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     03 Sep 2010
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Best people practice for people in business
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Monthly update
May 2009

Welcome to BusinessHR's May update.

 

 

Employment law update

Increase to statutory redundancy pay

The limit on a week's pay for the purposes of calculating statutory redundancy pay (SRP) will be increased from £350 to £380. The maximum amount of statutory redundancy pay will therefore also increase from £10,500 to £11,400 (20 years x 1.5 weeks x £380).

SRP was last increased in February and it would be usual for the next increase to have been due in February 2010. The Department for Business, Enterprise and Regulatory Reform is indicating that the change will take effect from 1st October this year.

What is not clear yet is whether there will be an identical increase to the statutory basic award for unfair dismissal claims.

 

Equality Bill published

The long-awaited Equality Bill has now been published. This aims to combine all of the existing legislation on discrimination into a single statute and contains 205 clauses plus 28 Schedules. The main features to note are summarised below. Note that as the Bill goes through through parliamentary process some parts may go, others could be altered and new provisions could be introduced. The majority of the provisions are however expected to come into force in October 2010.

Positive action in recruitment/promotion decisions

The Bill allows employers to positively discriminate during recruitment in favour of disadvantaged groups when choosing between candidates who are otherwise equally qualified. Such decisions must be made on a case-by-case basis, as opposed to having a blanket policy of positive action.

This is not going to be straightforward, as employers who use such positive action risk discrimination claims from unsuccessful candidates who may challenge whether candidates are truly equal, as well as the assessments of under-representation and disadvantage. In addition there are concerns about the extent to which positive action is permitted under EU law.

Equal pay and pay transparency

The Bill maintains the current regime around sex discrimination in relation to pay but attempts to clarify the law in some respects.

Any clauses in employment contracts that seek to prevent workers discussing their pay packages will be outlawed.

A clause allows the Secretary of State to order private sector employers with at least 250 employees to publish information about differences in pay between their male and female employees. The government claims it has no plans to do this straight away but instead will monitor whether voluntary disclosure is sufficient; if it feels that insufficient progress has been made then it may make publication compulsory.

Discrimination by association or perception

This reflects recent European case law by outlawing direct discrimination or harassment if this arises from the victim's association with someone who has a disability, or is of a particular age, sex, sexual orientation, racial origin or religion or belief. Discrimination on the grounds that someone is 'perceived' to possess a protected characteristic will also be unlawful.

Disability discrimination

An impairment currently usually only qualifies as a disability if it affects one or more of the following:

  • mobility
  • manual dexterity
  • physical co-ordination
  • continence
  • ability to lift, carry or otherwise move everyday objects
  • speech, hearing or eyesight
  • memory or ability to concentrate, learn or understand
  • perception of the risk of physical danger.
The Bill abandons this list and relies instead on the general requirement that an impairment is long term (12 months or more) and has a substantial effect on a person's ability to carry out normal day-to-day activities. Further regulation or guidance is, however, likely.

Age discrimination by service providers

Service providers will, for the first time, be prohibited from discriminating against customers, clients and other service users on grounds of age, although there may be some exemptions, eg holidays aimed at certain age groups.

Public sector equality duties

Public bodies currently have a duty to have due regard to the need to eliminate unlawful discrimination, victimisation and harassment and to promote equality of opportunity in the areas of sex, disability and race. These duties will be combined and extended to cover religion and belief, sexual orientation and age and all of these will be incorporated into a single, streamlined duty. The Bill also contains a new duty for some key public bodies to pay due regard to socio-economic disadvantage in making strategic decisions.

Diversity information when tendering

The Government Equalities Office wants public authorities to require businesses bidding for public sector contracts to evidence their 'diversity credentials'. The Bill gives the Government the power to make regulations that will force public bodies to consider equality issues in certain cases.

Recommendations by tribunals

Tribunals will have greater powers to make recommendations in cases where unlawful discrimination has been proved. At the moment they can recommend that an employer takes steps that will reduce the effect of discrimination on the claimant. This will be extended to allow them to make wide-ranging recommendations applying across the workplace (although not in equal pay cases), such as introducing an equal opportunities policy, re-training staff or publicising selection criteria. The Government aims to make tribunal judgements available and searchable on-line at some stage in the future so that such recommendations will be made public.

To view the Bill, please see: services.parliament.uk/bills/2008-09/equality.html

 

Increase in tribunal claims and changes to procedures

The Tribunal Service has published its annual statistics for the period 1 April 2007 to 31 March 2008. These show a 43% increase in the number of claims compared to the previous year (2006/07).

A number of changes have been made to the employment tribunal Rules of Procedure from 6 April 2009.  A judge will no longer have any discretion and must issue a default judgement if a respondent fails to present its response within the relevant time limit, unless the judge has insufficient information in order to do so.  So the deadline for submitting a response becomes even more crucial. There are also changes to the rules relating to a request to an extension of time and new rules relating to the withdrawal of proceedings.

Employers who fail to pay employment tribunal awards of compensation to claimants will, from 1 April 2009, be added to the Register of Judgements, Orders and Fines once enforcement proceedings are brought against them.  This should encourage more timely payments since the Register can be searched by members of the public (including the press) and credit reference agencies.

 

Eastern European Workers - extension of the Worker Registration Scheme

The government has announced that the Worker Registration Scheme, which had been expected to end on 30 April 2009, will continue for another two years . This requires workers from the Czech Republic, Estonia, Latvia, Lithuania, Slovenia, Slovakia, Poland and Hungary to be registered with the Home Office until they have completed 12 months' registered work.

Employers failing to ensure that their employees comply can be fined up to £5,000.

The scheme will now end on 30 April 2011.

 

Some interesting cases

Discrimination - age

Leeds Teaching Hospitals NHS Trust give us a good example of the need to train all managers on discrimination!

Linda Sturdy, aged 56, claimed that she had been assured by her employers that she was the “preferred candidate” for a new role in charge of breast-screening services across West Yorkshire. However, when she informed her manager that she was only a few years away from the retirement age of 60, the manager responded: “I didn’t realise you were so old.”

The vacancy was subsequently filled by a less experienced candidate and Ms Sturdy also alleged that the Trust had sought to persuade her to accept a more junior role.

As the Trust was unable to explain its reasons for rejecting Ms Sturdy’s application, the tribunal concluded that discrimination had occurred. They found that Ms Sturdy had been penalised by being forced into 'a manifestly unsuitable role and then being threatened with dismissal for failing to accept it', that an investigation into her case had been delayed because she had lodged a complaint, and that her salary had been unlawfully deducted.

Compensation will be decided at a later hearing; however, it is thought that the award could be as high as £500,000.

Discrimination:  disability

What does the word 'normal' mean, when considering whether something is a "normal day-to-day activity" for the purposes of the Disability Discrimination Act?

A decision of the EAT in Chief Constable of Dumfries & Galloway Constabulary v Adams confirms that normal activities are those found in a range of employment situations.  Specialist skills, whilst "normal" within a particular industry (eg a skilled watchmaker using specialised tools to craft fine objects of precision) would not be covered.

So skills required specifically of a policeman would not be a 'normal day-to-day activity'; but an activity which is common across a range of industries (in this case specifically walking around during night-shifts) does qualify as a 'normal day-to-day activity'.

Discrimination: sexual harassment

In Notz Stucki v Nadine Nassar, Ms Nassar brought a claim of both sexual harassment and unfair dismissal. Following receipt of late night suggestive text messages from her boss, she made a formal complaint and days later was dismissed by her boss, without any prior warning.

Her manager tried to justify the messages as an attempt to help her settle into her new job and life in London. However the tribunal ruled there was a "sexual dimension" to his messages and that his behaviour amounted to sexual harassment.

Whilst her case was brought too late to be considered under sex discrimination laws, she successfully claimed unfair dismissal and was awarded more than £64,000 in compensation.

TUPE - when the contract does not continue

TUPE is much more straightforward these days in that we all now expect that service provision changes will be covered. So if there is an organised grouping of staff, dedicated to a particular contract, when that contract is transferred, those staff will usually transfer with it.

However when the contract is split up, resulting in no continuity of service provision, TUPE may not apply and the case of Clearsprings Management Ltd v Ankers and others is a useful cautionary reminder that where TUPE does not apply, you can be left with redundant employees.

In this case, Clearsprings was one of four contractors in the North West region who had five-year contracts to provide accommodation and support services to asylum seekers. When the contracts came up for renewal, they tendered again, but were unsuccessful. The asylum seekers covered by Clearsprings' contract were randomly re-allocated to the three incoming contractors.

The employment tribunal found there was an activity that constituted a service provision change but, no single transferee could be identified as having taken over the activity and the tribunal could not identify a transfer date, which indicated that the "activity" had become so fragmented as to be outside the scope of TUPE.

On appeal, the EAT agreed. Whilst it is still possible to have a service provision change under TUPE where a contract transfers from one contractor to several, in this case the activities which Clearwater had undertaken became so fragmented that no relevant transfer took place. A factor that influenced the EAT was that it could see no pattern of how asylum seekers were allocated to the incoming contractors.

This case is relevant to anyone involved in outsourcing/re-tendering exercises where there is an increase in the number of contractors and/or a redistribution of the original activities carried out. If the relevant activities are sufficiently split up and fragmented, particularly if the activities carried out by particular employees or groupings of employees are split between different new contractors, then TUPE may not apply.

Casual workers - are they employees?

The Court of Appeal has provided further guidance as to when a casual worker will be considered to be an employee for the purposes of the Health and Safety at Work etc Act 1974. The case of R v Pola confirms that workers who are engaged, even on a casual basis, are likely to be viewed as 'employees'.

In this case a group of Slovakian nationals were working on a building site on a casual basis. There was no obligation on them to turn up for work, but if they worked they would be paid a day's wages.

The Health and Safety Executive (HSE) brought a prosecution against Pola under s.2(1) of the Act (General duties of employers to their employees), following an injury to one of the men. Pola claimed that the men were not their employees.

On appeal the court found that workers engaged on a casual basis and who are under no obligation to report for work from one day to the next are still likely to be classified as employees for the period when they are at work.

So - if you employ casual workers, do ensure that you extend your normal risk assessment procedures, training, equipment and monitoring to them in the same way as you do for your other employees. Also note that if a sub-contractor's employees or workers are injured, the HSE may investigate the main contractor also under s.3 of the Act (General duties of employers and self-employed to persons other than their employees). So it is worth checking that your sub-contractors also are following safe systems of work.

Can controlling shareholders be employees?

In Secretary of State for Business, Enterprise and Regulatory Reform v Neufeld and another the Court of Appeal held that there was no reason in principle why controlling shareholders could not be employees (thus enabling them to claim a statutory redundancy payment if the company becomes insolvent).

The tribunal must first consider whether the contract between the individual and the company was genuine, and whether it was a contract of employment. The circumstances in which any document was created, and the conduct of the parties under the contract will be taken into account, as will factors such as whether the individual received a salary or directors’ fees.

 

Health and safety news

The 'opt-out' remains

The recent talks which aimed to remove our ability to opt-out of the maximum 48 hour working week broke down without agreement for the final time. This means that employees will be able to continue to work more than 48 hours a week if they choose. According to government figures, 3 million workers, more than one in 10, work more than 48 hours per week. So basically the status quo prevails and all suggestions re restricting the ability to opt-out or putting further rules in place have also gone.

Whilst on the subject, the final phase of introducing a maximum working week for junior doctors is still scheduled to take place on 1 August, when their maximum weekly hours will reduce to 48. The British Medical Association (BMA) has warned that new figures show that the NHS is not sufficiently prepared for the change. The Chairman of the BMA’s Junior Doctors Committee said: "The NHS has had 11 years to prepare for the introduction of the 48-hour week for junior doctors. The latest figures are alarming; suggesting that one in three junior doctors is working hours that will be illegal in just four months’ time." He said that he was deeply concerned that there will be disruption to patient services in August and that the quality of training for junior doctors will be threatened.

 

Corporate manslaughter

The first prosecution under the Corporate Manslaughter and Homicide Act 2007 has been reported.

A Gloucestershire-based company, Cotswold Geotechnical Holdings Ltd, has been charged with a 'gross breach' of duty in connection with the death of a junior employee who died when a pit collapsed on him in September 2008. A director of the company, Peter Eaton, has also been charged with gross negligence manslaughter and a separate health and safety offence.

Mr Eaton will appear at Stroud Magistrates Court on 17 June to face charges both as an individual and on behalf of the company.

 

Changes to health and safety law

As from April 2009 employers will no longer have to register the factories, offices and shops in which their employees work with the relevant health and safety authority.

A new health and safety law poster has also been introduced which sets out what employers and workers must do, and what to do if there is a problem. There is also a leaflet that employers can give to workers, instead of displaying the poster. Employers can continue to use their existing versions of the poster until 5 April 2014, as long as they are readable and up to date.

The new documents can be ordered from HSE Books (tel: 01787 881165) and there is also an MP3 version on the HSE Talking Leaflets website (see: www.hse.gov.uk/pubns/tlindex.htm).

 

New on the website

We've added a further handout to our "Do's and Don'ts" section - this time on dismissal - see /docs/TPdocuments.html

 

And finally....

How much does it cost to bribe your employees?

Researchers from Infosecurity Europe surveyed 600 commuters and, according to their press release, a third of those surveyed (37%) admitted that they would hand over their company's secrets for the right price.

The following percentages of the 37% of workers who would download and hand over sensitive company information to a stranger would do this for the following amounts:

  • 63% for at least £1M
  • 10% if their mortgage was paid off
  • 5% for a holiday
  • 5% for a new job
  • 4% for getting rid of their credit card debt
  • 2% for a free slap up meal!

When asked to give credit card information, account details or security codes, employees were harder to tempt and 80% wouldn't provide this information at any price. Of the 20% who would:

  • 68% would only do it for £1M
  • 15% for paying off their credit cards
  • 7% if their mortgage was paid off.

The types of information that the workers had access to included customer databases, business plans, accounting systems, HR databases and IT admin passwords.

Hopefully these weren't your workers! Do bear in mind that in the current economic climate, where many employees have friends and family who have lost their jobs or may be facing pay freezes or cuts, employees are more likely to be tempted than previously. Ensure that your systems are sufficiently robust to minimise such risks. Read our guide to managing theft and fraud (see: /docs/guides/fraud.html) and also review your data protection procedures and monitoring.

 

How not to make redundancies....

We're not sure where this originated from before it started being forwarded around the world by email (think it was a local paper in Singapore) so can't credit this, but thought it was worth sharing further!

"A fire alarm rang at 4 pm when almost all shift employees are in office (approx 5000). As usual entire office was evacuated within 3 mins & every employee gathered outside office. 10 mins passed................... 5 more mins passed ................... 5 more mins passed.

Then a Security Officer started an announcement:

"Dear Employees - With melting heart I am making this announcement that for many of you it will be a last evacuation drill. Due to the recession we are laying off almost 50% of employees. Whilst moving in if your ID card does not work, then you are among those laid off & all your belongings will be couriered to you tomorrow. We have followed this approach as we didn't want to fill email box with layoff mails and goodbye mails in thousands & also to avoid any fight inside office. Hope you have nice career ahead. Please move in & try your luck."

If you need advice on how to manage a redundancy programme, please do take a look at all of the guidance on our website! See: /docs/TPend.html

 

Swine flu

With 230 possible swine flu cases being investigated in the UK and the government's chief medical adviser warning that Britain will see "many, many more cases" of swine flu it is worth checking you have an contingency plan.

Whilst there may be a limited chance of this affecting your employees, if it does and you are unprepared, the impact could be costly and affect the health of your employees, to whom you have a duty of care. A pandemic could escalate quickly and last for many months.

If you don't have any form of crisis management plan in place, please see our crisis and contingency planning advice for tips: /docs/guides/crisis.html and also keep updated on World Health Organisation advice.

 

 

 

 

 

 

   
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