Employment Glossary

What do these terms mean?

Part-time job – working week less than 30 hours per week.

Full-time job – working week over 30 hours per week.

Temporary job – contract is for a fixed period only.

Permanent job – contract is continued until either you or the employer terminates it.

Self-employed – there is no legal definition, however you will usually be self-employed if you: run your own business and are responsible for it’s success or failure; have several customers at the same time; are able to decide how, when and where you do your work; are able to hire other people to do the work for you at your expense; provide the main tools and equipment to do the work.

Employee – there is no legal definition, however you will usually be employed if you: have to do the work yourself; work for one person at a time who is in charge of what you do; can be told how, when and where to do your work; have to work a set amount of hours; are paid a regular amount according to the hours you work and for working over-time. Even if you only work casual hours or part-time work you can still be employed.

Contract – the agreement setting out the expectations that the employer will have of you such as working times, breaks, place of work, items which can be claimed on expenses, holidays per year etc. and what your employer must adhere to during your employment.

Verbal Contract – you may carry out your duties without a written contract, in which case employment law dictates that you and your employer should conduct yourselves in a ‘reasonable’ manner, and that you should expect to continue your employment in the same conditions you have been exposed to for at least the past three months.

Health and Safety – A business with 5 or more employees (including Managing Directors) must have a written Health and Safety Policy which is a statement setting out how the company will manage health and safety issues. Employees must have access to a copy of this document.

Minimum Wage – (at 1st October 2009) Under 18 = £3.57 per hour. 18-21 inclusive = £4.83 per hour. 22 and over = £5.80 per hour.

Minimum Wage – (at 1st October 2010) Under 18 = £3.64 per hour. 18-20 inclusive = £4.92 per hour. 21 and over = £5.93 per hour.

PAYE – (Pay As You Earn) is the system used to calculate Income Tax and National Insurance contributions (NICs) from employees’ pay as they earn it. The term ’employee’ in this guide includes directors of limited companies.

National Insurance – Employers are responsible for calculating, deducting and paying Class 1 primary NICs (employees’ contributions) on behalf of all employees earning above the earnings threshold. These must be deducted from their earnings and shown on pay slips.

Form P45 – P45 form is a record of the pay, tax and national insurance which has been paid to an employee since the start of the tax year. It is issued to an emlpoyee by an employer when they leave a job. You will need to provide your new employer with your P45 when you start a new job.

Form P46 – P46 form is used by an employer if a new employer does not have a P45. This could be because the employee has not been employed before, or their previous employer did not provide a P45.

Form P60 – P60 form is a summary of the pay, tax and national insurance which has been paid during the tax year (which runs from 6th April to 5th April the following year). You may require this as proof of your income if you apply for a loan or mortgage.

Trade Union – an organization of workers that have joined together to achieve common goals such as better working conditions by negotiating labour contracts with employers. Some unions are recognised by employers, others are not.