Employment Rights Act 1996, section 203

Restrictions on contracting out

Part XIII Miscellaneous

(1)Any provision in an agreement (whether a contract of employment or not) is void in so far as it purports—

(a)to exclude or limit the operation of any provision of this Act, or

(b)to preclude a person from bringing any proceedings under this Act before an [F1029employment tribunalF1029] .

(2)Subsection (1)—

(a)does not apply to any provision in a collective agreement excluding rights under section 28 if an order under section 35 is for the time being in force in respect of it,

(b)does not apply to any provision in a dismissal procedures agreement excluding the right under section 94 if that provision is not to have effect unless an order under section 110 is for the time being in force in respect of it,

(c)does not apply to any provision in an agreement if an order under section 157 is for the time being in force in respect of it,

(d)F1030. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(e)does not apply to any agreement to refrain from instituting or continuing proceedings where a conciliation officer has taken action under [F1031any of sections 18A to 18CF1031] of [F1029the M56Employment Tribunals Act 1996F1029] , and

(f)F1032does not apply to any agreement to refrain from instituting or continuing . . . any proceedings within

[F1033 the following provisions of section 18(1) of the Employment Tribunals Act 1996 (cases where conciliation available)—

(i)

[F1034 paragraph (b)F1034] (proceedings under this Act),

(ii)

[F1035 paragraph (l)F1035] (proceedings arising out of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000),F1033] if the conditions regulating [F1036settlementF1036] agreements under this Act are satisfied in relation to the agreement

(iii)

[[F1037,F1038 paragraph (m)F1038] (proceedings arising out of the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002),

(iv)

F1039 ...F1037]

(3)For the purposes of subsection (2)(f) the conditions regulating [F1036settlementF1036] agreements under this Act are that—

(a)the agreement must be in writing,

(b)the agreement must relate to the particular [F1040proceedingsF1040] ,

(c)the employee or worker must have received [F1041advice from a relevant independent adviserF1041] as to the terms and effect of the proposed agreement and, in particular, its effect on his ability to pursue his rights before an [F1029employment tribunalF1029] ,

(d)there must be in force, when the adviser gives the advice, a [F1042contract of insurance, or an indemnity provided for members of a profession or professional body,F1042] covering the risk of a claim by the employee or worker in respect of loss arising in consequence of the advice,

(e)the agreement must identify the adviser, and

(f)the agreement must state that the conditions regulating [F1036settlementF1036] agreements under this Act are satisfied.

[F1043 (3A)A person is a relevant independent adviser for the purposes of subsection (3)(c)—

(a)if he is a qualified lawyer,

(b)if he is an officer, official, employee or member of an independent trade union who has been certified in writing by the trade union as competent to give advice and as authorised to do so on behalf of the trade union,

(c)if he works at an advice centre (whether as an employee or a volunteer) and has been certified in writing by the centre as competent to give advice and as authorised to do so on behalf of the centre, or

(d)if he is a person of a description specified in an order made by the Secretary of State.

(3B)But a person is not a relevant independent adviser for the purposes of subsection (3)(c) in relation to the employee or worker—

(a)if he is, is employed by or is acting in the matter for the employer or an associated employer,

(b)in the case of a person within subsection (3A)(b) or (c), if the trade union or advice centre is the employer or an associated employer,

(c)in the case of a person within subsection (3A)(c), if the employee or worker makes a payment for the advice received from him, or

(d)in the case of a person of a description specified in an order under subsection (3A)(d), if any condition specified in the order in relation to the giving of advice by persons of that description is not satisfied.

( 4 ) In subsection (3A)(a) “qualified lawyer” means—

(a)as respects England and Wales, [F1044 a person who, for the purposes of the Legal Services Act 2007, is an authorised person in relation to an activity which constitutes the exercise of a right of audience or the conduct of litigation (within the meaning of that Act), andF1044]

(b)as respects Scotland, an advocate (whether in practice as such or employed to give legal advice), or a solicitor who holds a practising certificate.F1043]

[F1045 (5)An agreement under which the parties agree to submit a dispute to arbitration—

(a)shall be regarded for the purposes of subsection (2)(e) and (f) as being an agreement to refrain from instituting or continuing proceedings if—

(i)the dispute is covered by a scheme having effect by virtue of an order under section 212A of the Trade Union and Labour Relations (Consolidation) Act 1992, and

(ii)the agreement is to submit it to arbitration in accordance with the scheme, but

(b)shall be regarded as neither being nor including such an agreement in any other case.F1045]

Definitions used in section 203 13

contract of employment

(2) In this Act “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.

Defined in s.230(2) · see it in the full Act
employment

(5) In this Act “employment”—

(a)in relation to an employee, means (except for the purposes of section 171) employment under a contract of employment, and

(b)in relation to a worker, means employment under his contract;

Defined in s.230(5) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act
collective agreement

“collective agreement” has the meaning given by section 178(1) and (2) of the Trade Union and Labour Relations (Consolidation) Act 1992 ,

Defined in s.235(1) · see it in the full Act
dismissal procedures agreement

“dismissal procedures agreement” means an agreement in writing with respect to procedures relating to dismissal made by or on behalf of one or more independent trade unions and one or more employers or employers’ associations,

Defined in s.235(1) · see it in the full Act
conciliation officer

“conciliation officer” means an officer designated by the Advisory, Conciliation and Arbitration Service under section 211 of that Act ,

Defined in s.235(1) · see it in the full Act
action

“act” and “action” each includes omission and references to doing an act or taking action shall be construed accordingly,

Defined in s.235(1) · see it in the full Act
employee

(1) In this Act “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.

Defined in s.230(1) · see it in the full Act
worker

(3) In this Act “worker” (except in the phrases “shop worker” and “betting worker”) means an individual who has entered into or works under (or, where the employment has ceased, worked under)—

(a)a contract of employment, or

(b)any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual;

Defined in s.230(3) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act
independent trade union

“independent trade union” means a trade union which—

(a)

is not under the domination or control of an employer or a group of employers or of one or more employers’ associations, and

(b)

is not liable to interference by an employer or any such group or association (arising out of the provision of financial or material support or by any other means whatever) tending towards such control,

Defined in s.235(1) · see it in the full Act
trade union

“trade union” has the meaning given by section 1 of the Trade Union and Labour Relations (Consolidation) Act 1992 ,

Defined in s.235(1) · see it in the full Act
employed

and “employed” shall be construed accordingly.

Defined in s.230(5) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act
act

“act” and “action” each includes omission and references to doing an act or taking action shall be construed accordingly,

Defined in s.235(1) · see it in the full Act
employer

(4) In this Act “employer”, in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.

Defined in s.230(4) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act

Cases considering section 203 53

Uber BV and others v Aslam and others

[2021] UKSC 5 · 19 February 2021Disapplies

The Court interpreted the prohibition on contracting out as invalidating provisions objectively directed to excluding or limiting statutory protection, whether directly or indirectly through contractual characterisation of the relationship. (see paras [79]-[82])

Irwell Insurance Company Ltd v Watson & Ors

[2021] EWCA Civ 67 · 22 January 2021Limits

Limits contracting out of employment rights. The provision prevents an arbitration clause from excluding or limiting the right to bring an unfair dismissal claim in the Employment Tribunal (see paras [47]-[48]).

Aviva Investors Ground Rent GP LTd & Anor v Williams & Ors

[2021] EWCA Civ 27 · 18 January 2021Interprets

The court treated the provision as an analogous example of statutory invalidation operating on the effect and enforceability of an agreement rather than its form, preserving contractual claims while excluding unlawful statutory compromises. (see para [31]) The court relied on the subsection’s partial-invalidity wording to support enforcing the lawful remnant of an agreement after statutory claims were excluded. This reinforced the substance-over-form approach to section 27A(6). (see para [31])

33 more judgments, and what each says about section 203, are in the case-law panel in the full Act.

Amendments and notes

23 notes from legislation.gov.uk

Amendments

  1. F1029Words in s. 203(1)(b)(2)(e)(f)(3)(c) substituted (1.8.1998) by 1998 c. 8, s. 1(2)(a)(c) (with s. 16(2)); S.I. 1998/1658, art. 2(1), Sch. 1
  2. F1030S. 203(2)(d) omitted (1.10.2002) by virtue of The Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (S.I. 2002/2034), reg. 11, Sch. 2 Pt. 1 para. 3(17)(a) (with regs. 13-20 and subject to transitional provisions in Sch. 2 Pt. 2)
  3. F1031Words in s. 203(2)(e) substituted (6.4.2014) by Enterprise and Regulatory Reform Act 2013 (c. 24), s. 103(3), Sch. 1 para. 10; S.I. 2014/253, art. 3(f) (with art. 5(1))
  4. F1032Words in s. 203(2)(f) repealed (1.8.1998) by 1998 c. 8, s. 15, Sch. 2; S.I. 1998/1658, art. 2(1), Sch. 1
  5. F1033Words in s. 203(2)(f) and s. 203(2)(f)(i)(ii) substituted for words in s. 203(2)(f) (1.5.2001) by S.I. 2001/1107, reg. 3
  6. F1034Words in s. 203(2)(f)(i) substituted (6.4.2014) by The Employment Tribunals Act 1996 (Application of Conciliation Provisions) Order 2014 (S.I. 2014/431), art. 1, Sch. para. 4(a)
  7. F1035Words in s. 203(2)(f)(ii) substituted (6.4.2014) by The Employment Tribunals Act 1996 (Application of Conciliation Provisions) Order 2014 (S.I. 2014/431), art. 1, Sch. para. 4(b)
  8. F1036Word in s. 203(2)(f)(3) substituted (29.7.2013) by Enterprise and Regulatory Reform Act 2013 (c. 24), ss. 23(1)(b), 103(3); S.I. 2013/1648, art. 2(c); S.I. 2013/1648, art. 2(c)
  9. F1037S. 203(2)(f)(iii)(iv) inserted (1.10.2002) by The Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (S.I. 2002/2034), reg. 11, Sch. 2 Pt. 1 para. 3(17)(b) (with regs. 13-20 and subject to transitional provisions in Sch. 2 Pt. 2)
  10. F1038Words in s. 203(2)(f)(iii) substituted (6.4.2014) by The Employment Tribunals Act 1996 (Application of Conciliation Provisions) Order 2014 (S.I. 2014/431), art. 1, Sch. para. 4(c)
  11. F1039S. 203(2)(f)(iv) omitted (6.4.2014) by virtue of The Employment Tribunals Act 1996 (Application of Conciliation Provisions) Order 2014 (S.I. 2014/431), art. 1, Sch. para. 4(d)
  12. F1040Word in s. 203(3)(b) substituted (1.8.1998) by 1998 c. 8, s. 15, Sch. 1 para. 24(2); S.I. 1998/1658, art. 2(1), Sch. 1
  13. F1041Words in s. 203(3)(c) substituted (1.8.1998) by 1998 c. 8, s. 9(1)(2)(e); S.I. 1998/1658, art. 2(1), Sch. 1
  14. F1042Words in s. 203(3)(d) substituted (1.8.1998) by 1998 c. 8, s. 10(1)(2)(e); S.I. 1998/1658, art. 2(1), Sch. 1
  15. F1043S. 203(3A)(3B)(4) substituted for s. 203(4) (1.8.1998) by 1998 c. 8, s. 15, Sch. 1 para. 24(3); S.I. 1998/1658, art. 2(1), Sch. 1
  16. F1044Words in s. 203(4)(a) substituted (1.1.2010) by Legal Services Act 2007 (c. 29), ss. 208(1), 211(2), Sch. 21 para. 120 (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(h) (with art. 9)
  17. F1045S. 203(5) inserted (1.8.1998) by 1998 c. 8, s. 8(5); S.I. 1998/1658, art. 2(2), Sch. 1

Modifications

  1. C203S. 203 applied (1.7.2000) by S.I. 2000/1551, reg. 9
  2. C204S. 203 applied (with modifications) (1.10.2002) by The fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (S.I. 2002/2034), reg. 10 (with regs. 13-20)
  3. C205S. 203 applied (with modifications) (6.4.2006 with application in accordance with reg. 21(1) of the amending S.I.) by The Transfer of Undertakings (Protection of Employment) Regulations 2006 (S.I. 2006/246), regs. 1(2), 18
  4. C206S. 203 applied (1.10.2011) by The Agency Workers Regulations 2010 (S.I. 2010/93), reg. 15
  5. C207S. 203(1)(2)(e)(f)(3)(4) amended (4.9.2000) by 1999 c. 26, s. 14(a); S.I. 2000/2242, art. 2

Marginal citations

  1. M561996 c. 17.