Employers Update - November 2011
Welcome to Employ! the
monthly employment / HR
newsletter which keeps you
up to date with key
developments.
With
Christmas just a jingle bell
away, we give you our “Five
Festive Tips for Employers”
below which will make sure
that your staff Christmas
party is “merry” rather than
“messy”!
As ever
we welcome your HR questions
for us to answer in our Q&A
section. Please contact any
member of our expanding
employment team should you
need advice.
Key
Employment Team Contacts:
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Christmas Party season
maybe upon us but we all need to remember
that whilst we may relax over a glass or
two, there is no relaxation in the law
regulating our behaviour! However you don’t
need to be Scrooge this festive season, just
simply take reasonable steps to protect your
staff, yourself and your business. Here’s 5
simple tips that will help you to do so:
-
Ensure that staff know
the rules: It is common for a “secret
santa present” to be used as a source of
fun, but perhaps remind colleagues that
if they contribute to the process any
secret gift should not cause offence!
Make sure that staff are aware of what
is expected of them and, in particular
that your bullying and harassment,
disciplinary and grievance policies
still apply to any Christmas fun and any
fall-out.
-
Be wary of providing
unlimited free alcohol or putting your
credit card behind the bar: you may not
expect your staff to stay sober, but
they need to understand that there are
limits, especially since they are still
representing the business during a work
organised event. An email before the fun
gets underway explaining that staff are
expected to drink in moderation and to
behave sensibly will serve as a good
reminder to everyone.
-
Remember your duty of
care: Your duty of care to employees
extends beyond the office when they are
attending work sponsored / organised
parties. Keep one eye out for any
behaviour that is likely to have a
negative impact in the office the next
day (e.g. employees becoming overly
friendly or acting in a way likely to
offend) – the worst thing you want the
morning after is a hangover, not a
harassment complaint from one of your
employees. If someone has had one mulled
wine too many, make sure they are safe
getting home. If possible, sorting out
transport in advance (possibly free) is
a good way of making sure that everyone
stays safe and is not tempted to get
behind the wheel.
-
Maintain
professionalism: The boss is entitled to
let his / her hair down too! But
remember your role as management, lead
by example and as a golden rule, don’t
share anything at the Christmas party
that you wouldn’t ordinarily disclose
during a normal working day!
-
The Christmas bonus:
times are still tough for many
companies, and the business may be
considering whether it can afford the
usual staff Christmas bonus this year.
But before you cut it completely –
beware: if you have been paying it for a
number of years, employees may argue
that it has become a contractual right
through custom and practice. Consider
your position carefully, and if you need
further advice contact us for help!
A recent case has considered what
factors should be taken into account when
deciding whether the provisions of a
disciplinary policy are deemed to form part
of an employee’s contract of employment.
The claimant, a Doctor employed by the
NHS, brought a claim for breach of contract
on the grounds that the manner in which
disciplinary action against her was taken
was in breach of the disciplinary procedure,
which she argued was contractual.
The Tribunal gave some guidelines as to
when a particular provision will have
contractual effect which may include:
- the importance of the provision to
the contractual relationship;
- the level of detail prescribed by
the provision;
- the certainty of what the provision
requires;
- the context of the provision; and
- whether the provision is workable.
In this particular case, taking the above
factors into account, it was held key
provisions of the relevant disciplinary
policy had been incorporated into the
Claimant’s contract of employment and that,
accordingly, the Trust had been in breach of
some of those provisions in the way that it
had dealt with the disciplinary process.
What do I need to know?
We recommend that disciplinary policies
and procedures are kept non-contractual
(i.e. separate from the contract of
employment) for the following reasons:
- If the disciplinary procedure is
contractual and the Employer fails to
follow it to the letter, then the
employee will be able to bring a claim
for breach of contract or wrongful
dismissal. Further, the employee would
be able to bring these claims even if
they do not have the requisite service
to bring an unfair dismissal claim (i.e.
1 year).
- If a disciplinary procedure is
contractual, it is more difficult to
update or amend it as to do so would be
a variation to the employee’s contract
of employment. In that situation in
order to effect the changes, the
employer would need to consult with the
relevant employees and seek their
consent to the proposed amendments.
As such it is advisable to expressly
state within the disciplinary procedure that
it is non-contractual.
Notwithstanding this, the above case
shows that in certain circumstances a
provision in a disciplinary procedure may be
held to form part of the contract depending,
amongst other things, on the weight of its
importance to the working relationship.
During the recession we have seen a
significant rise in the number of claimants
seeking re-instatement or re-engagement as
the remedy sought in the event they are
successful in an unfair dismissal claims.
This perhaps reflects the desperate state of
the job market and also a tactic to apply
additional pressure to settle or obtain an
increased award at Tribunal. It is therefore
no surprise that we are seeing more
decisions come through in relation to these
remedies like this recent redundancy
dismissal case which asked the pertinent
question:-
"If a redundant employee
successfully claims unfair dismissal on
the grounds that the employer failed to
follow a fair process, but the Tribunal
concludes that there was a genuine
redundancy situation, should the
Tribunal still consider awarding a
remedy of reinstatement or
re-engagement?"
A recent case has established that
notwithstanding the fact that there was a
genuine redundancy dismissal, remedies of
reinstatement or re-engagement should still
be considered. This case also established
that in such a case, the vacancies to be
considered should include vacancies that may
have arisen following the date of dismissal
during the period in which the employer
should have been following a fair procedure.
What do I need to know?
One of the key, but very obvious, points
raised by this case is the need for
employers to ensure that they carry out a
fair process in relation to redundancy
dismissals, or, indeed, any other
dismissals.
In a redundancy situation carrying out a
fair process will require informing and
consulting with affected employees (as a
minimum individually, but also where
possible collectively), carrying out a fair
selection process and considering
alternatives to redundancy. Depending on the
number to be made redundant, the employer
may also be legally obliged to follow the
statutory minimum consultation requirements.
This case serves as a warning to show
that, not withstanding the fact that a
dismissal is made genuinely on the grounds
of redundancy, if an employee is able to
show that the dismissal was unfair on
procedural grounds, they may still be
granted re-instatement or re-engagement as a
remedy and this could cause serious
practical difficulties for an employer.
Employers are advised to take legal advice
throughout a redundancy process to reduce
their exposure to claims.
In last months edition of Employ! we
set out details of the government’s ongoing
“Resolving Workplace Disputes” consultation
and the proposed employment law reforms that
this may bring to the benefit of employers,
in particular increasing the eligibility
criteria to claim unfair dismissal from 1
year to 2 years.
This month it has been reported that the
government will now also consult on yet more
employer friendly changes which the
government believes will save them £10m and
employers £40m per annum.
The key points include:
- a consultation on "protected
conversations" -The idea is that
employers should be able to have frank
discussions with their employees on
performance, plans for retirement and
other issues without fear that those
conversations will be used against them
in Tribunal. The prime minister has said
that such conversations should be
available at the request of either the
employer or the employee.
- a "call for evidence" on the length
of time required for a consultation
period on planned redundancies. It is
currently 90 days where more than 100+
staff are at risk of redundancy, but the
government is considering reducing that
to 30 – this would be a massive boost in
the current economic climate and not
only represent massive savings for a
business which is desperate to reduce
overheads quickly but will also
potentially reduce expensive litigation
from Unions and Employees over what the
correct period of consultation should
have been.
- a requirement for all claims to go
to the conciliation service Acas before
reaching employment tribunal – aimed at
freeing up much valuable time. As many
employment tribunal cases settle through
ACAS the hope is that by insisting on
conciliation first less cases will
proceed to the Employment Tribunal.
Whether it has the desired effect
remains to be seen.
- options for a "rapid resolution
scheme" for more simple cases to be
settled within three months
What do I need to know?
This is the latest in a spate of
coalition reports and proposals which aim to
relax “red-tape” employment regulation which
the government believes is inhibiting
employers, in particular small businesses,
and which is ultimately hampering growth.
The protected discussions proposal is hot
on the heels of the recently leaked
“Beecroft Report” which controversially
proposed scrapping the unfair dismissal
regime altogether in relation to
poor-performing employees and instead
proposed a system of “compensated no fault
dismissals”. Under Beecroft’s proposal, an
employer would be able to get rid of an
under-performing employee by simply paying
them their notice pay and a sum equivalent
to a statutory redundancy payment, without
fear that the employee could bring an unfair
dismissal complaint in the Tribunal. Such
proposals were unsurprisingly met with
fierce criticism from employee groups, and
some scepticism as to their viability from
employers.
In any event, the press has now reported
that the government has indicated that
Beecroft’s radical unfair dismissal
proposals will not be implemented. It
appears that the “protected conversations”
proposal is advanced as a less controversial
pro-employer suggestion.
It is not yet clear how the government
intend to consult on its proposals or
whether or when such proposals may be
translated into policy or legislation.
However, clearly these proposals would be
welcomed by employers, but bitterly opposed
by employee groups and unions.
In the meantime, whilst “protected
conversations” is merely a possibility,
Employers should continue to ensure that
they have in place and follow a clear and
fair performance management / capability
process, so that if an employee does bring
an unfair dismissal complaint, they are able
to adequately defend it. If you want to cut
to the chase then you need to call us first
to develop a strategy and script for such a
conversation – where there is a will there
is way!
Most readers will be aware of the rule
that a dismissed employee seeking
compensation in the Tribunal is under a duty
to take reasonable steps to mitigate (i.e.
reduce) their loss by seeking to obtain
alternative employment as soon as possible.
If an employee fails to take steps to
mitigate their loss, then this will affect
the amount of compensation awarded by the
Tribunal for loss of future earnings. This
is borne from the fact that the compensatory
award is intended to compensate an employee,
not to penalise the employer.
Sticking to the theme of
re-engagement/re-instatement in a recent
case, an employer used this remedy, prior to
a claim being brought, as means to
strengthen their position. The case has
established that the duty to mitigate
obliges an employee to consider an offer of
re-engagement in an alternative position
with the respondent employer.
In this particular case the Claimant, as
single mother, was employed by the Ministry
of Defence (MOD). She found it difficult to
reconcile her responsibilities as a single
parent with the duties in her role at the
MOD and resigned. She subsequently brought
successful indirect race and sex
discrimination claims against the MOD.
However, she was not awarded any
compensation in relation to her loss of
earnings. During her notice period, the MOD
had offered her an alternative position
which addressed all of her concerns
regarding childcare (e.g. by ensuring she
would not be sent out on active service for
a number of years and by providing access to
schooling etc). The Claimant unreasonably
rejected this offer of re-engagement and
therefore failed to mitigate her loss.
What do I need to know?
This case highlights that claimant employees
are under a duty to mitigate their loss and
shows the dangers they face in Tribunal if
they unreasonably reject an offer of
re-engagement by an employer.
This case also shows how an employer may
be able to reduce its liability and the risk
of a large compensation award being made
against them if they are able to make a
reasonable offer of re-engagement or another
alternative to the “wronged” employee.
This potential to reduce liability needs
to be balanced against the fact that there
will be circumstances in which it entirely
reasonable for an employee to reject an
offer of re-engagement (for example, if the
employee has resigned following direct
discrimination or harassment by the
employer. In such a situation it would be
foreseeable that an employee may not wish to
be re-engaged with that business).
In our August edition of Employ! we
reported a decision where an employee who
had been absent on sick leave and who had
accrued holiday leave was entitled to take
that leave (or payment for it upon
dismissal) notwithstanding the fact that she
had not made a formal request to take the
leave in accordance with the Working Time
Regulations.
A recent decision has now been made in
direct conflict to that earlier case and
which may signal some good news for
employers on this ever-developing topic!
In this recent case before the EAT, an
employee had been on long-term sick for
three years, before being dismissed. On the
termination of her employment, she was paid
for her accrued but untaken holidays in
respect the most recent year of absence. She
then subsequently brought a tribunal claim
for her statutory holiday entitlement for
the two previous years of absence.
What do I need to know?
In light of the now well recited case
law in this area, there was no doubt that
the employee had accrued statutory holiday
entitlement during her sickness absence.
However, the EAT held that in order to be
paid for holiday under the Working Time
Regulations, an employee must give the
required statutory notice of their intention
to take that holiday during the relevant
leave year.
In this case the employee had not done so
and she therefore lost her right to take or
be paid for holiday in the initial two years
of sickness absence.
The EAT commented that the situation
would have been different if the employee
had, during those two initial years of
absence, made a request to take her
statutory holiday at a time after she had
recovered from her ill health (i.e. upon her
return to work). Had she done so, upon her
dismissal she may have been entitled to a
payment in lieu of the holidays requested in
those previous years. But she had failed to
do so and was not therefore entitled to any
payment.
Although this case will be welcomed by
employers, it is in direct conflict to the
decision earlier this year. Unfortunately,
until this conflict is resolved by the
Tribunals, employers would not be advised to
rely blindly on this further decision when
dealing with requests for annual leave from
sick employees.
Taylors’ advice remains the same – where
possible encourage those on sick pay to use
their accrued annual leave!
Q. Is it possible to carry out a
disciplinary process fairly if an employee
is off on long-term sick and unable to
attend the office for investigations and
hearings etc?
A. At a most simplistic level the answer
to this question is yes, it is possible to
discipline, and even dismiss someone, while
they are on long-term sick. However, the
method of doing so fairly and minimising the
risk of a successful claim (be it for unfair
dismissal or disability discrimination) will
vary depending on the specific facts of the
case.
In some cases, where it looks possible
that the employee will be returning to work
at some point in the near future it may,
depending on the circumstances of the
disciplinary case, be reasonable to delay
the disciplinary process until their return.
However, in other circumstances where a
return seems unlikely for a prolonged period
of time and more pressing disciplinary
action is deemed necessary, then it may be
reasonable for an employer to take action
despite an employee’s absence and to make a
decision on the information available to
them.
Overall the important thing to remember
is that, as with any other disciplinary
process or dismissal, you must follow a fair
procedure and this should always include a
full and proper investigation, an
opportunity for the employee to state their
case and an opportunity for them to appeal
the decision should they wish to do so.
It is likely to be necessary to make some
adjustments to allow this process to be
carried out. Such adjustments may include
the following:
- Arranging meetings to be held
remotely, by telephone or other remote
conferencing (if an employee is well
enough to participate in this manner);
- Allowing a family member or a friend
to be present at any hearing or meeting
or to assist with the process overall;
- Allow submissions in writing – this
ensures that the employee has been given
an opportunity to state their case
before action is taken;
- Being particularly flexible
regarding timescales of the disciplinary
process – for example giving the
employee a longer period of time than
would usually be given to lodge any
appeal.
Overall it is a question of
reasonableness and if you can show that you
have considered alternatives and made
reasonable adjustments to carry out a fair
process then this will help minimise the
risk of a successful claim being made.
Copyright 2006 - 2011 Taylors Solicitors
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