What is the difference between contractual and statutory employment rights?

Employees possess rights that connect in some way to their relationship with employers. Some of these may be set out in your contract of employment, while others exist 'by statute', which means you're legally entitled to enjoy these rights, regardless of what your contract of employment says.

What is a contractual right?

A contractual right is an entitlement set out in the terms of your employment contract and are legally binding upon agreement. In most cases, contractual rights will be set out in writing in your employment contract, though some can be implied, either by industry standards or by common practice in the company (for example, if your company has regularly allowed employees to finish half an hour early on a Friday, this may become an implied contractual right).

What is a statutory right?

A statutory right – one given ‘by statute’ – is a right that is guaranteed by law. Statutory rights have been established by legislation and cannot be overruled, undone or reduced in any way by a contract, waiver or agreement, regardless of this document has been signed.

Statutory rights set the minimum level of entitlement or protection employees should be granted by their employer, and all employers are legally obligated to comply.

Can contractual and statutory rights overlap?

Yes, there can be an overlap of statutory and contractual rights. This is because, while statutory rights set the minimum legally acceptable level of entitlement, the terms of your contract may include more generous entitlements.

Common examples of this include notice periods and holiday allowances. For instance, the legal minimum notice period for employees who have been employed for more than one month but less than two years is one week, though many employers establish a month notice period in their employment contracts.

Similarly, statutory holiday allowance for almost all employees working full-time is 28 days, inclusive of bank holidays. Your employment contract may entitle you to more than this, and many employers don’t include bank holidays in their holiday allowances, instead choosing to add these on top of your contractual entitlement.

What are my contractual rights?

A contract of employment is an agreement made between an employer and an employee. The agreement can be a verbal or a written one. Contractual rights derive from your contract of employment, but they don't necessarily have to have been stated in writing in your contract or even verbally by your employer.

Contractual rights will usually include express rights such as:

• the right to payment of specified salary
• the right to holiday entitlement
• the right to notice of termination of employment

Your implied rights include the right to be treated in a manner consistent with mutual trust and confidence. However, sometimes contractual rights also arise from 'custom and practice' as well as what's written into your contract. For example, if the place you work has finished half an hour early on a Friday for many years, it might be argued that this now forms part of the terms and conditions of your employment.

What are common law rights?

Employers have a duty of care to their employees. If employers breach their duty of care, it can give employees a claim under the law of negligence. The most common example of this in the employment context is when personal injury claims arise because your employer failed in their duty of care to protect you from dangerous working practices, machinery or substances.

What are my statutory rights?

These are rights that are given to employees by Parliament and set out in primary or secondary legislation. They include the following:

• The right not to be unfairly dismissed. This is usually only available to employees with at least two years' service.
• The right to a statutory redundancy payment. This is only available to employees with at least two years' service.
• The right not to suffer unauthorised deductions from wages.
• The right not to be discriminated against. Discrimination on the grounds of nine protected characteristics is prohibited: sex, maternity, marital status, gender reassignment, race, religion, disability, sexual orientation and age.
• The right to receive the minimum wage.
• Protection against unfair treatment or dismissal for whistleblowing, trade union membership or union activities.
• Various maternity and paternity rights.

In certain cases, rights that are covered by contractual as well as by statutory rights will overlap. For example:

• Some employees may have the benefit of a contractual period of notice that's longer than the statutory minimum period of notice
• Some employees may have the benefit of a contractual holiday entitlement that's more generous than the statutory minimum period of holiday
• The law entitles employees to a statutory minimum redundancy payment if they're made redundant, and there's a statutory formula for calculating it, but some employees may be entitled to a contractual redundancy payment based on a more generous formula

While this is intended to be a simple guide, these can be legally complex issues. If you believe that your contractual or statutory rights are being breached by your employer, talk to one of our experienced employment law solicitors.