Extending a Service Contract

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					Compandben SA                                                                                France and UK




                                                      Market Conditions Summary - UK
                            LAW                                                              MARKET PRACTICE



Recruitment and
Contract                                                                                     Normally three months
                                                                                             Often the possibility of extending probationary period is written into the
Probationary Period                                                                          contract.
Probationary Period
Extension                   up to 2 years service= 1 weeks notice.
                            Up to 12 years service 2 weeks notice plus one weeks notice      in practice 1 months notice for non managerial posts and 3 months for
                            for every year of service up to a total of 12 weeks notice for   management.There is a tendency for longer notice periods to be granted in
Notice Period               12 weeks service.                                                certain industries.
Notice Period 2
Notice Period 3
                            fixed term contract employees now immediately eligible for
                            accrued vacation and sick pay rights.Fixed term contracts of 2
                            yrs+ can include a clause waiving the employees right to
                            redundancy pay. Fixed term contracts can still be renewed
                            provide the intent is not abusive. Fixed term contracts can    In practice fixed term contracts still very popular because of the
                            have a notice period inserted so the employee does not have redundancy waiver clause- but note there is no longer a waiver of unfair
Notice Period 4             to be paid for the full fixed term.                            dismissal.

                            Contract or "statement of employment" must be in writing and
                            must say name and address of employer+employee/date of
                            hire/salary/location of job/job title/working hours/vacation and
                            holiday entitlement/notice period/sick pay provision/any trades
                            union agreements/any employee handbook which is a part of
                            the contract/and whether service with anyother employer is to In practice the job offer can refer to a terms and conditions document to
Fixed Term Contract         be counted/grievance procedure.                                   cover some of the heavier sections .
Retirement Age                                                                             65 60 is frequent

Employment Conditions
                            48 hours maximum working time -but this can be waived if the     40 hours including an hour for lunch is basic with some employers going to
Working Hours               employee agrees.                                                 37.5 hours.
                            employees are entitled to 4 weeks vacation under the
                            European Working Time Directive which the UK has signed          22 to 24 days is the norm If employee sick on vacation normally vacation
Vacation                    up to                                                            would be extended if a "sick note" produced
Special Leave               no legal provision for special leave.                            At least a day for each event would be normal
Birth of Child
Death of Spouse or child
Death of Father or Mother
Marriage
Marriage of a child
others




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Compandben SA                                                                                 France and UK




                                                     Market Conditions Summary - UK
                           LAW                                                                MARKET PRACTICE


                           Christmas Day/Boxing Day/New Years Day/Good
                           Friday/Easter Monday/May Bank Holiday/Spring Bank
Public Holidays            Holiday/Summer Bank Holiday/=9                                     The Queen's jubilee will be a holiday in 2002
                           18 weeks paid statutory maternity leave to begin up to 11
                           weeks before the expected date of birth.Ladies must have 26
                           weeks of continuous employment by 15 weeks prior to                employers can reclaim 92 % of the maternity pay.Extended maternity leave
                           expected birth. Ladies who do not qualify for statutory grant      is available to employees who have 1 years service by the 11th week
Maternity leave            receive a maternity allowance direct from the State.               before the expected birth.
                           provided 1 year of service with a company a parent has the
Paternity and Parental     right to 13 weeks unpaid leave. A recent law has given
Leave                      Fathers the right to 2 weeks paid peternity leave.
Unpaid leave               no statutory provision                                             no pattern

Remuneration
Bonus                      no acquired rights in bonus allocation
                                                                                              12 months salary is usual with some companies giving a Christmas bonus
Months of salary payment   no legal provision                                                 of two weeks salary

Social Coverage

                           Employers now must pay up to 28 weeks of illnes in any year
                           (tax year April- March) The rate of pay is a minimum of £62.20
Payment of salary after    per week and employers may reclainm this if it reaches 13%
accident or sickness       of total national insurance contributions in a month.              Most employers give at least 6 months sick pay .
Life insurance             no legal provision                                                 varies between 2 x salary and 4 x salary
Military Service           no statutory military service                                      no statutory military service
                           Not contracted out =Employer Contribution of 12.8% on all
                           salary over UK£ 4628 PA                      contracted out with
                           a final salary pension= 9.3%of salary from £4628 to £30940
                           and 12.8% for all salary above £30940 p.a.
                           contracted out with a defined contribution system= 11.8% of        From April 1 2003 employers will pay 12.8% on all income over £4628,
                           salary between £4628 and 30940 and 12.8% for all salary            employees will pay 11% there will be a supplement of 1% payable by the
                           above 30940 p.a.                                                   employer and employee on salaries over £30,429                              30420
Social Insurance
                           "Stakeholder pensions" have to be offered to employees if a        Defined benefit systems usually based on 1/40th of a years salary x no of
                           company is of 5 employees or over and does not have a              years of service now being replaced by defined contribution systems at 5%
Early retirement           pension plan.                                                      contribution employee and 9-10 % employer
Pension                    As detailed above                                                  As detailed above
Principle of the pension
arrangements               As detailed above                                                  As detailed above
Contributions              no specific legal requirement except for accidents at work         accident insurance typically covered as part of pension plan




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Compandben SA                                                                                 France and UK




                                                       Market Conditions Summary - UK
                              LAW                                                             MARKET PRACTICE


                                                                                              In practice many employers of executives provide also a privat health
                              National insurance payments mentioned above include             facility to enable employees to have an alternative to the National Health
Accident Insurance            funding for the lhealth service.                                Service
Health Insurance              tehnically included in the national insurance coverage          rarely found in private insurance coverage
                                                                                              pension plans and private health coverage may include these clauses to
Long Term Care Insurance      included in the national insurance coverage                     cover accidents and disability
Disability Insurance          paid through bank account usually of mother                     nothing to do with employer
Child Allowance
SOCIAL INSURANCES             covered in national insurance payments                          covered in national insurance payments
Old age and surviving
dependents insurance
(AVS), Disability insurance
(AI), Loss of earnings
insurance (APG)               covered in national insurance payments                          covered in national insurance payments
Unemployment insurance
(AC)                          covered in national insurance payments                          covered in national insurance payments
Unemployment insurance
(AC) 2                        covered in national insurance payments                          covered in national insurance payments
Professional and non-
professional accident
insurance                     covered in national insurance payments                          covered in national insurance payments
Loss of earnings insurance
for sickness                  covered in national insurance payments                          covered in national insurance payments
Health Insurance              See sample charges spreadsheet

Indemnities
                                                                                              typical negotiated executive settlements are at around one month per year
                              Redundancy payments are one weeks pay per year of service       of service with a tendency to cap payments at a years salary. The
                              from 22 to 40 years of age then 1.5 weeks per year of service   employee must be given the opportunity to discuss the proposal with his
                              from 41 to 64 years of age. This is capped at a salary of       legal advisor and the legal advisor has to sign to say it has been reviewed-
                              £12400 and maximum is £7200. If a severance is found not to     normally the company pays for this service . Compensatory payments used
                              be redundancy but unfair the employee can be reinstated or a    to be around £ 12000 so employers would typically add redundancy
                              payment of redundancy pay as above can apply plus a             payment and compensation together and propose about £20,000. However
                              compensation" of up to £52,000 though there is no legal limit   this has now had to beome more generous as the courts have given larger
Termination Indemnities       especially if racial or age/sex discrimination is suspected.    commpensatory payments.




3                                                                           53205f19-d74c-48cd-9faf-335ab7886f7f.xls2/1/2011
Compandben SA                                   France and UK




                      Market Conditions Summary - UK
                LAW                             MARKET PRACTICE




4                              53205f19-d74c-48cd-9faf-335ab7886f7f.xls2/1/2011

				
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