Pension Auto-Enrolment for SMEs

SMEs are starting to face staging dates in 2014 and with tens of thousands of such employees needing to put pensions into place, there are very real fears that pension providers will not have the capacity to help every business so that some face the risk that they will not have a pension scheme in place in time.

There is also anecdotal evidence that some pension providers are stating that they will not provide pensions unless employers agree to giving higher contributions to employees so that the pension pots are more attractive for the pension providers to work with. This seems a timely call to action for employers that the reforms have arrived and that it is important to start addressing the issues as soon as possible.

Emma Swan, Senior Associate at Taylors, recently attended a seminar held by Taylor Patterson hosted by the East Lancashire Chamber of Commerce where James Thompson, Director of Taylor Patterson, recognised that, “Although smaller firms think they are ready for the new rules, our research shows that the majority have not considered the key issues. Many SMEs do not have the back office support to cope with this additional piece of red tape and we can support them to make things easier and enable UK entrepreneurs to get on with running and growing their businesses”. Taylor Patterson’s experience so far under the new regime is that a business realistically needs 12 months to plan for their staging date but it’s not too late if you are past that point but you must act now!

As well as SMEs needing to start looking at their pension arrangements in readiness for their staging date and working with preferred pension providers to set those schemes up, employers also need to realise that there are employment law implications as there are likely to be changes to employees’ contracts of employment that need to be addressed with employees and documented, together with potential obligations to formally consult with employees on the pension changes.

SMEs can take some comfort from the Government’s recent announcement that it will relax rules for SMEs for pension auto-enrolment. Under the changes, employers will now have six weeks to auto-enrol new staff, while the deadline for employers to provide information to individuals on their joining rights has also been extended to six weeks.

This move recognises pressure on smaller employers as their staging dates near.

If you are beginning to or have begun to review your businesses’ position and have questions both in respect of the pension scheme provisions you are going to put in place and how this will impact on your staff, then please contact us if you would like to discuss them with us.

Employment Tribunal Fees – Statistics

The first indications of the impact of fees are starting to come through. Statistics have now been published by the Ministry of Justice for the number of Employment Tribunal claims received between July and September 2013.

The normal monthly ‘average’ is 17,000 claims received each month. In June 2013, there were 25,000 receipts and a further 17,000 in July. These are doubtless explained by the ‘cluster’ effect of people lodging their ET1s before fees were introduced on 29 July 2013. In August, there were 7,000 receipts; in September, 14,000 – hardly different from the historic monthly average of 17,000 and inevitably, still affected by the pre-July cluster.

However, the statistics do suggest a substantial drop in the number of single, as opposed to multiple, claims lodged in September.

We would also flag up that these figures do not include ET1s lodged in August/September which are still sitting in the Leicester processing centre, awaiting payment of fees or a decision about remission – so the true number of ET1s lodged during these two months will be higher. It still remains to be seen whether the Government’s objective of reducing claims being brought by introducing fees will be realised!

What is a BYOD Policy When it’s at Home?

It’s a Bring Your Own Device policy!

BYOD is a practice that allows employees to use personal mobile devices, such as smartphones, tablets and laptops, for business purposes. Many employers are attracted to allowing employees to use their own devices because it means they are able to work longer hours by interacting with the company’s IT systems outside of normal work hours.

However, it is important as an employer that you are not lulled into a false sense of security. There are both legal and commercial risks that arise with BYOD and we would urge you to consider the issues carefully before allowing the practice and implementing a policy to manage it if you chose to take this route.

Whenever there are new access routes to data, there are inevitably new security concerns and BYOD is no exception to this. As well as concerns associated with the loss or leaking of commercially-sensitive data, employers also have legal responsibilities around the security of certain data under the Data Protection Act 1998. The Information Commissioner’s Office has made it clear that these responsibilities apply “regardless of the ownership of the device used to carry out the processing”.

Employee responsibilities should be carefully addressed in a BYOD policy. Issues around misconduct, discrimination and confidentially that may arise where there is improper use of an employer’s IT systems are usually already addressed in an employer’s IT policy. However, a BYOD will need to consider further issues.

So what can you do to help control some of the risks and develop a BYOD policy? Here are some of the points that you should consider:

• You should review your systems and take steps to minimise vulnerabilities before allowing the widespread use of personal devices.
• You should also vet the types of devices that you allow your employees to use and employees should only be allowed to use devices that are secure.
• Any BYOD policy will need to make it clear that any work data will remain the employer’s property. The policy should also include a requirement that the employer’s data be deleted from a device if an employee either resigns or is dismissed.

One of the risks around BYOD is that it may be more difficult to detect or demonstrate that an employee has taken or misused commercially-sensitive information. The policy should include a requirement for the employee to hand over any personal device that has been used to access the employer’s information as and when an employee resigns or is dismissed so that the employer can check whether confidential information has been properly and permanently deleted.

It is also important that, in order to enforce the BYOD policy, you are able to demonstrate that your employees were aware of the policy and they accepted the terms.

If your business encourages BYOD or is looking to introduce it, then please contact us if you have any questions arising out of this briefing.

Case report - Is an employer’s failure to pay for medical treatment discriminatory under the Equality Act 2010?

In a recent Employment Appeal Tribunal (“EAT”), they found that it was discriminatory and that the employer had failed in its duty to make reasonable adjustments for a disabled employee suffering from depression when it did not act on a doctor’s recommendation to pay for private psychiatric services.

The EAT said that such adjustments were job-related on the basis that the payments were not for “private medical treatment in general but rather payment for a specific form of support to enable the claimant to return to work and cope with the difficulties she had been experiencing at work”.

Furthermore, although the medical advice only gave the treatment a 50% chance of success, the doctor thought that it would certainly lead to a significant improvement in the claimant’s depression. On that basis, the EAT held that such adjustments were reasonable because they would mitigate the effect of the provision, criterion or practice (“PCP”).

There are a number of learning points from this case. As an employer, you should:

• Examine the extent of any recommended reasonable adjustments from doctors or other medical practitioners, including costs and the impact on the working environment.
• Focus on the actual steps recommended and how this will reduce the disadvantage.
• Conduct an assessment in consultation with the disabled person and implement any adjustments necessary in a timely fashion (neither of which had happened in this case).

There is no defence that failing to comply with the duty to make reasonable adjustments can be justified. The question for a Tribunal is whether a step taken by an employer is reasonable. This is a particularly complex area with the added complication that an individual can bring whilst still being an employee of your business; we would urge you to take advice before acting – or indeed choosing not to act!

Your Questions Answered

Here’s a question raised with us recently by a reader of Employ!

“I’m the Managing Director of an SME with employees based across three locations; we also have sales representatives who work mainly from home. The business is heavily reliant on its IT and communications systems for not only bringing new work to the business but also interacting with our customers and managing their orders.

Although I’ve invested in putting in place contracts of employment and have introduced restrictive covenants in the sales representatives’ contracts, I’m concerned that our business may be exposed if employees misuse and abuse the systems.

So I’m considering starting to monitor the use of IT and communication systems, but I don’t know if this is something that I am legally allowed to do – what is your advice?

We understand the reasons why you would like to consider implementing monitoring of employee IT and communications systems - and there are a number of other reasons why companies such as yours may wish to monitor and record employees using email, telephone or web browsing.

Your employees are representatives of your business and any illegal or otherwise questionable use of such systems could lead to embarrassment for the company, lead to a damaged reputation and/or loss of custom. Further, if not adequately checked, the use of these systems may lead to potential liability, for example, copyright infringement or employee negligence. Also, you need to ensure that confidential information and trade secrets are not being leaked.

There is a considerable amount of legislation that needs to be considered. Firstly, under the Regulation of Investigatory Powers Act 2000 (“RIPA”), it is an offence to monitor or record communications in order to make the contents of the communications available while being transmitted to a person other that the sender or intended recipient.

The Telecommunications (Lawful Business Practice) (Interception of Communication) Regulations (2000) (“LBP Regulations”) sets out when communications can be monitored or recorded, such as for establishing the existence of fact, ascertaining compliance with regulatory or self-regulatory practices or ascertaining or demonstrating the standards which are achieved or ought to be achieved by staff.

As an employer, you must ensure that you have made all reasonable efforts to inform every user of the relevant system that communications may be intercepted.

Monitoring IT and communications in the workplace is also likely in involve the processing of personal data and is therefore subject to the Data Protection Act 1998.

Under the DPA, the processing of personal data must be “fair” and “lawful”. To be “fair”, employers should inform employees of, for example, the method by which monitoring will take place and the purpose for which the information is being processed. You do not necessarily need the employee’s consent to carry out the monitoring but unless you do so, you will need to have some legitimate reason.

So, what measures do you need to think about to help you comply if you introduce monitoring of employee’s use of IT and communications?

• Personal data must be obtained only for specified lawful purposes and must not be processed in a manner which is incompatible with those purposes.
• The employees should understand:
  > How and why the monitoring takes place;
  > The circumstances in which it will take place;
  > The information that will be collected and how it will be used; and
  > Who the information will be disclosed to. These details should be contained in an appropriate communications policy.
• You should be proactive in ensuring that the employees are aware of the communications policy.
• The data collected should be adequate, relevant and not excessive for the purposes for which it is processed.
• Practical example - in relation to the monitoring of emails, it is more likely to be proportionate if you monitor the subject headings of emails rather than the contents of emails.
• There should be appropriate technical and organisational measures to protect the personal data from unauthorised or unlawful processing and accidental loss, destruction or damage.

The Information Commissioner’s Code recommends that an Impact Assessment is undertaken to demonstrate that the correct balance exists between allowing staff to enjoy privacy in the workplace and ensuring that the interests of the company’s business is protected.

Whilst the Code states that there is no need for the Impact Assessment to be a formal or complicated exercise, it is advisable that an assessment is carried out, recording the process undertaken and its findings, and writing up the conclusions found. This will assist for evidential purposes if required.

It is important that you have a communications policy in place which adequately informs your employees about the monitoring activities and that employment contracts ensure that employees provide their consent to such activities where necessary. If you would like us to assist you with the communications policy, then we would be happy to do so.

If you have any queries in relation to this problem or a question that you would like to ask the team and share with our other readers, please send it to us and we would be delighted to use it in a future edition of Employ!