless there are exceptional circumstances.  

Occupational Health

Occupational Health, commonly referred to as OH, has the job of keeping people well at work, physically and mentally. All employers have a health and safety duty imposed by law to ensure the health and safety of their workers and must eliminate or reduce occupational risks. If you are unwell and need extended time off work or if you have a long-term health condition or disability your employer may ask you to see their OH team. You should not be alarmed by this because all OH professionals owe you a duty of confidentiality so you can tell them in confidence anything you wish without it being shared with your employer or HR. They will put the necessary safeguards in place.

PENP

Post-Employment Notice Pay is a calculation made to determine the amount of tax payable on notice pay, received post termination and in addition to compensation being paid. Your employer will calculate this amount and advise you if any PENP is payable on your notice pay.

PILON 

Pay in lieu of notice or PILON is when a lump sum payment is made instead (in lieu) of you working your notice period. The value of the lump sum should be the same as the salary you would have received if you worked through your notice period. We also use the terms PILOH (payment in lieu of holiday) and PILOB (payment in lieu of benefits). Notice pay is taxable in full and by law cannot be paid without deduction of tax. 

Performance Improvement Plan (PIP)

This is a process through which an employer evaluates the performance or capability of a worker. Sometimes PIPs can be used by poor employers as a method to push employees to leave by subjecting them to unwarranted criticism, for example following a period of sick leave. 

Preliminary hearing 

This is the court or tribunal hearing before the full merits hearing (final hearing), usually to agree the steps for preparation of the case in advance of the full merits hearing or trial. Sometimes a preliminary hearing is used to determine an isolated issue, i.e. a part of the case that needs to be decided before the final trial. A common example in disability cases is a preliminary hearing to determine whether the employee has a medical condition which amounts to a disability.  

Protected Characteristic

A protected characteristic is a characteristic which is protected under the Equality Act 2010, meaning it is unlawful for people to be discriminated against because they possess that characteristic. The protected characteristics are: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.

Protected conversation 

This is an off the record conversation undertaken between an employee and their employer (either party can start this) to consider the possibility of ending their relationship (where discrimination is not involved). If the parties agree to have this discussion neither can later use anything said during these discussions in evidence in a subsequent trial. The purpose is to enable the parties to explore a workable solution. Some people call this a “without prejudice” conversation but technically it is not because without prejudice requires the existence of a dispute for it to be applicable. A fine distinction but the main thing is that the parties are exploring a solution and should not use any information from these conversations in an adversarial way. 

Qualifying period

A qualifying period is a period of time that you must serve in a job to acquire certain legal rights. For example to be able to bring a claim for constructive dismissal or unfair dismissal you must have worked for that employer for two years or more.

Reaffirmation (of a settlement agreement) 

This is the process of signing a settlement agreement a second time, usually to cover a gap of a few months between signing of the original agreement and the Termination Date.  

Reasonable adjustments 

These are reasonable workplace changes made to support a disabled worker (i.e. location of desk, visual aids, car-parking space). 

Redundancy 

Redundancy is the termination of employment where the dismissal is wholly or mainly attributable to the fact that the employer has ceased or intends to cease to carry on the business or shut down the place of business or where the requirements of the business for that kind of work have changed.

Not every dismissal which is named a redundancy by an employer is a real redundancy. Just because it carries the label redundancy does not mean that legally it is one. If in doubt you should take advice.  

Restrictive covenants or Post Termination Restrictions

These are included as clauses in an employment contract, with the aim of protecting the interests of the company or organisation when you leave employment. Trade secrets are protected at common law and when you leave you must not share the trade secrets of your employer with anyone but especially with a new employer. Other restrictions in your contract might include clauses to stop you taking clients with you, hiring staff or becoming employed by or setting up a competitor of your former employer. These terms will continue to apply when you leave your employment and it is important when taking a new position to inform your new employer that you are bound by these restrictions for a specified period of time. 

Save as to costs

When an email or letter in litigation is marked save as to cost this means that, although communications around settlement are strictly confidential they may be shown to a court or tribunal if the parties cannot reach agreement on who should pay the legal costs.  

Schedule of Loss 

This is a formal document requested from an employee by the judge in any Employment Tribunal claim. In this document the employee must set out the compensation they want to receive on conclusion of the claim if they win the claim.  

Settlement agreement

Formally known as a Compromise agreement, this is a legally binding agreement setting out the terms on which an employment contract will end. An employee must be given legal advice on the terms and effects of this agreement by a solicitor or other authorised representative for it to be legally binding. You cannot waive (give up) your employment rights unless you have had this advice. This is why your adviser also has to sign the Adviser’s Certificate in the agreement.  

Severance 

This is another term used to refer to a contractual or compensation payment.  

SOSR Some Other Substantial Reason 

When a dismissal does not fit one of the four Employment Rights Act 1996 reasons for termination (capability, conduct, redundancy, breach of a statutory duty or restriction) it might be an SOSR dismissal: a dismissal for Some Other Substantial Reason. This is a dismissal which does not fit one of the better-known categories but where something so significant has occurred that the employment relationship cannot continue (i.e. a fundamental breakdown of the working relationship or personality clash). 

Subject to contract 

This is a label applied during negotiations whereby the arrangements/offer details are agreed in principle, but will only be binding once they have been documented in a written contract and signed by both parties.

Summary dismissal 

This is the immediate termination of an employment contract without notice.

Supreme Court

The Supreme Court is the court of last resort in the United Kingdom. There is no court that can hear an appeal from the Supreme Court. This is the court which hears appeals from the Court of Appeal that are still being challenged by one of the parties. Permission is required from the court before bringing a claim in this court.

Tax indemnity 

This is a common clause in a settlement agreement which is effectively a legal promise made by the employee that if any further tax is due on payments in a settlement agreement this must be paid by the employee and will not be paid by the employer. This is a standard requirement of settlement agreements and will be non-negotiable in most cases. In any event the tax position as set out in the agreement should be correct because tax must be deducted at source but if HMRC should consider any further tax is due (for example on a benefit in kind provided under a settlement agreement, for example private health continuation) then the employee is liable to meet this cost and is agreeing when signing the agreement to do so.  

TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006)

This is the legislation that governs the rights of employees who are impacted on the sale of a business’ assets to another entity. Specific rules apply to the transfer of your employment upon which you will be consulted if you are impacted by TUPE. 

Unfair dismissal 

This is a statutory right given to employees of more than two years’ service (save for certain exceptions) who may have been dismissed without a fair reason or process. Qualifying periods do not apply where you have suffered discrimination or have been a whistleblower and certain other exceptions. 

Unless Order 

This is in formal litigation a requirement to take a step in a court or tribunal claim to avoid a possible sanction from the court or tribunal. For example, unless you disclose documents on a specified date your claim will be struck out (discarded). If you receive an Unless Order you must deal with it immediately. Do not ignore it.   

Victimisation 

This is a form of discrimination where a person is treated unfairly (has suffered a detriment) because they have made a complaint under the Equality Act 2010 or supported another person’s complaint under the Equality Act. Section 27 of the Equality Act covers this form of discrimination. 

Warranty

This is a legal promise made in a legally binding agreement which if broken may entitle the other party to the agreement to bring further action against you. If you are agreeing to a warranty you must check that you can honestly agree to it and that you intend to be bound by it. It is a promise but with the force of law. If you have any doubt about a warranty you are giving you must take legal advice. You should not sign a warranty unless you understand the legal obligations you are agreeing to.   

Whistleblowing 

This is when you raise concerns at work in which you reveal improper activities, for example regarding a criminal offence, breach of legal obligation, or danger to health and safety. If you raise a concern this may amount to whistleblowing (or a protected disclosure). If you raise whistleblowing concerns, it is unlawful for your employer to treat you detrimentally because of this.  There are specific laws to protect you against detrimental treatment and dismissal if you have raised a whistleblowing concern.  

Without admission of liability 

This is an expression widely used by employers even where they are willing to pay compensation or enter into a settlement agreement but where they are not willing to admit any fault. Most negotiated exits and settlements of claims will involve an employer wishing to do a deal on a without admission of liability basis. You should not expect your employer to admit any wrongdoing. 

Without Prejudice 

This refers to off the record/confidential negotiations which cannot later be used or disclosed in legal proceedings. If the parties to a dispute agree to discuss a solution on a Without Prejudice basis, this means that if the parties cannot reach agreement and make a deal those discussions are treated as if they never happened and cannot be referred to in any subsequent legal proceedings. This label is used frequently in relation to negotiations and offers of settlement. 

Witness statement 

This is the evidence put before a court or Employment Tribunal which describes in a person’s own words the course of events that has led to the litigation. A witness statement takes the form of a written statement of facts, in your own words,  made to support a legal case.  Your statement must also be signed and contain a statement of truth. If you sign a statement of truth on a witness statement dishonestly, you will be in contempt of court. It is therefore very important that you review your statement thoroughly before signing, to ensure that its contents is accurate to the best of your knowledge and belief.

Wrongful dismissal 

Wrongful dismissal occurs when an employer does not pay the correct amount or pays no notice pay to a departing employee. This is a breach of contract claim – you have a right to be paid notice (and holiday pay) and can be brought in the Employment Tribunal.  

X v Y
Sometimes in litigation anonymity is required to protect the interests of the parties. This is most common in cases involving sexual impropriety and situations where the identity of a party needs to be protected because of the likely consequences for them if their name is known publicly. Often these cases will be referred to by letters of the alphabet such as A v B or X v Y.

YTD
YTD means Year To Date. The term is used when calculating severance payments, determining bonus payments, how much holiday has been accrued before notice has been given so that it can be used or paid in lieu on termination.

Zero hours contract
A zero hours contract is a casual contract where the worker is not required to commit to certain hours or working days. These contracts can be open to abuse by poor employers but they can also offer flexibility for workers who do not want to be tied to a regular 9 to 5 job.